Harvard Case - Strategic Services at Andersen Consulting
"Strategic Services at Andersen Consulting" Harvard business case study is written by Thomas J. DeLong, Abby Hansen, Catherine Conneely. It deals with the challenges in the field of Service Management. The case study is 18 page(s) long and it was first published on : Sep 9, 1998
At Fern Fort University, we recommend that Andersen Consulting embrace a service-dominant logic approach to its strategic services, focusing on co-creation of value with clients and leveraging its core competencies in IT management and service innovation. This involves a shift from a product-centric model to a customer-centric one, prioritizing customer experience management and service quality through a comprehensive service system design. This strategy will be supported by a robust service marketing mix and service delivery systems that cater to diverse client needs and foster customer loyalty.
2. Background
Andersen Consulting, a leading management consulting firm, faces a critical juncture in its evolution. The company has achieved significant success in the past by providing traditional consulting services. However, the rise of the Internet and the increasing demand for technology-enabled services have presented both opportunities and challenges. Andersen Consulting needs to adapt its business model and service offerings to remain competitive in this evolving landscape.
The case study focuses on the firm's efforts to develop and implement a new strategic services initiative. This initiative aims to leverage the firm's expertise in IT management and service innovation to provide clients with a broader range of value-added services. The case study highlights the challenges faced by Andersen Consulting in developing and implementing this initiative, including internal resistance to change, the need to build new skills and capabilities, and the challenge of effectively communicating the value proposition of the new services to clients.
3. Analysis of the Case Study
This case study can be analyzed through the lens of several frameworks, including:
- Porter's Five Forces: This framework helps assess the competitive landscape and identify potential threats and opportunities. The rise of the Internet and the emergence of new competitors, particularly in the IT management space, pose significant challenges to Andersen Consulting.
- Value Chain Analysis: This framework helps understand the firm's internal processes and identify areas for improvement. Andersen Consulting needs to streamline its service delivery systems and enhance its service innovation capabilities to remain competitive.
- Service-Dominant Logic: This framework emphasizes the co-creation of value between the service provider and the customer. Andersen Consulting needs to shift its focus from simply delivering services to actively engaging with clients to understand their needs and co-create solutions that meet those needs.
- SERVQUAL Model: This framework helps assess the quality of service offerings based on customer perceptions. Andersen Consulting needs to ensure that its service quality meets or exceeds customer expectations across all dimensions of the service experience.
4. Recommendations
To successfully implement its strategic services initiative, Andersen Consulting should focus on the following key recommendations:
1. Embrace a Service-Dominant Logic Approach:
- Shift from a product-centric to a customer-centric approach, prioritizing customer experience management and service quality.
- Emphasize service co-creation with clients, actively engaging them in the design and delivery of solutions.
- Develop a clear service value proposition that highlights the unique value that Andersen Consulting can bring to clients.
2. Develop a Comprehensive Service System Design:
- Conduct a thorough service blueprinting exercise to map the entire customer journey and identify potential moments of truth.
- Implement a service quality management system that includes rigorous service performance metrics and customer feedback management.
- Develop robust service recovery processes to address service failures and ensure customer satisfaction.
3. Leverage Technology and Innovation:
- Invest in technology-enabled services to enhance efficiency, scalability, and customer experience.
- Encourage a culture of innovation and service innovation to develop new and differentiated service offerings.
- Explore the use of self-service technologies to empower clients and improve efficiency.
4. Build a Strong Service Culture:
- Foster a service culture that emphasizes employee empowerment and customer service.
- Implement employee incentives and employee performance management systems that align with service excellence.
- Promote diversity and inclusion within the organization to foster a culture of innovation and creativity.
5. Develop a Robust Service Marketing Mix:
- Implement a comprehensive service marketing mix that includes pricing, promotion, distribution, and communication strategies.
- Leverage branding and marketing communications to effectively communicate the value proposition of the new services.
- Utilize customer relationship management (CRM) systems to manage customer interactions and build relationships.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Andersen Consulting's core competencies in IT management and service innovation, and they support the firm's mission to provide value-added services to clients.
- External Customers and Internal Clients: The recommendations address the needs of both external customers and internal clients, ensuring that the new services are aligned with the expectations of both groups.
- Competitors: The recommendations help Andersen Consulting stay ahead of the competition by focusing on service differentiation strategies and leveraging technology-enabled services.
- Attractiveness: The recommendations are expected to result in increased business growth, improved customer loyalty, and enhanced competitive advantage.
6. Conclusion
By embracing a service-dominant logic approach and focusing on customer experience management, service quality, and service innovation, Andersen Consulting can successfully implement its strategic services initiative and remain a leader in the management consulting industry. The firm needs to invest in building the necessary capabilities, fostering a strong service culture, and developing a robust service marketing mix to achieve sustainable success in this evolving market.
7. Discussion
Alternative approaches to the strategic services initiative include:
- Focusing solely on traditional consulting services: This approach would be less risky but could lead to a decline in market share as competitors embrace new service offerings.
- Acquiring existing technology companies: This approach could provide quick access to new capabilities but could be expensive and risky.
The key risks associated with the recommended approach include:
- Resistance to change within the organization: This can be mitigated by effectively communicating the benefits of the new services and providing adequate training and support to employees.
- Inability to effectively manage the new services: This can be addressed by developing robust service delivery systems and implementing a comprehensive service quality management system.
- Competition from other firms: This can be mitigated by focusing on service differentiation strategies and leveraging technology-enabled services.
8. Next Steps
To implement the recommendations, Andersen Consulting should take the following steps:
- Develop a detailed implementation plan: This plan should outline the key milestones, timelines, and resources required to implement the new services.
- Communicate the new strategy to employees: This communication should clearly articulate the benefits of the new services and address any concerns that employees may have.
- Invest in training and development: Employees need to be equipped with the skills and knowledge necessary to deliver the new services effectively.
- Monitor progress and make adjustments as needed: Andersen Consulting should continuously monitor the performance of the new services and make adjustments to ensure that they are meeting customer needs and delivering value.
By taking these steps, Andersen Consulting can successfully implement its strategic services initiative and position itself for continued success in the evolving management consulting industry.
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Case Description
Bill Copacino, Andersen Consulting's managing partner of Strategic Services Americas, needed to submit his recommendation to Peter Fuchs, Strategic Services worldwide director, for the operating plan for Strategic Services Americas for fiscal year 1999. Strategic Services had grown by over 40% per year in headcount since 1989, but remained a relatively small part of Andersen Consulting. Copacino and Fuchs were challenged to grow Strategic Services at the level required to increase its relative position in the firm to 10% of its people and 15% of its revenues. As they discussed options, there were no easy answers. Should Strategic Services continue to try to grow at 30% plus per year? Would Strategic Services be able to find enough new and experienced hires to continue to grow? Could the unique culture be maintained? Should they consider acquisitions? Was there an effective way to meet their growth targets?
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