That is also why he was concerned about the presentation and thus called the vice president of marketing, Ginger, who came to his office immediately. He honestly states that he is not sure about the system, but he doesn’t want to fall behind the curve. Ginger does not like the system and says that when they surveyed customers about a similar system 18 months ago, they said they would hate it. She also states that she doubts that the data is out of date. She says that healthcare is a personal field and that customers appreciate all the human contact they can get, for reassurance. She also states that especially older people might have hard times using it, and thus they would need both, giving them no cost advantage. She also says that delivering standardized reports to government and insurance companies can be achieved in more that one way. In all, she keeps a customer focus and states that they would not like it, although the employees would really like it. Of course, this last thing is very important to Allan too. Their conversations ends with a remark by Allan: “Don’t you find it strange that we’re trying to choose between installing a system that we think might enhance our quality as a provider and not installing a system because we want to please out members?”.
When Ginger later spots Pat (they never liked each other) she discusses it with her. Pat states that she thinks it should be installed and that she doubts the way the customer satisfaction surveys are carried out. She says she doesn’t trust the data and thinks the customers would want a system like this. She says that people need to be told what they want and they will recognize quality care when they see it.
Quality Improvement - questions:
(1) Describe the basic situation in the Quality Care case. What decision is Allan Moulter facing? What are the issues, challenges and tradeoffs?
The decision Quality Care is facing is whether they should install a computerized reception system or not. 4 parties have an influence on this decision:
Jack (Consultant): he is showing all the merits of the system.
Allan (CEO): he is somewhat in favor, but still doubting.
Pat (CIO): she is clearly in favor of the system.
Ginger (VP marketing): she is not in favor of the system.
Recent surveys show that Quality care has high retention and satisfaction rates, what indicates that no major improvements need to be done. 18 months ago, research showed that a similar system was absolutely not wanted by the customers. On the other hand, the employees did really want the system and the competition has already implemented the system or is going to in the nearby future. By not implementing the system, they risk being behind on the latest developments and on their 2 bigger competitors. Next to that, Allan is afraid the government and insurance agencies will start seeing this as a standard and if this happens, they don’t want to be behind in technology or standards either. There are also doubts about the validity and the timeliness of the survey results, what makes them a bit arbitrary. Allan basically has to decide between leaving the company as it is and thereby risking dissatisfied employees and a competitive disadvantage, or installing the system, risking unsatisfied customers and very high costs. Satisfied employees do have a positive effect on the customers’ satisfaction, but if the customers’ dissatisfaction is greater, there is no real benefit.
Installing the system might widen gap 1, since the company would offer a service that the customers do not seem to want. On the other hand, if new research would show customers would like a system like this, it might make the gap smaller. A major problem with new IT services is that customers can often not imagine how they should use a new system and they don’t see the advantages.
(2) Information technology is a powerful force in shaping service strategies. Used appropriately, it can increase customer satisfaction, improve efficiency, reduce costs, support front line staff, and even radically change how services are delivered. Discuss the use of technology in the proposed computerized reception system in the Quality Improvement case.
The new system is meant to significantly change the current reception system. It would support and take over part of the reception employees tasks by providing customers with a SST. The customers would no longer interact with reception personnel when entering the company, but would deal with the computer before they are redirected to the appropriate department. It is very important to consider that a SST must have a clear benefit for the customers. When customers of Quality Care do not want the net technology because they don’t see the use of it, it will most probably not be successful.
Installing the system has the advantage of decreasing personnel cost, but in the case of Quality Care, this is not very certain. The case describes that at the industry leader, HealthCare One, all personnel are kept, so no cost advantage is achieved. It would thus be a high investment, which would need to be paid back by higher customer satisfaction and retention, but this is already very high.
The installation of this system might increase quality, reduce personnel costs, speed up the process, reduce waiting lines or take over part of the busy front line staffs’ tasks. At the other hand it might also decrease customer satisfaction, increase costs, increase difficulty of reception process for (some) customers, increase employee turnover and overall, reduce quality. Furthermore, customer self-perceived service role will increase, but due to the fact that customers do not want this improvement, they will in the beginning still attribute failures to the system and company.
(3) What would you do if you were Allan Moulter at Quality Improvement?
When facing a decision like this, sufficient and adequate information is essential. Since the current information on the customer opinions is 18 months old and customer perceptions are very dynamic, the data might be too outdated. Since technology changes very rapidly, new research should be conducted before deciding whether to implement the system or not. This new service can be called a service development, since it is a new service for current customers. It is critical to involve both the employees and the customers in the research, but the idea also needs to be screened against the service strategy. Besides researching the customers of Quality Care, I would also conduct research at HealthCare One and MediCenters to see how their customers evaluate the new service. If these researches turn out to be positive, I would test the system with customers to see whether they still like it when confronted with it.
With the current information I would choose to implement it, but in two ways:
- install the system for customers who like speed and easy of registration
- keep a smaller part of the reception personnel to assist customers who do not like the system
This system basically is a standardization of a service. Standards must be customer defined, not company defined, so if customers do not like the system they should have a alternative. This means offering the customers the choice of the new system, just like the Belgium Kredietbank did in 1990. Since it was not likely that they could save personnel costs, this could be an optimal situation for both the customers and the employees. The employees satisfaction will increase due to the new system that can support their tasks. This increased satisfaction will partially be transferred to the customers. Besides that, customers who either want to use the system or want to speak to personnel personally will still be satisfied or even more satisfied due to the choice they get.
