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Exploring Digital Transformation and Digital Culture

in Service Organizations

Marko Jäntti Sanna Hyvärinen


School of Computing School of Computing
University of Eastern Finland University of Eastern Finland
P.O.B 1627, 70211 Kuopio, Finland P.O.B 1627, 70211 Kuopio, Finland
Email: marko.jantti@uef.fi Email: sanna-marika.hyvarinen@teliacompany.com

Abstract—Digital transformation changes the way how compa- nizational level. In their study, they explore how digitalization
nies and individuals operate and interact with their surrounding impacts the whole enterprise architecture. Digitalization causes
environment. New digital channels provide service companies significant challenges for IT services and service management
both opportunities and threaths. One of the valuable oppor- processes such as change and release management [3] while
tunities is to affect positively customers’ service experiences. releases have become more complicated (for example, release
Digital Experience (DX) can be defined as meeting and exceeding
packages have interdependencies that require a systematic
changing customer expectations via digital channels, platforms
and touchpoints. In this paper,we focus on exploring digital product portfolio management), releases should be produced
transformation and digital culture in the context of service much faster than before leaving less time for testing and quality
management. The research problem of this study is: How digital assurance. Digital transformation is a change that requires
transformation and digital culture are visible in service provider careful planning and use of change agents [4]. It may be visible
organizations? The main contribution of this paper is to provide in the form of digital programmes and projects.
findings on challenges in digitalization, digitalization patterns
that exist in daily service management work and actions service An important step in any digital transformation project is
employees are performing to develop and contribute to the to define the context and goals for transformation. A natural
digital culture. Multiple sources of evidence from TUPLA project choice is to select improvement areas that can directly affect
industry partners and narratives on digitalization were used in customer satisfaction such as service desk, incident manage-
data collection. ment and customer support. Previous studies on service desk
Keywords—Digital transformation; service management; cus- and incident management have focused on process improve-
tomer service. ment challenges [5], corrective maintenance [7] and predicting
incidents [8] but have not adequately addressed digital ex-
I. I NTRODUCTION perience management in the context of service management.
A recent study showed that new digital tools and software
Digital transformation is rapidly changing the way how licenses could be used to motivate and reward customer sup-
service companies and individuals operate their business and port employees instead of financial incentives [9]. Motivation
provide customer service and support. Today’s IT organizations of service desk employees can be approached from various
should not be focusing only on solving incidents that users are perspectives such as gamification [10].
reporting but also taking care of customer experiences both in
traditional and digital channels. Multi-channel contact centers have been the priority of
new development over the last years, but there are certain
Customer experience management (CEM) can be defined challenges. Multi-channel approach focuses on just providing
as a practice of designing and reacting to customer interactions support with multiple channels but does not guarantee that
to meet or exceed customer expectations. It is a critical channels interact with each other. Modern consumers expect
factor regardless the channel where the experience has been the seamless multi-channel experience and value that they can
created. In order to survive in the fierce competition and continue the service process from the same point in the new
provide a modern brand image, service companies need to channel where they stopped in a previous channel. Thus, omni-
launch new ways to interact with their customers. In addition channel [11] provides an unified and integrated approach for
to traditional service channels (phone, physical desk, email), customer support and enables agents to move across these
modern channels such as service portals, mobile apps, social channels seamlessly.
media support sites, chat services etc. should be designed,
tested and implemented. Thus, customer experience is turning According to a study of BearingPoint [13] the contact
into digital customer experience (Digital Experience, DX). centers evolving organizational model requires a new type of
There are various factors that affect customer experience on digital cultural model addressing 1) the development of multi-
services such as previous experiences on service usage, social skilled teams with specific subject matter experts who can
environment, and the service interface [1]. enhance both voice and digital customer interactions, 2) up-
skilling agents to improve their digital skills and emotional
Korhonen and Halen [2] state that digital transformation re- intelligence, 3) increasing agent autonomy and responsibility
quires a new institutional logic and effective response at orga- to drive successful integration of voice and digital channels
978-1-5386-5178-0/18/$31.00 2018
c IEEE and 4) placing an increased focus on customer satisfaction as
a way to monitor and manage contact center performance. gramme managers, chief digital officers, digital transformation
officers or any employees responsible for managing digital
Leading companies are moving their organizational models
initiatives. The remainder of the paper is organized as follows.
from digitally dedicated agents to multi-skilled teams (voice
In Section 2, the research methods of this study are described.
and digital channels) to provide an enhanced customer expe-
In Section 3, the results of the study are presented. Section 4
rience. The most mature organizations are moving towards an
provides an analysis, and conclusions are given in Section 5.
integrated model where agents support both voice and digital.
For example, a travel company has implemented a new solution
to provide its agents with multichannel capabilities includ-
ing voice, e-mail, web chat, IM and SMS messaging. This II. R ESEARCH P ROBLEM & M ETHODOLOGY
approach gives companies flexibility and increased efficiency
when managing agent resource across the channels. Similarly, The research problem of this study is: How digital trans-
customers are able to interact with the same agent across formation affects service management and customer service.
different channels to get their issues resolved. This research problem was divided into the following research
questions:
Digitalization is a long term effort that requires not only
technology and latest devices but also open minded persons • How service employees see the role of digitalization
with digital mindset, organizational culture that supports and in their daily work?
motivates for exploring digital world such as new features in
cloud platforms, new mobile apps, performing IoT experiments • What types of challenges are related to digitalization
etc. Additionally, systematic design, transition and operation in service organizations?
of digital services require a service management system with
documented service processes. For this, there are are number • How digital culture can be strengthened in service
of service management frameworks that may be used to imple- organizations?
ment service management processes such as IT Infrastructure
Library [14], COBIT [15], and VeriSM framework [16]. According to Yin [20], a case study is ”an empirical inquiry
that investigates a contemporary phenomenon within its real-
Typically, digital service providers need to demonstrate life context”. The narrative case studies can be used as a
for their stakeholders how they design and operate services research instrument to study social and clinical problems, to
through processes. Demonstrating process and operational understand stages or phases in processes or to investigate a
maturity in service management can be done by using in- phenomenon within its environmental context. In this paper,
ternational standards ISO/IEC 15504-8 [17] and ISO/IEC the phenomenom is digitalization and digital culture. We study
20000 Part 1: Service management system requirements [18]. the phenomenom in the context of service management and
The ISO/IEC 20000 standard requires that service providers service provision. According to Gilgun [21] products of quali-
should establish documented procedures to deal with formal tative research regarding theories can be concepts, hypotheses,
service complaints from the customer. ISO/IEC 15504-8 can and models. This study focused on exploring digital trans-
be used to define the maturity level of customer (business) formation in service organizations and identifying concepts
relationship management. The service measurement process of and patterns from case study narratives. The case study was
ITIL Continual Service Improvement [19] includes a statement selected because authors of this papers had easy access to
of the benefit that service measurement helps to combine in- case material due to ongoing training and development project
dividual measurements to produce a view of the true customer TUPLA.
experience.
To summarize, existing service management studies have
not dealt with the role of digital transformation in IT service A. Data Collection Methods
management, especially in customer support and customer
service. We expect that digital transformation has impacts Data was collected by using multiple sources of evidence
on roles, responsibilities, behaviors, organizational culture and from multiple companies. Our case study datastore (Office 365
mindsets of employees as well as service channels provided Groups) included the data received from case organizations.
to service users. In this paper, we aim at studying digital The case organization were selected from a pool of TU-
transformation, how it is visible and what types of challenges PLA project industry partners. The following data collection
it may include in companies that perform service manage- methods/sources were used during the study: documentation
ment. The data was collected during training and development (case narratives on digital transformation from Digital Ser-
project TUPLA (Digital Services and Productivity for Business vices (DPO) course organized by TUPLA), archives (incident,
Needs). service request records, RFC records, Trello task records),
interviews/discussions (interviews and discussions with HR
The main contribution of this study is to 1) study how
designer, CEO of marketing agency, ITSM process consult,
service employees see the role of digitalization in their work,
Chief Financial Officer, business manager; open digitalization
2) identify challenges related to digitalization and digital
related discussion in Akateeminen Vartti TE MESSI where
transformation in service organizations, and 3) study how
an author of this thesis was one of contributers, 2 Subject
service employees are contributing towards creation of digital
Matter Experts: an ICT consultant, a service manager), and
culture. In the analysis part, we present a first version of the
participative observation (Workshops on digital transformation:
Digital Workplace Model.
dark side of digitalization, participation in 1 day cloud service
The results of this study may be useful for digital pro- management event).
B. Data Analysis DN3: In our company, digitalization means improving
competitiveness, profitability, communication and job well-
Case comparison analysis technique [22] was used to
being of business with appropriate tools, systems and appli-
analyze case study data. Authors were part of TUPLA project’s
cations. During past 5 years we have implemented various
research team and participated in collecting and analyzing
digital initiatives, for example, for mobile work, marketing,
case material. Main analysis techniques included tabularization
financial management and communication and these initiatives
and categorization of case study data. Narratives concerning
have kept the company competitive and enabled a sort of
digitalization were analyzed by the first author of this paper
differentation from others. Digitalization is seen as only way
and translated in English. Each narrative resulted in 2-4
to work and grow business effectively, profitably and based
digitalization-related categories based on its content.
on data. Benefits of digitalization are visible especially in
marketing, customer service and communication and new ways
III. R ESULTS to improve work quality and services are sought continously.
The results of this study have been presented according Categories: Continual improvement, growth, differentiation.
to research questions. Our main results include 1) patterns
of digitalization among service employees, 2) digitalization
challenges and 3) actions service employees use to strengthen DN4: While services are becoming digital faster and faster,
digital culture in their company. it requires knowhow to understand technology and skills to
be media critical in a different way than before when there
A. How service employees see the role of digitalization in their were newspaper-based news and trained reporters. Because
daily work? there is enormous amount of information available, finding
relevant information and identifying it among all data has
Data for this research question was gathered from TUPLA become a central skill. There has been predictions that in
project’s group assignment where case organizations’ repre- future while artificial intelligence and robotics shall decrease
sentatives answered to the question What does digitalization routine jobs, a key success factor shall be how employee
mean you personally? Results are numbered and flagged with shall operate in the digital world in cooperation with artificial
identification code DN (Digital Narrative) + number. Each intelligence and machines. Digitalization has enabled us fasten
narrative represents one company. Categories were defined by the order processing and invoicing, planning workflows better,
authors based on the narrative content. decrease work-related costs by automating financial manage-
ment, creation of meeting memos and marketing. Categories:
DN1: In my own work, new requirements from customers
Automation, robotics, planning workflows.
mean that I can improve my own technical competence in
parallel with graphical design. For example, designing for mo-
bile devices is different that designing traditional print media.
DN5: Currently, various team collaboration platforms and
In my current work, I “grill “myself to use various technical
tools are visible continuously. There are new applications and
devices and explore how visual and informative content works
products coming all the time to market. I see as a challenge
in those. Additionally, producing videos challenges me both
that every user and team are willing to introduce a new tool
technically and narratively. The job description of a graphi-
that they like most. If the organization lets employees select
cal designer is much broader nowadays and this profession
tools for collaboration or communication freely, there will be
requires more and more technical and digital competence,
problems: information security and data protection may remain
smooth narrative skills, brave ideas and creative business think-
unclear due to technical features or usage rules. Cooperation
ing. Digitalization creates new environments and opportunities
can be difficult if there are various devices. Additionally,
for narrative story telling and marketing contents. These must
using several parallel tools for same purpose increases the
be managed by a graphical designer. New technologies and
work of customer support because not all employees are
channels challenge us to think in a different way than before.
able to adopt new tools easily. There may be differences for
This provides diversity and appeal to the work. Categories:
example between interoperability of web browsers and certain
Exposure for new technogies, creativity, job diversity.
applications. Categories: Freedom in choosing tools, managed
DN2: At the moment I work in customer support and train- introduction of tools.
ing and in that work the challenges of digitalization are visible
in a way that our customers and partner organizations are not
on the comfort zone with digitalization and related phenomena. DN6: The smartphone is an example of what digitalization
Customer expectations are often either really low or too high. means in my case. My smartphone now takes the place
Our customers do not seem to understand the easiness of digital of a number of former devices and performs a number of
services and aspects that increase productivity. Additionally, functions associated with other mediums - telephone, camera,
many customers are expecting unrealistic features from us and audio recorder, calendar, calculator, notepad, etc. Although a
get disappointed if we are unable to provide those. Cloud, smartphone is in essence a computer because it has memory,
Mobile, Big Data and Social are visible in our business for a CPU, display functionality and uses an operating system
example in file management and sharing. We are naturally that runs programs (apps) to perform different functions, my
using cloud services to manage our files and our business is smartphone has not yet replaced my laptop or a computer
based on systems designed for mobile devices. Digital learning for me. Because the data on my phone is synced to the
environments have to support mobile devices to survive in cloud (OneDrive, iCloud), I can access the same data from
competition. Categories: Customer expectation management, my smartphone as well as my laptop or a desktop computer.
cloud, mobile. Categories: Cloud synchronization, mobile work.
B. What types of challenges digitalization causes to service groups especially while implementing public digital services.
organizations? Categories: Usability, reliability, simpliness
Regarding the second research question, data was collected SG3: While developing a digital culture I consider impor-
from the pool of TUPLA project’s group assignments where tant to change the biggest barriers of digitalization. These are
case organizations’ representatives participated in. The goal organizational culture, people and lack of technical compe-
of the group assignment was to define the dark side of tences. Organizational culture can be slowly transformed with
digitalization. The following challenges were found: the changes to the culture and mindsets as well as investing in
organizational change management. However, I could expect
• Competence and skill levels are varying. Part of em- that organizational culture is the most difficult part to change
ployees are not able to stay in fast moving “digital- and affect. People can be engaged to development of digital
ization train” culture by keeping them in the change through training and
• Digitalization increases the number of information open communication. This reduces false expectations on digi-
security risks in services talization such as that digitalization shall take people’s jobs and
provides an alternative story on opportunities of digitalization
• Digitalization increases uncertainty and worrying in automating boring routine work tasks. Categories: Recruit-
about job stability. Are robots taking our service jobs? ment, open communication, reducing false expectations, slow
• Digitalization may lead to digi addiction where atten- transformation
tion may be paid to unrelevant issues SG4: While developing a digital culture, the most impor-
• Digital transformation highlights the role of data pri- tant thing is to get all employees to use same digital solutions.
vacy Transition to digitalization may be conducted in a phased mode
and slowly because employees are not going to transition with
• Difficult to balance digital dexterity vs. deeper learn- same speed and for some employees traditional solutions are
ing better. It is important to encourage, motivate and support all
employees to use digital tools for example through training
• Communication and uncertainty together may increase
and technical support. Transition to digitalization should be
the risk of being misunderstood
communicated to everybody in the organization. Categories:
• Being available 24/7 in digital service channels such Same digital solutions to everybody, motivation and support
as corporate social media may lead to increased stress for using digital tools, slow transition.
and burnouts
IV. A NALYSIS
C. How digital culture can be strengthened in service organi-
This case study was part of the results of Digital Workplace
zations?
Management workpackage in Digital Services and Productivity
Data for answering the second research question was for Business Needs (TUPLA) project (funded by European
gathered from remote day assignments of TUPLA project’s Social Fund). The main objective of TUPLA is to 1) increase
Digital Services course. The following suggestions (SG) to work organization and productivity through digital services
strengthen the digital culture were identified and documented. and service processes, 2) strengthen the competitiveness of
the companies in Northern Savo region by better utilization
SG1: As most important issue I would see improvement and increased competence of digital service technologies, 3)
of management’s digital skills and more open and stronger improve management systems of service management and 4)
development of digital culture. I believe in leading with an improve the employees adaptation to digital work.
example and without management’s commitment, support or
interest in improving the digitalization, the company can not The interface between digital transformation and IT service
identify best available benefits to improve the business. I would management is an interesting area because many companies
strengthen the digital culture by providing management with are struggling with demonstrating benefits from their digital
digital training and opportunity to explore devices, applications initiatives. Especially customer service and customer support
and systems that would make work easier. I would strengthen are fruitful research targets because digital transformation
the culture by engaging employees in the development of initiatives related to those areas are well visible for customers
digital solutions. Categories: Digital training for management, and affect very likely directly customer satisfaction.
engaging employees, leading with example, support for an
explorer culture Concerning the first research question (How service em-
ployees see the role of digitalization in their daily work?) , we
SG2: I would consider usability and reliability aspects aimed at finding evidence on changing work patterns, digital
very important while introducing new digital devices. If it is channels, platforms and touchpoints. Our findings (see Table
difficult to use the product and the product is unreliable, it I) showed that role of digitalization among service employees
may decrease the interest towards the product. However, the is very manysided. We found evidence on the effects of digi-
digitalization aims at making things easier. At least from an talization on roles and responsibilities ”..graphical designer is
end user perspective one incentive is simpliness. Of course, much broader nowadays and this profession requires more and
a consumer may make his/her own choices but in the role of more technical and digital competence...” as well as statements
a worker, one can end up using poorly functioning systems. on more demanding work tasks. There were several statements
Simpliness is also needed while implementing solutions for on the benefits of digitalization (improved communication to
groups with special needs. One should pay attention to these customers and between employees, less waste of time, trigger
for growth, enabler of continual improvement). From our find-
ings, we found support for all four digitalization megatrends
(Cloud, Social, Data, Mobile) to some extent. Additionally,
we found some evidence of automation (planning workflows
better, decrease work-related costs by automating financial
management) that is one of the crucial parts of digitalization.
TABLE I.
RQ Categories
RQ1 Role of digi Exposure for new technogies, creativity, job diversity
RQ1 Customer expectation management, cloud, mobile
RQ1 Continual improvement, growth, differentiation
RQ1 Automation, robotics, planning workflows
RQ1 Freedom in choosing tools, managed introduction
RQ1 Cloud synchron., mobility
RQ2 Challenges Increased number of infor. security risks
RQ2 Uncertainty and worrying about job stability Fig. 1. Digital Workplace Model framework
RQ2 Digi addiction, Lack of focus
RQ2 Data privacy, high availability leading to stress
RQ3 Dig culture Digital training for mgmt, engaging employees
RQ3 Leading with example, support for an explorer culture types and contains identification and creation of business
RQ3 Usability, reliability, simpliness, recruitment
RQ3 Open communication, reducing false expectations opportunities
RQ3 Slow transformation and translation, motivation and support
RQ3 Same solutions to everybody The Digital Processes layer describes digital service pro-
cesses and service process automation as well as highlights the
need for workflow management and service request manage-
Regarding the second research question (What types of ment. Workflows and scripts enable automation of routine tasks
challenges are related to digitalization in service organiza- and reducing manual phases from service processes. Digital
tions?), we observed that talks about automation and fast services cover cloud and Software as a Service services, task
digital transformation may cause job-related uncertainty that management mobile services, instant messaging services and
further may lead to increased stress levels. Incoming GDPR social media services. In our TUPLA project, the focus is
(EU data protection) regulation was mentioned in the context on digital services that may increase the productivity. Digital
of digital data security and privacy. Additionally, digitalization devices include mobile devices such as tablets and smart
was seen to increase the pressure to be available 24/7/365 and phones that act as mobile workstations for digital employees.
increase the likehood of being digital addicted.
Digitalization affects the way we organize, search, process,
Regarding the third research question (How digital culture share and archive the data. Various cloud storage models and
can be strengthened in service organizations?), we found pricing options are available. Organizations should carefully
valuable perspectives how to emphasize the digital culture. think and plan what type of data they store in which cloud
According to one narrative, it is the management that should storages. For example, in Azure cloud platform, there are 3
participage in digitalization training events. Management plays storage pland (hot, cool and archive). Archive is cheapest mode
also an important role in providing support and motivation for in terms of monthly basic fee but it will be expensive to search
digital initiatives. The digital culture was addressed to require and retrieve information from that storage.
an explorer culture where employees are encouraged to explore
digital tools not only during their workdays but also on their Digital platforms cover digital team collaboration platforms
freetime. such as Google G-suite and Microsoft Office 365. Modern
platforms are typically designed in a way that enables good
Figure 1 shows the Digital Workplace Model framework interoperability between the products within the platform. We
that was derived from research data (multiple data sources). aim at extending and validating our Digital Workplace Model
Digital Workplace Model is an operation model that supports during the TUPLA project.
flexible work organization. The model consists of 7 levels of
digitalization. V. C ONCLUSION AND F UTURE W ORK
The main objective of Digital Workplace Model is to in- This study aimed at answering the research problem:
crease employee satisfaction with digital solutions that enable How digital transformation affects service management and
flexible work. Especially young work generations value the customer service. This research problem was divided into the
freedom in anything they work with and increasing number of following research questions: 1) How service employees see
them are no motivated by money but flexibility and entertaining the role of digitalization in their daily work? 2) What types of
elements. Thus, the future of management is in front of challenges are related to digitalization in service organizations?
big challenges and new digitalization-oriented work models and 3) How digital culture can be strengthened in service
are needed. The Digital Workplace Model approaches the organizations?
digitalization from 7 different perspectives (workforce, busi-
ness, processes, services, devices, and platforms). The digital Concerning the first research question, we observed that
workforce includes digital operative culture, development of digitalization is changing employees’ job descriptions by
digial competences (deciding what work profiles are required broadening responsibilities and pushing employees to explore
to get to the organization, digital mindset and digital values. latest technologies (...key success factor shall be how employee
The Digital Business layer links the digitalization to innovation shall operate in the digital world in cooperation with artificial
intelligence and machines...), not only during work but also R EFERENCES
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Liiketoiminnan Avuksi, TUPLA (S21138) funded by European
Social Fund, Pohjois-Savon ELY-keskus and industry partners.

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