Operational efficiency and service delivery performance

Abstract

Purpose – The purpose of this paper is to evaluate performance of Indian telecom service providers through a benchmarking study of their operational efficiency and service delivery effectiveness. The paper also carries out a peer-to-peer comparison and identifies-specific areas of improvement for different service providers to attain sustainable growth and profitability. Design/methodology/approach – A two stage data envelopment analysis (DEA) model was used to compare the performances of the service providers. The first stage represents how efficiently a unit is able to use its infrastructure and resources to generate better quality services. The second stage captures how well the company is able to communicate and deliver these services to the customer. Findings – The results of the study support the applicability of the two stage DEA for comparing the performances of the telecom service providers as they are in line with the financial performance indicators and brand ranking. It is observed that those companies which score high on both operational efficiency and service delivery effectiveness have achieved superior profitability. Research limitations/implications – This study has been carried out at a pan-India level and hence does not take into account circle level or local performance which varies significantly for most service providers. Besides, this the analysis was constrained by limited data in the public domain, which necessitated estimations and extrapolations for some variables of few service providers. Practical implications – The study has helped to provide inputs for the Indian telecom companies for potential performance improvements by providing a comparative analysis of their operational efficiency and service delivery effectiveness. It has enabled to derive deeper insights on potential target areas for managerial attention that could be translated into implementable actions. The benchmarking analysis has also helped to understand whether the current performance of the service provider is sustainable, unprofitable or ephemeral. Originality/value – This paper goes beyond the traditional benchmarking studies of Indian telecom service providers introducing a two stage DEA model to understand the operational efficiency as well as the service delivery effectiveness. The study has helped to derive valuable academic and practical insights on the issue of performance measurement of the Indian telecom service providers.