Measuring Cost of Quality against Service Quality in a Telecom firm

This thesis set out to find a solution to a business problem the case company presented: currently in wholesale commercial products there were no ways to validate how investments impacted the service quality. During the current state analysis, we gathered data by interviewing several key stakeholders and reviewing some important company documentation such as service descriptions, customer satisfaction survey and finance. As an outcome of the current state analysis we found out that the service quality was not connected with the cost components and thus measuring investment impact was impossible. Additionally, we detected some issues in the current way of cost allocation. We also looked in to the current KPIs in both finance and service quality dimensions and quickly understood that between the units several processes and KPIs were mismatching. In the existing knowledge we looked to the literature about cost estimation, cost allocation, Cost of Quality and Service Quality. Plenty of literature about these key areas were found and we were able to understand well what sort of actions generate costs and in the Service Quality perspective what KPIs are measuring it. Outcome of the existing knowledge was a conceptual framework that connects Cost of Quality dimensions with Service Quality KPIs. The proposal building was done in an internal workshop with key stakeholders and based on our conceptual framework. We built a tool that addresses both estimation issues and links the Cost of Quality to the Service Quality in a manner that allows comparison between the departments too. The tool is based on conceptual framework’s CoQ-SQ -matrix that contains both Cost of Quality dimensions and Service Quality KPIs. It enables linking the KPIs and reviewing only portions, or the whole matrix at once. Lastly, we validated the tool proposal with key stakeholders of the units and gave some other validity related comments regarding our outcome