In Korea, information infrastructure industry has been expanding its business. However, service level of information infrastructure has not reached the expected level of customers in the context of CRM (Customer Relationship Management) yet. In this paper, we develop a structural equation model for Customer Satisfaction Index (CSI) to measure the quality level of information infrastructure reflecting the aspects of information infrastructure industry. Then, we compare the KII (Korea Information Infrastructure) satisfaction Indices from various customer groups using the structural equation model (SEM). It is expected that the results of our study suggest helpful strategies to increase the satisfaction level of KII customers.
The scope and depth of the Internet is exponentially increasing, thus motivating Internet service providers to provide differentiated service quality in diverse ways. The National Computerization Agency (NCA) has been providing Korea Information Infrastructure Government Service (KII-G) to government ministries, research organizations, educational organizations, medical organization and others since 1995. The goal of the KII-G project was to construct a nationwide information infrastructure with high-speed and high-capability broadband access to KII customers at reasonable rates. Currently the NCA provides services with more than thirty five thousand network lines (NCA, 2004).
The common practice of the internet service model in Korea is that the service provider also plays the role of network provider. For instance, Korea Telecom, Hanaro Telecom, and Thrunet are major service providers (SP) in Korea and they also build the network as the network providers (NP).
Unlike other internet services, however, the NCA is the exclusive SP for the KII-G project while Korea Telecom and Dacom are contract NPs for the NCA and are responsible for building the networks.
Consequently, KII subscribers purchase KII Service from the NCA, but one of the NPs installs the networks. There is even the possibility that some subscribers may have two NPs.
Ultimately, the NCA wants to satisfy their customers’ expectations. Therefore, in order to design a strategy for improving subscribers’ satisfaction with KII-G, an understanding of the relationship between SP and NP is crucial.
Recently, several studies have attempted to find factors affecting customer satisfaction with the service provider or network provider (ITU, 1993, Jang, 2000, Sohn, 2001 and Lu and Lin, 2002). However, none of these studies have considered satisfaction with respect to the combined aspects of the SP and NP. Also, many of these studies failed to provide a structural relationship among the various factors related to customer satisfaction along with these aspects.
If one can find the causal relationship among various factors and can compare the level of customer satisfaction over different types of SP or NP, the KII industry can establish more effective CRM by setting the priority on more influential factors.
In this paper, we propose a structural equation model (SEM) that accommodates aspects of both the SP and NP in order to evaluate the satisfaction of various customer groups.
Since Fornell (1992) developed an SEM to estimate the American Customer Satisfaction Index (ACSI), the use of an SEM has become popular for customer satisfaction in various areas (Sohn and Moon, 2003, Byrd and Turner, 2001, Choi, 2002, Gerpott et al., 2001, Kim and Yoon, 2004, Lu et al., 2005, Rondeau et al., 2005, Kim et al., 2007, Lin, 2007 and Joo and Sohn, 2008).
Based on the proposed SEM, the KIICSI (Korea Internet Infrastructure Customer Satisfaction Index) is calculated to compare various customer groups. This result can then be used to provide feedback information for the improvement of KII service quality.
This article is organized as follows: Section 2 presents a review of related literature. In Section 3, we propose an SEM for KIICSI. In Section 4, empirical analysis for KIICSI is performed and strategic perspectives for improving the quality of KII service are suggested. Finally, implications of the study and suggestions for future research are presented in Section 5.
In this study, we propose a model that enables us to estimate the KIICSI. This is done by first formulating the SEM and applying the concept used for CSI.
The KIICSI information for each customer group offers very useful information when establishing the KII development policy and distinct marketing strategy for a specific customer group. According to the KIICSI for each user group, research organizations and educational organizations’ KIICSI are lower than the other customer organizations. The satisfaction index of customers who have two NPs (Korea Telecom and Dacom) is higher than that of customers which have one network provider. Therefore the National Computing Agency needs to open the market to other NPs and to encourage customers to have more than one NP. When the KII market is open, the NPs’ competition will bring a better quality network service.
We also suggested strategies for improving KII’s service quality such as the use of a check sheet and priority map. Overall, when plans are established for improving the KII Service quality, it is better to improve the factors with a large impact and a low performance level. These factors are in the ‘possibility’ area: service performance, technical support, and security. Therefore, the service performance of the NP is the first priority for improvement of the KIICSI.
In this study we established an SEM model based on survey data regarding the customer’s perception of quality. However, this quality does not reflect the actual quality but rather the perceived quality. Future studies are needed to expand our SEM in order to consider various additional quality factors, which can be measured by a network management system.
