Exploring the Dependencies of Service Transformation

This is a time when industrial companies, manufacturers and businesses all stand at a pivot point to transform themselves into service-led businesses. This need for service transformation or servitization is the outcome of the consumers' changing expectations in terms of their choices, flexibility, transparency, speed and personalization. Enlightened and empowered by digital, today's consumer's expectations are more focused on the value they are receiving through services and support. Even when they deal with product-based businesses, customers are more concerned about the outcome than the product itself.

As businesses focus to derive their customer experience strategy for improved customer loyalty and advocacy, they understand that service transformation is the way out to differentiate themselves from the competition as well as to stabilize cash flow and enhance resilience. With service transformation, companies are attempting to develop service-driven business models, especially digital-driven services.

Service transformation: The dependencies in the process

To score on customer experience and to add stable and resilient new revenue streams, businesses are enthusiastic to attempt service transformation, but it’s no cakewalk. Some businesses don't even have the functional and technical knowledge necessary for service transformation; for many, this transformation would mean changing their complete business culture. Some businesses struggle to create the balance between core and new offerings, and then there’s burden of raised operating costs. Businesses struggle to find the right path for service transformation, but the simple way to go about it is to explore and understand the dependencies; to see what can be managed by themselves and to understand what additional expert support they need.

Below are some of the core dependencies that industrial businesses face as they go about service transformation.

Developing service capabilities

Service transformation will take a business into the path of adopting a service-driven business model, it can be digital services, field services or a mix of both. Thus, the first dependency that manufacturers or product-based industrial businesses face is how to build sales and service-delivery capabilities. Field service management, integration of data and analytics into transformative strategies, understanding the IT resource and human skill requirements, training and development are some of the operational dependencies that businesses face.

Compliance

Needless to say, service transformation is a high-scale project that calls for a range of legal compliance. Businesses struggle to find the right collaboration model for legal agreements. 

Investment focus

To support new services and offerings, businesses need to make investments, but they can't go overboard and need to be thoughtful. As a new-bee in the service-based business, they need to carefully align their investment focus, until they gain maturity.

What should be the investment priority, does a business need to invest more in field service management ranging from inspection management software to self-service apps to improve its service-delivery performance and customer care operations, or should it focus on developing seamless experiences across digital channels?

To address this sort of confusion, businesses need to work on a lot of considerations like what are their service offerings, who their high opportunity customer segments are and what the cost is of service with the value of customer relationships.

Service management practices

For a business, its endeavor of service transformation is as successful as effective are its service management practices and related key performance indicators. To devise the right set of service management practices, businesses need to realize their value-oriented service transformation needs, for which they need to consider the following high-priority focus areas:

• Integrated sales approach: Today's customer value transparency, so it’s important that businesses adopt an integrated sales approach that not just promotes strategic service sales, but also delivers cost transparency, maintains customer intimacy along the service lifecycle and ensures product-service alignment.
• Digital services: Not considering the digital aspect is almost like heading to a roadblock. It’s a high priority to develop a digital, cloud-based IT infrastructure for workforce operational efficiency, as well as for systematically channelizing new services to the customers.
• Effective, scalable service delivery: Speed, flexibility, personalization and transparency are the key points that interest a service consumer. Thus, businesses need to develop an agile, effective and scalable field service delivery process that gives consumers some sense of control. This can be achieved by enriching the delivery process with self-serving capabilities for customers, real-time transparent communication, and the scope of personalization by using powerful tools for field service scheduling and dispatch.

Final thoughts

For businesses, it’s important to understand that service transformation is getting popular as a solution to achieve more resilience in the competitive market and an effective strategy to compete on customer experience. As a result, soon every business will strive for service transformation within their capacities. The earlier a business can master service transformation, the less it has to deal with the risk of falling behind. Companies must not procrastinate and get into action, build a proactive service ecosystem and prepare themselves for the road ahead.