2014: Growth through Services: Opportunity, Reality Check or both!

Jan 31, 2014 • FeaturesManagementgrowthrough servicesNick FrankNoventum

As we come to the end of January, Nick Frank, consultant with Noventum Service Management looks a little further ahead at what the rest of the year may yield. 

At the backend of 2013, did you notice that the field services community was increasingly talking about the critical role of knowledge in creating a thriving and profitable services business. Solution providers were all telling us about analytics, transparency and the benefits of working in the connected world. Buzzwords such as ‘Big Data’ and ‘The Internet of Things’ were being bandied around as if we all should be experts.

Companies started talking openly about their development of remote solutions to improve their customers OEE and create new revenue streams. This ‘enlightenment’ I am sure will continue into 2014, but with it I believe will come the realisation that it’s NOT AS EASY as purchasing the latest IT system or implementing some workshop/training programmes.

No, I think that although companies will increasingly see the possibilities that future corporate growth will be in a large part enabled by new services, they will realise that to participate, they must do something different! More and more we will hear companies talking about the need for a step change or transformation.

This is because to gain the full value from these technologies, companies need a fundamental shift in their People, Culture and Processes!

Knowledge savvy People and Culture:

The bulk of the value to be won lies in the customer’s process and operations. Developing services that help the customer’s business be more effective requires a shift to an OUTSIDE-In culture. The customer’s processes and how they experience our Brand must be at the heart of our own product and service strategy. Easy words, but not so easy when you consider that most of us whose careers have grown through products, do rather have an INSIDE-Out view on technology, manufacturing and making things work.

But in developing this understanding we have to change our whole view of knowledge and how we manage it. The first step is to appreciate its importance to our own organisation and customers. What is important to protect, and what can be shared. I say this because to achieve change in an increasingly complex technological world, the concept of co-creation and partnering is becoming stronger. We are seeing companies and customers coming together to form eco-systems to solve complex problems. But this requires the management of knowledge and knowing what and how it can be shared; a capability that many businesses struggle to deal with.

Processes for a new paradigm:

Mind-set may start transformation, but it’s the execution of processes that will bring value. To really benefit from these emerging technologies, it’s logical that processes will be re-engineered for the new technology paradigm. And we are not just talking about the flow of activities. This must include the management rules that underpin the processes, the KPIs to manage performance, the competencies of the people, as well as defining the businesses functional requirements for it’s IT and support systems. Get this last factor wrong, and all the latest technologies and concepts will not help your business move forward.

Sounds complex and expensive. This is where some recent research findings from Noventum bring some interesting insight as to what is needed to move forward. Between April & December last year, we talked with over 150 business leaders and service professionals about which strategies were driving business growth and the role of services.

Two findings stood out in relation to this discussion:

  1. Service is becoming recognised as a strategic solution to facilitating a company’s growth strategy.
  2. Companies have an increasing desire to develop more advanced services that address their customer’s processes, but show a reluctance to move forward until Product related services are mastered.

We believe the insight these findings provide for 2014 is that, as companies recognise the role that Knowledge and Technology can play in their future profitability, they will get excited….

….and then there will be a sharp intake of breath as they start to evaluate the implications.

However, if they begin to see service as a strategic lever to support the company growth goals, then the investment implications actually becomes more manageable, and are probably smaller than for many product R&D projects.

Secondly by breaking down the transformation into smaller steps, and re-engineering their delivery process and functional requirements, they can harness the technology to achieve results today, but which are scalable to their future growth vision.

At the end of the day, time will tell if this view of the world will be true, but if you would like to get a head start and develop your own thoughts, Noventum will be running a series of events on this topic which can be found at http://www.noventum.eu/calendar