There’s a wave of change washing over the services industry. All businesses need to account for this disruption, because nearly every company is in the business of providing services – or soon will be.
For some, services already are their core business. For others, a shift from products to services or the addition of services to products is just getting underway. Either way it’s clear, services are increasingly becoming a vital part of the modern business, particularly as more industries embrace subscription models where products are rented rather than sold.
Beyond the simple advantage of an additional revenue stream, adding or boosting services helps companies to build lasting, sustainable relationships with their customers. Providing services is one key way to improve customer experience and to help drive repeat sales.
However, the services market is full of internal turmoil. Any company providing services today needs to continually re-evaluate and reinvent the type and pricing of their services to ensure what they offer still meets customers’ needs. Additionally, there’s often a changeable cast of competitors, from established domestic and international players to startups. Meanwhile, companies offering services now need to respond to the vast waves of change poised to disrupt every business and every industry on the planet from big data to digitalization to whatever emerges next.
To keep from being overwhelmed, progressive companies are turning services disruption in their favor. These huge disruptive waves of change include:
- An enhanced focus on creating highly client-centric and personalized businesses.
- Big Data and the use of insight gained from actionable, sophisticated analytics.
- Employees’ and partners’ high expectations of consumer-like, mobile-first business software.
- The blurring of lines that once delineated (and effectively siloed) different industries.
Please note, I do not include ‘cloud’ because I believe, as do increasing numbers of professional services businesses, that cloud computing is now a must. In fact, I’d argue that not only is cloud the primary technology enabler to help companies transform, but that true business transformation is impossible without the cloud. By moving to a cloud-based platform, companies have the underlying business process and technology framework in place to ensure their organizations can flexibly adapt and rapidly scale their operations ahead of or in response to changing client behavior and market demand.
Anticipating and responding to profound change
All these waves of change are already beginning to have an impact. Companies need to start rethinking their business and their client and partner engagement strategies as well as their internal organization now. Just consider how some of the leading players in the field – the global systems integrators and management consulting firms – are beginning to reinvent themselves, particularly by investing in digital design capabilities.
By broadening the portfolio of services to include more creative services, companies like McKinsey, which recently acquired leading product design and engineering firm Lunar, can deepen and extend project engagement with their customer base. They’re powering their clients’ transformation by combining new design and engineering capabilities with all the traditional business, strategy and technology consulting expertise that services companies already have on hand.
Including design and design thinking in their practice is a way for services firms to more actively help clients provide optimal customer experiences. At NetSuite’s recent SuiteWorld user conference in San Jose, California, David Moore, Principal at Deloitte, the world’s largest professional services company, explained the rationale behind Deloitte Digital. This is the firm’s digital agency, which helps clients address market disruption by drawing on the diverse skillsets of artists, cultural anthropologists (with their expertise on how the human brain works) and data scientists. According to Moore, services businesses need to become more agile and apply design thinking to their work while maintaining a relentless focus on value to benefit both the client and their own company.
Cloud as transformation enabler for companies large and small
But how can firms without the resources of these global system integrators keep up? The cloud. It enables smaller and midsize firms to both look and act as much larger enterprise entities.
In the services arena, cloud services resource planning (SRP) is the combination of customer relationship, finance and project management business processes and all the data produced by those processes. Cloud SRP provides everything a services provider needs to work closely with partners – scalability and flexibility along with real-time visibility and unification across their business. By sharing relevant client, project, sales and financial data with one or more third-party creative design agencies, a smaller dedicated services business or a company’s services arm can operate as an end-to-end digital transformation enabler, albeit more of a virtual company.
I see other areas ripe for reinvention with the cloud in traditional-style services businesses. They include:
More vertical merging. Services businesses are constantly evolving as their staff hone and increase their skills across projects. Often that work leads to the need for specific solutions, meaning a services business may find itself also becoming a software provider or a retailer or even a manufacturer. By running cloud-based SRP, such organizations are not hard-wired into systems that only support a services business, the underlying business processes can equally run a products operation or can be easily customized to support specific vertical or microvertical needs.
Project personalization. Increasingly services businesses need to rethink how an individual client’s expectations for a specific project meet the larger picture of corporate needs. Setting the stage for close collaboration between the customer and the services provider via sophisticated project workspaces and smartphones and tablets is the first step toward true customer centricity for a project. Having a single unified version of data truth, enabled by the cloud, is vital.
Expanding analytics. By combining historical project purchase data with real-time news feeds, services businesses can be alerted to organizations demonstrating pre-purchase behaviors. I also expect greater use of predictive analytics to help determine where the new project opportunities lie whether on a national, international or global basis. Again, here the cloud is key in providing a source of real-time and accurate data to which analytics can be applied.
In all these areas, the ultimate goal is how services businesses can successfully reinvent themselves so they can quickly establish, deepen and maintain closer ties with clients to ensure a mutually beneficial ongoing relationship. My belief is that the cloud is the way to enable and support that transformation which will result in a highly customer-centric and sustainable services provider able to surf on the waves of continual market disruption.
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