2015 – A tipping point in service innovation

Profile picture for user cebess By Charlie Bess April 6, 2015
2015 will be viewed as a tipping point year for service innovation. This is a culmination of all the technological trends of the past decade, coming home to roost, blooming into services innovations for organizations in every industry.

Future technology blue digital service screen concept © Denys Rudyi - Fotolia.com
2015 will be viewed as a critical point in the evolution of service innovation. The events leading up to this point have created a perfect storm of change and rapid adoption. Fortunately, this has happened in the IT organizations first. That means there is service-shift expertise in house already, leadership wants to tap into their experience.

Organizations that view services as someone else’s problem are going to be left in the dust. Those that realize the technologies of IoT, automation and analytics are causing change to the expectations of business value and the services possibilities surrounding them that enable stickier relationships. We’re already seeing new services spring into existence. These are enabled by the flexibility of solutions like 3D printing, SDN, OpenStack and Software Defined anything (SDx.) That is only the tip of the iceberg.

Tectonic shifts in service innovation

There is a transformation taking place in the view of service possibilities. Governments have started to do basic, research investments in service innovation. They know the models and techniques currently in use are not up to the task. Most organizations need to look into new ways to take advantage of the abundance of information technology capabilities.

They want to improve the understanding and capability of their business by using a services mindset. The standards to facilitate these shifts are still in the embryonic stage. Organizations like ISSIP.org are trying to move this ball down the field.

One of the areas of particular interest will be defining services that gather and take advantage of information from wearable devices that interact with their environment. These services will provide a more proactive contextual understanding. This will be part of a shift in the Internet of Things that will stand up from its current crawling position to (at least) toddle along. Services will move closer to an Internet of Everything (and Anything), focusing on an action-oriented, data-empowered environment.

There is also the shift of business resources away from process workers to an automated environment consuming more and a different kind of analytics. It moves to a human-augmented automation approach in many areas rather than the other way around. Those interested should invest in the book, The Second Machine Age.

These new approaches will consume a range of information: historical, derived and predictive. These methods will provide greater insight and transparency to customer actions and intent -- enabling businesses to proactively provide services and take action.

data and insight
Data and insight - via Charlie Bess

Supporting the consumer

For the consumer, the move to service-enabled platforms supports a more informed digital life. A trend that has been underway for at least a decade will continue and accelerate. Using the techniques described above, continuous monitoring and assistance will will be the norm.

There will be concerns expressed about monitoring moving from optional to required, to receive certain kinds of services. Similar to the anxiety some express about autonomous cars and the perspective shifting from an ‘are they safe’ to ‘should they be compulsory:?’

Although we’ll not see mandatory automation/tracking… in 2015, the discussion and concerns will move from pockets of zealots to a mainstream discussion. Everything from healthcare services to insurance will be impacted as cognitive systems become more integrated into nearly all business processes.

Innovation in manufacturing

The services for manufacturing and product production will undergo a shift in 2015. Mass production will still be king, but personalized manufacturing will shake up planning in the global economy. According to Gartner, sales of 3D printers will double each year between 2015 and 2018, and exceed sales of more than 2 million. I recently bought a Raspberry PI and I am printing a case for it today, as I write this post.

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The impact of this approach to distributed manufacturing will trickle down into transportation and logistics. We’ll see the products become platforms for further customization. Much like you’ve been able to have Coke or M&Ms personalized for a while now, mass-personalization will be available for a greater percentage of products both physical and services.

With the additional of sensors, greater connectivity and computing, personalized platforms will further expand the momentum for intelligent services. Custom platforms will allow greater consumer engagement with the producer as well as with the other consumers of the product.

BPO doesn't get left out

In the predictive and analytic space the solutions will shift to enable greater flexibility in engineering the attention of service desk personnel as well as the people who call in. Next generation BPO/call centers will rely on greater levels of automation and less on low cost workers.

That shift is just starting in 2015, but we can expect the products targeted at this more robotic interaction will become more prevalent and functional this year.

These capabilities will move into other business processes as well, enabling HR and Finance in particular to become systems of action for the enterprise. That shifts attention to addressing business goals while at the same time providing greater insight and transparency about shifts in usage and consumption.

Security and privacy

No discussion of the future is complete without some mention of security and privacy. As enterprises move workloads to the cloud, enterprise-level security needs to follow. Most organizations do not have their processes at this level of maturity. Security and privacy will bloom into a larger service industry than it is today.

There is a saying today that if anyone says they have no security concerns that’s because they are ignorant of what is really going on at their company. That won't fly any longer.

Although cloud computing helps address the issues of limited energy and resources, security and privacy protection services will become a critical concern. The same will be true at the micro level as embedded devices leak more behavior information into the environment and the need for their protection becomes clearer.

From a services perspective though security services can prevent bad things from happening. They should have enough contextual information to enable good things as well. This is an opportunity rarely looked at by those concerned only with security.

Redefining user experience

The final area I wanted to mention concerns the interfaces to these services and the changes to expect. We will see a reemergence of augmented reality. Virtual reality research received a great deal of attention in the 1980s, but didn't take off due to the expensive hardware, poor sensing, and limited display capabilities.

All of these limits have now been largely addressed and the ubiquitous mobile device (e.g., the smartphone we all carry) makes it a natural for our ‘always on’ world. Juniper Research states that annual revenues from mobile augmented reality (AR) services and applications will reach $1.2 billion by 2015, moving beyond the demonstration devices by Google and others to the edge of mainstream.

One aspect of this services shift that needs to be considered is the difference between the desired objectives and the unintended consequences that result. This will be a rapidly changing space, so an iterative approach that starts small and works up will be required for most organization’s adoption plans. Spending time monitoring the success (and failures) of others will be a good investment in 2015, since these changes should impact every industry.

SAP has invited me to their SAPPHIRE conference to understand and assess what they are doing in the services space, addressing (and hopefully taking advantage of) some of the areas of abundance mentioned in this post.  I’ll be writing about what I see in early May on diginomica, as well as my personal blog and twitter feed (@cebess).

Disclosure: SAP is a premier partner at time of writing

Image credit: Future technology blue digital service screen concept © Denys Rudyi - Fotolia.com, Coke bottle from 'Shareacoke' campaign.