The Future of Service Part 1: The major markets developments and expected changes in service propositions (Summary)

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Introduction

The service business is fast growing with a promising future, but the majority of companies have costs growing faster than the revenue growth line. This research attempts to provide methods to achieve success in this exciting area of opportunity that for a long time has proved difficult to consistently achieve, and looks at why some companies are able to achieve profitable growth while others are having to cope with shrinking profit margins.

The research project involved more than 100 senior service executives from leading companies in discussion about their challenges in a series of roundtable discussions in London, Gorinchem (The Netherlands), Paris, Madrid, Las Vegas, and Charleston, USA. We reviewed which service strategies and best practices help to maintain the profitability of the service business, while maintaining growth rates. This first part of the research focused on business strategy, developments in markets, customer needs and service value propositions. The research team comprised senior consultants from Downton Consulting, Noventum Service Management Consultants, Taurel Service Management Consultants, and Service Strategies Inc. surveying thousands of managers on-line and through in-depth (phone) interviews and analyzing the findings. The final report, created by the research team, was validated by the roundtable members with many of them contributing practical examples of the strategies and best practices that are explained in the report.

The second part of the research program, to commence in September 2008, will focus on service delivery organizations, including customer feedback mechanisms, service delivery processes, performance metrics, employee development, people programs, productivity tools, information systems, corporate governance, quality management, interfaces with product development, sales and marketing, service logistics, inventory effectiveness, financial management and partner management. We will again use a series of worldwide roundtable discussions to identify new ideas and best practices, and validate our findings with a worldwide survey. 

The conclusions of this research represent a break-through for the industry. Technical services is a dynamic industry representing significant activity in the western industrialized economies, but very few of the successful service companies fully understand the reasons of their own success; this research will contribute to a better understanding of service industry dynamics, what drives success and will assist companies to develop and implement successful service strategies. Research conclusions will be presented during a number of management conferences in Europe and the USA from October 2008 until the first months of 2009.

Table of contents

1. Index
2. Introduction
3. Conclusion: Pursuing the right service strategy will deliver profitable growth
4. Increased Revenue growth
5. Increased Profitability
6. The technical service industry is undergoing a transformation
7. Definition of the types of service strategies
8. What is a High Value-Added Services (HVAS) strategy?
9. What is a Relationship-Based Service Strategy?
10. What is a High Performance plus Extra Benefits (HPEB) Service strategy?
11. What is a High Performance plus Lowering Prices (HPLP) Service strategy?
12. How to transform from a traditional to a highly profitable growth strategy in the service business?
13. Become the service provider of choice
14. Transition from tangible benefits to intangible benefits
15. Movement from generic services to market segmentation
16. Technical service providers superseded by marketing-driven organizations
17. Change from technical competencies to relationship building competencies
18. Product centric focus becomes services centric
19. Hardware to Software
20. Service once seen as a cost and therefore as a necessary evil –is no longer so as it is now able to provide identity and status to the customer
21. Service once seen as a cost and therefore as a necessary evil –is no longer so as it is now able to provide identity and status to the customer
22. About the research team
23. About the research methodology
24. About the respondents