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Becoming a Services-Led Organisation in a Digital World

Becoming a Services-Led Organisation in a Digital World

Digital business is changing the rules. It is causing disruption in all industries, and forcing businesses to transform to survive. Many industries are having to shift from selling products to being focused on enhancing the customer experience with a combination of products and services. These digital-led services will become the driver for revenue growth in the years ahead. McKinsey & Company estimates that “services are expected to account for about three-quarters of global growth over the coming decade.” It’s time to focus on becoming a services-led organisation. 

The increase in customer expectations and the constant pressure on product pricing has resulted in revenues and margins on products being significantly eroded. Rapid advances in technology have seen an increasing use of sensors within products that can be used to deliver information back to the provider, both in terms of product performance and health as well as the customer experience. The ‘Internet of Things’ and enhanced machine-to-machine communication provides many opportunities for businesses to create new services offerings and with them recurring revenue streams.

To be successful in transforming a traditional company in to a digital business is challenging for many. It requires a change in business models, process, and culture. Many suffer from an inertia that is hard to escape. Businesses have to follow the approach of the new entrants into their markets who:

  • Have a focus on service innovation that matches the intensity and attention that product companies bring to R&D
  • Seek to personalise the customer experience and to help customers be more autonomous
  • Simplify the way services are delivered

This requires a far more collaborative way of working, not only within the company lines of business, but also with a partner ecosystem and ultimately the customers themselves.

Those companies who are evolving from being products-led into a services business will require new structures, skills, and business practices. Effective services organisations must have strong processes and supporting systems in three key areas:

Only when these approaches and processes are in place, along with the systems implemented to support with the reporting and analytics that enable business decision making, will an increasingly services-led digital business be able to grow recurring revenue, operate efficiently, increase profitability, and manage the risk new entrants disrupting their market.

What is your organisation doing to become services-led? Share by leaving a comment below.

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Steve Beaumont
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Steve Beaumont is the SRP Solutions Market Manager at Planview and has worked in the Professional Services area for almost 25 years. He spent 12 years working as a Management Consultant for Deloitte, Coopers & Lybrand, and Ernst & Young, where team managed a team of consultants and had responsibility for managing the work pipeline, making resourcing decisions and ensuring that projects were delivered to a high quality whilst also managing the P&L. He also has spent a number of years working in the software industry helping to sell, implement and drive the enhancement of software solutions designed to help both PSOs and IT organizations to manage their businesses and delivery successful projects. Steve’s career started as a Management Accountant, from which he progressed into designing accounting software for use within the telecom company that he worked for.