Still, incumbents can bring more simplicity to their service operations by looking at the world the way their customers do.Consider the experience of the healthcare distributor that faced increased pressure on margins and rising customer expectations. These and other innovations significantly raised customer satisfaction, while helping the retailer to enhance store operations and refresh store formats much more quickly than it had before. We achieved so much that the eight weeks flew by...”Senior client stakeholder after completing our workshop
The initiative helps the company to strengthen its relationships with merchants and serve them better, while also staying relevant to younger, digitally savvy customers.Some incumbents go further by giving consumers even more control over services (see “Digital attackers tend to thrive on simplicity. Institutionalizing service innovation, for example, requires more than setting up a new R&D lab; the lab’s efforts must be hardwired into the company’s services strategy, investment cycles, sales, and operations.
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As a result, customers had a new online portal with self-service tools at their fingertips in less than six months.
For example, each of the internal groups involved in providing the service used its own metric to gauge success.
Companies that evolve quickly will better position themselves to capture this growth, while those clinging to traditional models will face growing pressure from digital attackers.
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The culprits are members of a new wave of digital upstarts that capitalize on changes in technology, customer behavior, and the availability of data to create innovative, customer-friendly alternatives to the services incumbents offer.
Financial Services
Partner, Strategy& Germany
A growing number of companies are finding their service businesses under threat.
While that wisdom still holds, the advent of massive new datasets and the spread of mobile devices mean that services can now be personalized cost effectively to a much higher degree.A large credit-card provider, for example, partners with retailers to create personalized, real-time discounts for products and services through a mobile app. Services, which currently represent about 65 percent of global GDP, are expected to account for about three-quarters of global growth over the coming decade.
Aerospace & Defense Electric Power & Natural Gas
Even the most forward-looking incumbents find that implementing an innovation mind-set can be daunting.
Digital Imagine the reaction of a time traveler from 50 or even 20 years ago upon visiting a contemporary hospital.
Oil & Gas
Analytics
The moves also generated significant labor savings and increased employee satisfaction.Similarly, a large provider of commercial and residential services was struggling in the face of increasing customer expectations, customer dissatisfaction, and churn rates.
Yet for many companies, managing day-to-day operations is all-consuming.
The “essential eight” technologies (augmented reality, drones, virtual reality, the Internet of Things, robots, blockchain, and artificial intelligence) are driving rapid cross-functional innovation and leading to smarter organizations.
But to be successful, companies must make digital investments wisely, be clear about their goals, and carefully manage change among employees.
Technology, Media & Telecommunications
To respond, company executives created a permanent in-house innovation team staffed with colleagues from different parts of the business, including customer care, scheduling and dispatch, finance, and marketing.The team works its way through the service offerings of the company’s different business units on a three-month rotating cycle, troubleshooting problems and working with the businesses to spot opportunities.