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HOW TO DIGITALIZE YOUR SERVICE BUSINESS: KEY CHALLENGES AND HOW TO DEFINE WHAT THE SERVICE BUSINESS NEEDS- PART 1.1

How to digitalize your service business: Key Challenges and How to define what the service business needs- Part 1.1

Many companies struggle with designing and implementing an integrated digital platform to support their services business.

Our Drivers for Growth in Service research amongst leading service organisations has taught us that 66% of the companies have defined a digitalisation strategy to enable them to deliver new business models. However, only 15% have implemented it to some extent and only 7% say that they have the full digital IT infrastructure in place. In addition, only 29% have implemented the required solutions but not in an integrated manner.

To be able to grow the service business, or even survive in a post COVID-19 period, it is critical that service organisations get started with the digitalisation of the service business.

In our series of upcoming blog posts on the ‘Digitalisation of Service‘ we will discuss the challenges that service organisations face in getting started with the design of a digital service platform, and make suggestions on how to address these challenges.

In this blog, we explain what companies encounter when starting to design and implement a digital service platform and the key challenges they must navigate during this phase.

In addition to reading this blog, we also encourage you to listen to the related podcast in which we also discuss this topic.

Digital Service Platform

So, how do we define a Digital Service Platform? We describe it as a software solution that enables a service organisation to market, sell and deliver different types of services to their customers in an integrated, efficient and customer focused manner.

Reasons for not being successful

We were quite shocked to uncover that only 7% of companies have a fully integrated digital service platform. But from our experience and the work we have conducted with many service organisations, we’ve seen several examples of why companies have not been able to achieve this.

In some cases, service organisations failed to create a positive business case to design, build and implement an integrated digital service platform. The complexity, time and investments needed are significant and service organisations find it difficult to quantify the business benefits of such a digital platform. As a result, either nothing is implemented, only specific parts or the service process are automated, or some pilots or proof of concepts are developed.

Another reason is that companies do not have access to the right business and technical knowledge to define what the service business needs or to determine how technology can be used to build an integrated digital service platform.

The existing IT architecture is too complex and thus limits the organisations’ ability to innovate and adapt. This makes the digitalisation of service more challenging, costly and risky.

Many organisations have taken an IT driven rather than business driven approach. The capabilities of the technologies and how the technology works end up overriding the business requirements. The result is sub-optimal; parts of the service process and organisation can be supported with the applications in place, but there are still gaps and it is not always fully integrated.

Challenges

Companies may face many challenges when trying to start creating a digital service platform. We typically see three types of challenges:

  1. Defining and managing the service business requirements. Companies are often unable to understand what capabilities and functionalities they need to achieve their business objectives and often fail managing these requirements throughout the lifecycle of the digital service transformation.
  2. Designing the Solution Architecture. Designing the solution architecture is complex; there is an existing IT architecture that needs to be taken into account. Several existing applications may already be capable of fulfilling part of the technology puzzle, but together they can’t support all that is required. To select the technology that can fill in the gaps to create an integrated solution is time consuming and requires both business and software market knowledge.
  3. Data Management and Integration. To deliver a service efficiently, effectively and provide a state-of-the-art customer experience, data is critical. The data must be complete, accurate consistent and secure.

What’s next?

So how should companies address these challenges?

Find out in our next blog posts on the ‘Digitalisation of Service‘ in which we go into more detail about this topic.

Other blog posts in this series

Podcasts in this series


Start today! Discover your service transformation challenges and solutions in your own company by using the Digital Service Transformation Centre, do a self-assessment and discover your service transformation journey.

Listen to the podcastRequest your free STC Demo here