Defining Service Transformation

The Service Council’s (TSC) recent research of over 150 organizations on Service Transformation yields that 70% have an initiative in place to elevate the role of service and support and that 51% actually have a formal initiative in place to transform their service organization. Transformation can come in the form of the way the service organization is structured all the way to new service delivery processes, new service offerings, variable pricing strategies and much more.

Before getting into the details of service transformation best practices, we asked responding organizations to define the term ‘service transformation’ as it related to their business and the following word cloud represents the top results:

Service Transformation word cloud

Some of the most pertinent quotes were as follows:

“Developing a customer-centric strategy while moving from a transactional to a relationship-oriented model.”

“Having the business see ‘Service’ as a priority with a great deal of focus on Total Lifecycle Costs.”

“Having service involved in every level of the product lifecycle.”

“Creating and sustaining long-term value via best-in-class service delivery processes leveraged by optimal usage of capacity within a given cost structure.”

Note: none of the definitions involved the use of drones to deliver service as revealed in the Amazon Prime Air interview on 60 minutes.

Reviewing the definitions and the word cloud, we see four primary levels of transformation.

1 – At the Organization Level: tied to raising the focus on service and treatment of service as a strategic contributor to the business

2 – At the Service Execution Level: moving from reactive to responsive and predictive in order to better meet customer needs.

3 – At the Business Strategy Level: integrating service information and feedback across various business functions in order to improve output, quality and customer experiences

4 – At the Customer Level: defining service’s role as taking a stake in the customer’s operations and thereby equating value with customer success

Most organizations are still working through the first two levels of transformation and are dealing with significant cultural resistance in driving true organizational change. Surprisingly this resistance continues to come in the form of a ‘lack of focus on service’ across the organization. Given the role that service plays in supporting customer loyalty, increased revenues and improved profitability, the lack of focus on service is unacceptable and a precursor to failure.

Figure: Challenges Preventing Service Transformation

Service Transformation ChallengesOrganizations need to have an ‘everyone is in the business of delivering service’ mentality to truly embark on a successful service transformation initiative. Having the right tools and technology certainly helps, but establishing the service or customer-first mission of the organization is a vital first step. When we asked respondents about the first steps recommended when embarking on a transformation, establishing a service culture was highlighted as a top step along with the following:

  • Establish senior service leadership and get executive buy in
  • Develop clear goals for your transformation
  • Baseline current performance and processes
  • Understand customer needs and current gaps in meeting those needs

These bulleted steps are vital not only in support of a service transformation, but also in aiding the development of a service or customer-centric culture across the organization. With the aid of these steps, organizations can truly take a stake in delivering and enhancing customer success.

Further details on transformation steps and broader results of our research survey will be made available on www.theservicecouncil.com.

Sumair Dutta will be hosting a workshop “Solving the Service Culture Dilemma: Best Practices for Elevating the Role of Service” at PTC Live Service Exchange 2014 on June 16th. To learn more visit http://liveservice.ptc.com/Home.aspx.

 

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