Which Came First – Service or Technology?

The age-old “chicken or the egg” question comes to mind when thinking about the relationship between technology and service.  The modern age has been called both the Age of the Customer and the Age of Technology.  Regardless of what name you give it, it’s an era of rapid growth and fast-tracked service.

Ask any best-in-class organization how they view technology and service – they are likely to say they go hand-in-hand.  Ask which one is the driving force behind recent service innovation and you will get an entirely different answer.

One view is that the shift from product to service focus is a result of customers demanding greater service offerings from companies.  An alternative view defends that the shift to service has sprung from technology – like smart connected products and the Internet of Things – delivering new value through integrated services.

It is evident that new technologies have allowed organizations to become innovators in both customer service offerings and aftermarket product servicing.  Thanks to connected product technologies, field service technicians are able to determine which parts are needed to fix a broken product even before examining it. As a result, customers save time and money with increased first-time fix rates.

Yet the paradigm shift question remains: have these enhanced service abilities erupted from advanced technologies or has the need for greater service capabilities prompted the creation of advanced technologies?

Professor Tim Baines of the Aston Business School in Birmingham, UK offered one very intriguing response to this question in an interview with Oxford Economics.  He says that manufacturers “are experiencing the pull and push of new services innovation in response to changing customer demands”.  To put this theory into “chicken or the egg” terms, customer demands for greater service capabilities have prompted the creation of advanced technologies.

Professor Baines mentions a few big-name manufacturing companies who have transformed to service-oriented firms prompted by the demands of their customers: Rolls-Royce by American Airlines, Alstom Train Life Services by Virgin, and MAN due to their poor customer performance reviews.  The reason he believes organizations like these and others make the shift?  Either they adapt to customer demands or their customers find other suppliers that will.

Technology is crucial for companies to adapt to these customer demands.  Service is no longer defined as simply fixing a broken machine. Professor Baines says that “manufacturers can’t just use IoT or smart connected products to monitor equipment and avoid their own liability; they have to use the information for product innovation and create higher value for their customers.”

So whether this era is called the Age of the Customer or the Age of Technology, leading organizations in any industry still abide by one basic rule – the customer always comes first.  Customer demands make service innovation necessary; technology innovation simply makes it easier to follow this rule.

Read the full Oxford Economics interview with Professor Tim Baines to learn more about the strategic and economic impacts of global service transformation.


If you are interested in service trends, best practices and technology solutions from PTC and our partners, you should attend PTC Live Global featuring the Service Exchange, June 7-10, in Nashville, Tennessee.

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