Strategic Service Management

A New Way of Thinking

Until recently, nearly all executives considered service delivered after the initial sale of a product as a low-level transactional function with little strategic value.   Company leaders typically viewed post-sale service as a necessary evil. They gave topics such as “the customer experience” and “customer loyalty” plenty of lip service, yet remained almost exclusively focused on healing the ills of their manufacturing businesses.  This is surprising given the fact that for some manufacturers, service margins can be 30% to 200% greater than product margins. 

However, the advent of Strategic Service Management is beginning to change everything. Strategic Service Management should not be mistaken for a new piece of software or industry term; it is much more than that. Strategic Service Management is a mindset, a new way of thinking that represents a fundamental shift in how companies conduct business.  It is a new commitment-centric business strategy built around a company’s understanding of the power and value associated with delivering on the commitments to customers.  This new strategy is causing companies to completely reinvestigate how their often sub-optimized service businesses manage their commitments, resources, partners and prices. It is also causing organizations to search for creative ways to harvest more profits while efficiently and effectively delivering on the service commitments they’ve made to their customers. 

Results That Speak for Themselves

The results Strategic Service Management can bring speak for themselves.  A recent  BusinessWeek article highlighted some of the quick yet significant results recognized by companies deploying Strategic Service Management solutions. For instance, Avaya reduced service parts inventory from $250 million to $160 million, Sun Microsystems saved $40 million and Dell nosing out Hewlett-Packard for the top spot in the U.S. hardware support market, growing its service business unit by more than 20%.  

Strategic Service Management can help leaders break the rules of competition in rising markets, shaping entirely new playing fields on competitive high ground. It can also shield companies caught in industry downturns from financial distress or ruin.

Strategic Service Management is not about better tactical execution or service firefighting.  If we look at companies such as Dell, Avaya, Sun, Case New Holland, and Volvo, among others, it becomes clear that Strategic Service Management can lead an overall business strategy. It can create a significant competitive differentiation that is much harder to replicate than an item sold on the product side of the business.  In fact, one could argue that in certain industries, Strategic Service Management is not just a business strategy and philosophy. It is the business strategy and philosophy that leaders practice and followers fail to understand.

The challenge of Strategic Service Management for many is that it is not about better tactical execution or service firefighting. It represents a new way of thinking, a way of taking a fully integrated approach to post-sale service.  Leading companies increasingly understand that a fully integrated approach to service can be achieved only through a strategic service management solution — one that enables the integration, optimization, and efficient management of their core service business processes. These include: service resource planning, customer commitment management, service partner management, service knowledge management and service pricing management. 

To understand how the Strategic Service Management can transform your service business and help you increase revenue, gross profits and customer service, call us at +1 888.942.8623.