Hold your horses just for a minute before digitalizing your service business!

by Taru Hakanen and Pasi Pussinen

Digitalization offers immense opportunities for making your service business bloom. It brings new channels for reaching your customers, interacting with them, and involving them in service co-creation. Whether it is a matter of the Internet of Things (IoT), the industrial internet or any digital solution, we all want to win this race. However, before rushing into purchasing a number of new gadgets, sensors and applications, take a minute and think through: where exactly you are heading with digitalization?

The five questions below guide you to find the very core of your business development aims and provide examples of the ways that digitalization can help you in achieving those:

Discovering new markets and customers?

  • Acquiring customer knowledge (e.g. CRM, marketing information systems, IoT for user data collection)
  • Analysing and interpreting customer knowledge (e.g. CRM, analytic tools)
  • Increasing the visibility of own company and services (e-marketing)

Renewing and designing attractive service portfolio?

  • Collection of new ideas from customers and other stakeholders for service innovation (e.g. co-creation platforms, social media)
  • Complementing service portfolio with new digital services and ‘smart’ products (e.g. smart IoT solutions)

Increasing sales and the efficiency of sales processes?

  • Utilizing digital sales tools and solutions (e.g. CRM, digital visualisation)
  • Exploiting digital sales and marketing channels (e.g. online shopping, social media)
  • Collecting sales leads from the customer interface (e.g. IoT technology for machine condition monitoring, mobile solutions for service personnel)

Designing cost-efficient service processes?

  • Efficient management of internal and customer resources (e.g. ERP-systems, resource management software solutions, mobile solutions)
  • Designing self-services and remote services (e.g. online training, real-time monitoring and remote problem solving with IoT)
  • Online shopping and digital distribution channels

Enhancing customer satisfaction and creating positive customer experience?

  • Real-time reporting for customers and future forecast
  • Implementing new channels of customer interaction in service co-creation (e.g. co-creation platforms)
  • Enabling multiple channels of customer feedback (e.g. social media)

All of the above business aims are undoubtedly salient in service business. But as we all know, we have to start somewhere and prioritize our decisions and actions, especially when significant development investments are involved. When you have a clear vision of the drivers for your business success, selecting adequate digital solutions also becomes easier!

Fimecc S4Fleet programme: https://www.fimecc.com/content/s4fleet

Pk-teollisuuden palveluviennin uudet mahdollisuudet

by Taru Hakanen

Suomen valmistava teollisuus vastaa tavaraviennin lisäksi myös suurimmasta osasta palveluvientiä: yritykset tarjoavat muun muassa investointihyödykkeisiin liittyviä huolto- ja kunnossapitopalveluja ja teknistä tukea maailmanlaajuisesti Koneen ja monen muun ison yrityksen tapaan. Kun tavaraviennin arvo on ollut viime vuosina n. 55 miljardia, palveluviennin arvo on ollut 20 miljardin luokkaa.

Palveluviennin arvoa olisi mahdollista kasvattaa enemmänkin ottaen huomioon sen, että kansainväliset palvelumarkkinat kasvavat paljon tuotemarkkinoita nopeammin. Tässä kohtaa – isojen yritysten hienon panoksen lisäksi – katse voidaan kääntää myös mahdollisiin uusiin kasvualueisiin: pk-yritysten palveluvientiin ja digitaalisten palvelujen tuomiin mahdollisuuksiin palveluviennin kasvattajana.

Tavara- ja palveluvienti tukevat toisiaan eikä toisen kasvattaminen ole toista vastaan – päinvastoin. Panostuksia tarvitaan molemmissa, mutta uutta kasvua voisi hakea yhä voimakkaammin myös pk-yrityksistä ja palvelualoilta, joissa tarjoomassa ei ole tuotteita ollenkaan. Näitä palveluja voisi lisäksi kehittää ja skaalata erilaisilla digitaalisilla ratkaisuilla.

Suomessa on valtavasti pk-yrityksiä, jotka ovat jo mukana palveluviennissä ja joilla olisi potentiaalia kasvattaa sitä merkittävästi. Tällaisia aloja ovat esimerkiksi konepajateollisuus, IT, suunnitteluala ja konsultointi. Yritysten on mahdollista uudistaa tuotetarjoomaa radikaalistikin täydentämällä sitä palveluilla tai jopa rakentamalla tarjooma palvelu edellä – ja valita vasta sitten palvelun mahdollistavat teknologiset ratkaisut.

Menestykseen kansainvälisillä markkinoilla on vielä paljon tehtävää: Tarvitaan rohkeita palvelustrategioita, syvällistä asiakasymmärrystä yritysasiakkaiden ostokäyttäytymisestä kansainvälisillä markkinoilla, uudenlaisia ansaintalogiikoita, houkuttelevaa palvelujen konseptointia sekä asiakaskeskeisten ja tehokkaiden myynti- ja palveluverkostojen luomista. Menestyksekkäimmät kv-markkinoilla toimivat yritykset osaavat mallikkaasti yhdistää asiakasläheisyyden ja tehokkaat palveluprosessit.

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IoT is first and foremost about service!

by Taru Hakanen

‘IoT’ and ‘industrial internet’ are major hype words in the current business world. IoT-solutions are already abundant in the market, but the main buzzing seems to circulate around the question: How to make money with IoT? How to build successful IoT business models?

What are services?

We argue that the most important prerequisite for building successful IoT business models is the realization that IoT and industrial internet are foremost about service!

And what services are, then? What are they about?

Services are highly context-dependent resulting in increased need for understanding customers’ business and behaviour. Services are about interaction. They are about relationships between companies and company representatives. They are about customer participation in service co-production. Services are about mutual value co-creation, in which both the suppliers and customers have their own role. They are NOT products that are ‘pushed’ to the markets through logistic chains in containers or truck trailers with a hope that a customer would purchase them.

We embrace reversing the whole mindset in business model building, aiming rather for a ‘pull’ than for ‘push’ mode in IoT business model creation. IoT is not about developing and applying IoT-solutions and ‘pushing’ them to the markets, but about customer- and service-focus. After all, IoT is primarily used for creating new kinds of services and supporting the existing ones. This notion has an outstanding impact on IoT business model generation and also on creating new service innovations!

Five keys for successful IoT business models

The message of creating successful service-oriented IoT business models (Hakanen et al., 2015) is now condensed in five key points:

  • Ensure value creation for all the service ecosystem actors: Customer value is the reason for buying any services. A service provider’s task, then, is to identify customers’ expectations for value or discover totally new value that IoT brings and build an attractive business model accordingly. However, with IoT business models – not only customer value – but also reciprocal value creation between all the service ecosystem actors is pivotal (Jaakkola & Hakanen, 2013).
  • Design cost-effective and customer-focused service processes: IoT-solutions may change the way services are co-produced with the customer. IoT enables even new service innovations in terms of remote services but also in terms of closer cooperation with the customer due to increased knowledge exchange. Suppliers need to design channels and touchpoints of interaction with the customer and make a distinction between back-office and front-office service operations. A salient issue in developing successful IoT business models is, then, to plan the role of customer in the service process and include knowledge flows of the whole service ecosystem in service process mapping.
  • Ensure positive customer experience: IoT may have both positive and negative effects on customer experience. It may decrease face-to-face interaction because of knowledge exchange via various IT-tools and platforms. On the other hand, an IoT service supplier may grab a chance of increasing customer interaction with IoT. Some companies may even start building a new IoT business model from an innovative way of interacting with the customer and managing customer relationships!
  • Design global service networks: IoT is not only about integrating technology and IT-systems and applications but also integrating organizations in service co-production. Especially in the global setting, providing services locally – remedying the customer’s problem on-site on the other side of the globe – is expensive. Then, finding partners that take responsibility of local service co-production in different markets is pivotal in order to build cost-effective business models. And although there would be several service partners operating on the customer interface, they should be able to offer a coherent customer experience for the customer (Hakanen & Jaakkola, 2012).
  • Discover the most profitable earning logic: Earning logic and the way an IoT business model creates revenue for the suppliers are at the very core of a successful business model. The financial income largely relates to benefits that can be accrued for the customer. As IoT-services are complex in nature with multiple actors within a service ecosystem, one way of proceeding with totally new IoT business models is sharing risks and benefits in terms of revenue, if the business model proves to be successful.

 

‘Service-oriented IoT business model canvas’ in Hakanen, Taru; Antikainen, Maria; Pussinen, Pasi & Muikku, Matti (2015). Boosting service export – a roadmap for IoT enabled business models. To be published in The ISPIM Innovation Summit, Brisbane, Australia on 6-9 December 2015.

Jaakkola, Elina & Hakanen, Taru (2013). Value co-creation in solution networks. Industrial Marketing Management, Vol. 42, No. 1, pp. 47–58.

Hakanen, Taru & Jaakkola, Elina (2012). Co-creating customer-focused solutions within business networks: A service perspective. Journal of Service Management, Vol. 23, No. 4, pp. 593–611.