20 Core Competencies for As-A-Service Transformation
The Service Design Group has driven servitization, digital and as-a-service transformations for mid-market and enterprise B2B’s since 2011. Over the years, we’ve seen what it takes to truly drive a successful result as well as some common, repeating pain points and hurdles.
A set of vital core competencies will make or break your servitization or as-a-service transformation.
We firmly believe that servitization is no agile sprint. Instead, it’s a journey. There’s a path towards servitization that all firms should be considering, particularly in today’s service-oriented, data rich, customer centric, data fueled world. The path goes from getting started, to building services, to hitting your stride, to scaling your servitization program.
Throughout that journey, a set of vital core competencies will make or break your success along the way. Take careful stock of these, see where you are solid and note where you have deficiencies. Actively leverage your strengths and proactively address any gaps as you embark on your servitization and as-a-service transformation journey.
Here’s our list of the vital core competencies for a mid-market or enterprise B2B servitization journey! More detailed coverage of each core competency will come in a four part article series covering topics in a 101, 102, 103 and 104 format.
Competencies to Get Started
If your goal is servitization, you need to explore various pricing models, go-to-market schemes, channel activations, disruptions, and other considerations.
Ideation – if you can’t generate new service ideas and opportunities, you can’t transform. It’s that simple. Make sure you have a strong service ideation game ready to roll!
Co-creation – servitization requires developing ideas directly with your customers. Doing innovation in a vacuum will not work. If you can’t drive customer co-creation at the moment, get a plan in place to do so!
Service Design – if you’re going to have a successful service transformation, you’d better have well designed services. If you don’t know what “service design” means, you’re off to a bad start. Get smart on service design and make sure you’re doing full featured design across the full stack of services.
Business Model Design – similarly, if your goal is servitization, you need to explore various pricing models, go-to-market schemes, channel activations and disruptions, and other important considerations (operating models, financing, etc.). Filling out a canvas won’t get you there. Make sure you have access to full-fledged business model design to support your servitization journey.
Rapid Prototyping – you’ll need to create and test what you design for services and business models. Prototyping services is a leap from traditional product prototyping, so make sure you have a solution in hand for service prototyping.
Competencies to Build a Service
Your servitization journey won’t move forward without effective cross-functional alignment.
Agile Program Management – your servitization journey won’t move forward without effective cross-functional organization and alignment. You need more than just agile development, so make sure you’ve accounted for agile program management!
Living Labs – service innovation requires you to take your early stage service and business model designs straight to your customers. If you don’t have an option to do “living labs” with your customers, your path will be challenged.
Data and Data Scientists – most service innovations will come with a data story. Make sure you’re not just “talking about” big data and that you have actual access to data and in-house capabilities to do something with the data. Otherwise, you might be busted!
Systems Engineering and Integration – compelling services and solutions will often seamlessly blend hardware, software, mechanical, process and network components. Don’t underestimate this! If you don’t have systems engineering skills, consider getting some!
Storytelling – servitization and as-a-service transformation is hard work and stakeholders will often lose sight of where things are headed. Make sure you have a plan for periodically packaging up the story in a highly polished and professional manner so that the value of the work-to-date is felt and understood across your organization.
Competencies to Hit Your Stride
Make sure you have feedback loops activated to support your servitization journey.
Pipeline Management – true servitization and as-a-service transformation will require a never ending stream of innovative service and solution ideas and concepts. Make sure you have a pipeline management system in place to drive, manage and organize this flow.
Portfolio Science – similarly, a healthy servitization and as-a-service transformation means that you build and maintain a well-balanced portfolio of options. Product portfolio management won’t work for you here. Make sure you have a handle on how to approach service portfolio management.
Service Managers – there’s a reason product management is a well established and respected profession. Product managers are responsible for driving the commercial success of products. It’s pure logic that you will need service managers to succeed with servitization!
Delivery Pods – as you progress in your servitization journey, you will need repeat ability and capacity to deliver your services. Make sure there’s a plan in place to allocate resources and get the job done.
Feedback Loops – by definition, services put you in the outcomes and continuous enhancement game. You’ll need more than just a Net Promoter Score (NPS) survey. Make sure you have feedback loops activated to support your servitization journey.
Competencies to Scale
You need all aspects of your firm to actively contribute to the servitization mission.
Service Orientation – to really succeed, you’ll need all aspects of your firm, across all functions, to embrace and actively contribute to the servitization mission. Make sure you’re getting that alignment in place as you move forward.
Continuous Enhancement – we’re not talking about continuous improvement, although that’s important. Make sure you know the difference and have a plan in place.
Solution Selling – your servitization and as-a-service transformation won’t work if you can’t sell it or fail to incentivize your sales force to sell it. Get your sales house in order before it’s too late.
Customer Success Management – this isn’t customer service. If you don’t understand the difference, your servitization vision is at risk. Make sure you fully appreciate the importance of this function (and, perhaps, realize that you may not currently have this function in your organization, today)!
Measurement, Tracking and Embedded Analytics – in the end, the phrase “you can’t manage what you can’t measure” comes to mind. Avoid the mistake of not being able to demonstrate the value of services at the end of your journey and solve for measurement from day one.
That’s our list of the 20 core competencies needed for as-a-service transformation. Stay tuned for the deep dive 101, 102, 103 and 104 articles that will unpack each competency set in more detail.