The publication series Digital & Strategy by BearingPoint and the IIHD Institute highlights current and strategically relevant topics with a focus on digitisation. It questions existing ways of thinking, provides new impulses and shows possible solutions in a new, data-driven and more complex world.

The second issue of the Digital & Strategy series discusses the ongoing transition of digital services in traditional business models. The paper highlights the critical success factors for creating and managing digital services to generate real value-added for customers. Instead of offering a variety of single and detached applications without a common infrastructure, companies should provide a coherent range of services based on a consistent service model and a shared infrastructure. The paper presents six building blocks to establish successful digital service management.

From products to services

Changing business models and the growing importance of digital goods and services pose a major challenge for many industries. The B2B sector and manufacturing companies are particularly affected, as digitization is increasingly transforming their portfolio from a pure product range to digital services. At present, a rapid growth of digital services can be observed, which have the potential to develop new stable revenue streams. The difficulty is in most companies, digital services are mostly developed in relation to one single product. Thus, they are neither based on a superordinate service strategy nor built on a shared infrastructure.

Marcel Tietjen, BearingPoint Partner

The transformation from product-oriented companies to service-driven digital companies is hardly possible within existing structures. It is therefore simply no longer sufficient to adapt existing service offers individually for the digital world. Instead of a multitude of singular offers that are not linked to each other, companies must instead link and standardize their entire range of services and make them available on the basis of a uniform infrastructure.

Marcel Tietjen, BearingPoint Partner

Key technologies

In this ongoing transformation, new technologies become an essential accelerator in developing innovative breakthrough services and identifying new areas of application for already existing digital services. In particular, three technologies play a key role in the advancement of digital services:

  • 5G - 5G will be the fuel that runs a new wave of business models relying on the fast creation and provision of digital services to customers
  • Internet of Things (IoT) - IoT revolutionizes the way data is gathered through sensors that are built into the respective physical objects. Modern low-cost sensors allow for the continuous monitoring of every physical condition. All those factors make the gathering of detailed and up-to-date data affordable for additional business cases. In this way, more precise and accurate decisions may be taken. Artificial intelligence
  • Artificial Intelligence - AI and related methodological and technological advancements revolutionize the way exponentially increasing masses of data are gathered, processed and analyzed. Big Data technologies support the handling and processing of all data types.

Holistic digital service solutions

In our publication we distinguish between two main dimensions of digital services: On the one hand, the focus of the providers is on innovation, and on the other hand, the customers are interested in convenience as well as time and cost reduction. In the digital age, customer relations are changing radically. Today's customers demand that companies are always digitally accessible and offer integrated and holistic solutions to their problems.

 

In our view, digital service management must immediately become a strategic priority for companies if they do not want to lose their position to more innovative and faster acting competitors.

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