In a recent report on next-generation services, I give several examples of how tech services firms are reinventing their operating models and value propositions to provide a new path to digital transformation to their clients. Interestingly, many such initiatives are coming either from very large service providers like Accenture or from small specialists like VMob, Bluefin Solutions, or Point of Origin. Small service providers’ next-gen service value proposition is starting to catch the interest of large clients too. A few weeks ago, VMob announced a major deal with McDonald’s in Japan wherein the company will leverage the VMob solution for its 3,200 restaurants in Japan.
The next-generation services report highlights the key tenets of these new digital transformation offerings. In this customer-controlled, digital world, successful tech services companies will bridge the gap between technology and business outcomes for their clients. In other words, it is not just about implementing a new technology solution anymore. It is about helping clients harvest the power of digital technologies and achieve specific business outcomes like growing revenues, reducing operating costs, or mitigating risks. This is where next-generation service providers like VMob, Bluefin, and Point of Origin get it. As leaders in the new services world, their approach is fundamentally different from the traditional tech service providers, as they:
- Embrace risk to deliver accelerated business outcomes. Commercial customers are tired of waiting months for consulting firms to deliver recommendations and another few quarters for SIs to implement the solution. Next-gen service providers understand clients' specific business pain points and are investing upfront to solve these. They have executed research to understand how the clients can be more successful and develop prebuilt solutions leveraging modern architectures and tools like cloud, advanced analytics, and mobile platforms. As a result, they implement a business-relevant solution in weeks that is easy to use and to integrate with legacy systems.
- Walk in their customer’s customers’ shoes to transform their experience. Businesses’ top priority these days is to transform the experience of their customers. Most service providers get it wrong, though. They help the CIO apply an inside-out approach to digital transformation, focusing on extending the reach of internal systems thanks to mobile channels. Next-gen service providers leverage customer journey mapping to identify the full scope of a customer problem and design a new and simpler journey. Only by understanding the full scope of the customer journey map can they craft apps to deliver an effective, easy, and emotional experience across digital touchpoints.
- Align their success to the business success of their clients. VMob’s pricing models align with the success of the client’s marketing campaign — like a fee per mobile coupons redeemed. Account managers from Capillary Technologies are given incentives on customer satisfaction and business metrics like incremental revenue growth and conversion rates. These practices reward the delivery of incremental business value to clients, not a just a new transaction or renewal. By blending technology innovation with business processes expertise and consumer behavior proficiency, next-generation service providers can transform the way they sell, engage, and deliver business outcomes to their clients.
Business decision-makers at McDonald’s and other large organizations are already working with these next-gen service providers. As they transform their organizations and build their BT agenda, CIOs need also to go beyond their traditional service providers and start to understand how they can bring this new breed of service providers into their service catalog to help the business win, serve, and retain customers.