Digital Service Management

• Digitalization is driving business models to focus more on digital services, while the importance of physical products is significantly decreasing. Digital services serve three strategic purposes: Scale, scope, and learning.
• Today, digital services are often developed around a single physical product, and this often results in a variety of separate applications without a superordinate digital service strategy and common infrastructure.
• The key success factors in digital service management are flexible provisioning, the linking of IT structures on internal, cross-functional and cross-divisional platforms, rapid service development and scalability, unlimited service connectivity and interoperability, and code modularity.
• Successful and future-oriented digital service management consists of six building blocks, including the organization, governance structures and principles, resources, a consistent data model, clearly defined interfaces, and a digital service architecture as an adaptable and flexible pattern of the services offered.

Digitization means upheaval and departure at the same time. Companies must incorporate the rapid changes in an increasingly interconnected society into their business models and strategies. The study on digital service management shows what challenges companies face, how they can successfully master them, and why the development of digital services must become a strategic focus for companies.

Rapid growth of digital services

The transformation from a provider of traditional products to a provider of digital services represents a major challenge for many companies. B2B companies in particular are affected, as their portfolio is increasingly evolving from a pure product offering to digital services as a result of digitization. Currently, there is rapid growth in digital services, accelerated by a continued customer and service focus and the rise of sensor technology combined with artificial intelligence. The difficulty: There is a multitude of individual and detached services without a common infrastructure.

Shared infrastructure of digital services as a must have

This ongoing transformation of product-oriented companies into service-driven digital companies is hardly possible within existing structures. Accordingly, it is simply no longer sufficient to adapt existing service offerings individually for the digital world. Instead of a multitude of singular offerings that are not linked to one another, companies must instead link their entire service offering, standardize it and make it available on the basis of a uniform infrastructure.

Internet of Things, artificial intelligence, and 5G play a key role

Three technologies – the Internet of Things (IoT), artificial intelligence (AI) and 5G – play a key role in the further development of digital services. IoT generates data from physical objects and interconnects them, and with the help of machine learning, AI can ultimately process the generated data and make decisions based on it. The 5G mobile communications standard connects the IoT devices and provides the infrastructure for exchanging large volumes of data. It is precisely in the combination of the three technologies that the great potential lies for companies to develop new digital services for their customers.

Customers demand holistic digital service solutions

Two main dimensions of digital services can be distinguished. On the one hand, the focus for providers is on innovation; on the other hand, the focus for customers is on the aspects of time and cost reduction as well as convenience. In the digital age, the customer relationship is changing radically. Today’s customers expect companies to be digitally responsive at all times and to offer integrated and holistic solutions to their problems.

Rethinking and setting up digital service management

The key success factors for digital service management are flexible provisioning, linking IT structures on cross-functional and cross-departmental platforms, rapid service development and scalability, and unlimited connectivity and interoperability. Thus, 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.