Every business is fundamentally an anthology of processes - a few strategic, a few tactical, but all necessary. And today's processes are gradually more complex, full of deeper interactions across systems and dependent on more collaborative activities between users. Service-Oriented Architecture (SOA) assures to escort in a new era of business agility. But that agility depends as much on supporting new efficiencies for people as it does on liberating access to systems and services.

After the excitement, a return to fundamentals: the qualities of conventional business virtues, among them customer service, are being experienced again. Organisations are becoming conscious that, in order to compete fruitfully, they must transform themselves from being product-focused organizations to service driven ones. Brilliant customer service can now be a key competitive advantage. However, the change from a product business to a service business will not be easy.

The last few decades of the twentieth century witnessed a dramatic increase in the number of books published on management; the letters that were being prefixed to the word ‘business’ too increased, seemingly almost in direct proportion to the number of books being published. First there was e-business, and then there was m-business - both terms which soon entered common usage, though now somewhat diminished in respectability and credibility after the dotcom and telecom busts. But the fad continues: management writers seeking to launch the next big idea, still search for more prefixes. With all this, one hesitates to mention s-business – business with yet another prefix. However, the term seems to be an idea whose time has come. In the post dotcom world, it appears that all businesses do not have to become m-businesses, or even e-businesses, to survive. The virtues of conventional, dull old business principles have been rediscovered by at least some management pundits.

The term s-business (‘s’ in stands for service) is now an indication of the increasing emphasis that customers are now placing on service. 

From Products to Service 

In many economies around the globe, we have seen a shift from manufacturing to services; services now constitute a large share of the GDPs of many provinces. So it seems with businesses too, many of which seem to be shifting their prominences from products to services. Indeed, at least for some firms, their tangible products seem to have become virtual loss leaders, helping them sell services where they craft a fine part of their profits. 

The transformation of the product businesses of yesteryears, into the service businesses of today is taking place due to a number of factors: 

In today’s bloodthirsty marketplace, maturity in technology have made it difficult for many companies to differentiate their products solely on the basis of quality or additional product features. For most products, high quality is now the norm, so much so that it is no longer a sufficient condition for competitive success, but merely a necessary condition. Adding new bells and whistles to existing, mature products seems to be an exercise which yields steadily diminishing returns on investments.

In such circumstances, firms must differentiate their products and persuade customers based on the quality and charisma of the service they provide. Today’s products are much more complicated and sophisticated from a technological point of view, than the products of a few decades ago. This increasing technological sophistication has not resulted in a commensurate level of user-friendliness. To take an old and oft-quoted example of technological complexity combined with a distinct lack of user-friendliness - consider VCRs. Or consider personal computers. According to some writers, computers, as they are supplied to customers today, are assemblies, not finished products. The fact is that the average customer is finding it increasingly difficult to cope with the complexity of installing and trouble shooting many of today’s technologically challenging gadgets. This is yet another reason for the growing importance of service, both to customers and to the companies that manufacture and market sophisticated products.
The service business could be lucrative as well. Competition has had an impact on margins in the products business. Services constitute an increasingly significant part of many companies’ revenues and profits. Service revenues also have the added advantage of providing fairly predictable and even cash flows, when customers are locked into multi-year maintenance agreements. Add to all this the usual suspects in current business writing: the Internet, more discerning and demanding customers, greater access to product information, and so on. Little wonder then, that service is assuming a level of importance which would have been inconceivable even twenty years back. 

Every business now needs to think of itself as a service business. However, this is easier said than done. How does one go about transforming a traditional product focused business into a service driven business, or ensuring that the organization retains a service edge over the competition? To do this, one must start with a clearly defined service quality strategy.

Service is defined by two factors:- 

• Performance of the service or product
• Perceptions of the service or product

Both these must be properly managed by the firm. To do this, according to some writers, it is useful to treat services like tangible products – which makes them more concrete, and consequently, more amenable to measurement and monitoring. Starting from this, the organization must define the service quality it aims to deliver, and formulate and implement appropriate strategies to attain this end. Perceptions are as important as performance.

In the face of increasing competition, there is a tendency among sales people to over promise - to promise features, functionalities, or levels of service that they know that their product or their company will not be able to deliver, in order to shut out the competition and close the sale. This is often a critical, costly error. A disappointed customer is often a lost customer. By raising expectations to close one sale, the sales person has put in jeopardy many potential future sales. More than strategies and systems, people are of critical importance in service.

They make all the difference in the customer experience. All of us have our own personal horror stories of poor service: the rude serviceman, the indifferent desk clerk, the inefficient repairman, in almost all these cases, the starring roles are played by service employees.

To ensure that the firm has good staff, all aspects of the human resources function require considerable thought and attention – including hiring, compensation, performance management and training. Front-line people in the organization, who are likely to have the most contact with customers, must also be suitably empowered, so that they can provide timely and relevant service.

The Internet has changed the service aspects of business as much as it has changed other aspects. From e-mail to expert systems and customer accessible databases, the applications which use the Internet to improve the customer experience are innumerable. An organization which wants to focus on customer service will make use of all the technological tools available, to attain its objectives. A few words of caution though: Technology in itself is never enough to provide good, or even adequate levels of customer service. In almost all service interactions, customers look for the human touch.

If globalization and standardization appear to be threats to many firms, in equal measure, they provide opportunities to others. Service is a knowledge and people intensive process. Globalization has shaken up manufacturing in high wage countries, with most of the activities associated with it moving to low wage, low cost countries. It is now the turn of service to move to locations which provide cost and other advantages. This provides great opportunities for growth and expansion to companies in many developing countries, especially the ones with good quality, educated manpower. The current debates on businesses outsourcing many of their non-core process to firms in developing countries such as India are just harbingers of greater changes to come.     

How easy (or difficult) is it going to be, to transform a traditional business into a service business?

 In fact, the question is probably irrelevant in many cases. For most product organizations, if they do not start thinking and behaving as service organizations, it is unlikely that they will be still around a few years from now. At least, as customers, let us hope this will be the case.