Managing service lifecycles

Gone are the days when manufacturers could choose whether or not to provide services to accompany their products; nowadays, if they want to ensure their survival in the marketplace, they must.

Service lifecycle management programs help companies seeking to add service components to their products to systematically and successfully develop suitable business models for doing so. Fraunhofer IAO’s “Anforderungen an ein Service Lifecycle Management” study investigates the extent to which companies are already using such programs.

Offering services to accompany the products they sell is already an important consideration for manufacturing companies. Well-known examples include furniture that is assembled at the customer’s home, printers for which the customer receives ink cartridges by regular postal delivery, or conventional cell phones that are sold inclusive of a contract with a cell phone operator.

This trend is set to intensify in future. If companies wish to remain competitive, they must master servitization – the process of transforming pure products into bundles of products and services. Doing so requires strategic business models that treat both services and products as important from the outset.

How does one go about systematically creating this new kind of business model? Service lifecycle management provides an effective solution. It’s very similar to product lifecycle management, and comprises three stages: service ideation (brainstorming, structured evaluation and selection), service engineering (developing the chosen idea through to market launch), and service operations management (marketing, sales, quality assurance). In order to discover the extent to which manufacturing companies are already using lifecycle management programs to professionally manage the services they offer, Fraunhofer IAO questioned 14 experts working in the field as part of its “Anforderungen an ein Service Lifecycle Management” study.

According to the specialists surveyed, manufacturing companies’ services business is becoming ever more important. Their feedback indicated that the first major step is to offer each customer services tailored to their specific needs. This then allows companies to offer their customers hybrid bundles of products and services, creating a unique selling point. The third indispensable factor is highly qualified staff, which the experts deem essential for delivering services in the marketplace. It is precisely these three strategic aspects that must be borne in mind when developing a service lifecycle management program.

The short study shows that the majority of companies surveyed do not yet have a comprehensive service lifecycle management program in place. The main reason cited was insufficient capacity, with underqualified staff also named as an important factor. The companies surveyed would above all like to have systematic, practical support when it comes to selecting and developing ideas for suitable services.

Contact:
Mike Freitag
New Service Development
Fraunhofer IAO
Nobelstraße 12
70569 Stuttgart, Germany
Phone +49 711 970-5105
E-Mail: mike.freitag@iao.fraunhofer.de
Weitere Informationen:
http://www.iao.fraunhofer.de/lang-en/business-areas/service-and-human-resources-management/1072-managing-service-lifecycles.html

http://wiki.iao.fraunhofer.de/index.php/Service_Lifecycle_Management

http://www.verlag.fraunhofer.de – To order a copy of the study
(in German, 10 euros)
http://wiki.iao.fraunhofer.de/images/studien/service_lifecycle_management.pdf
– To download a free pdf (in German)