If there is one constant in business, it’s that business is always changing and, in the new millennium, it’s changing faster than at any other time in history. And with that change has come major shifts in how we consume goods and services. It’s a new world where as-a-service models have revolutionized industries—and, in some ways, decimated others—all in the name of progress.
Of course, the minute anyone mentions “as-a-service,” the first suspect is usually software. The days of buying discs or downloading software seem to be a thing of the distant past. Now, everything from accounting to design to process management, and more, is a product of the cloud—my own company included.
After all, having the ability to pay a single monthly price—regardless of the software—has its benefits. Fixed line items make CFOs happy. And, as providers of hosted software solutions receive feedback from customers, they turn that feedback into new features and functions as part of their ongoing service, immediately available to all subscribers.
In fact, software-as-a-service is now something that is simply expected—a result of a remarkably fast market adoption that has transformed an industry and made it commonplace. However, far beyond the software revolution, came the revolution of hardware-as-a-service. Companies that once offered servers, laptops, switches, and the rest of the never-ending list of hardware began offering subscription-type models to their customers, a lease-like scenario that is also more commonplace. Again, marrying fixed budget line items with everlasting service and support contracts made it easier and more palatable for companies to accept the inevitable shift.
Our world is about to change. Are you ready?
So, where does that bring us to today? Now, it seems that everything is becoming a product-as-a-service, creating a world in which people can use a product for a short time, as needed, and then simply move on when they are done with it.
For instance, think of the service VRTUCAR. Created to disrupt the automotive industry, the company has made massive inroads into the condo-based lifestyle. For many, the idea of owning a car in a major metropolitan center seems silly (and it is). Therefore, why not just acquire a car when you need one, by the hour?
Then, there is one of my personal favorites: Dollar Shave Club. Though I don’t personally use the product, the commercials still make me laugh every time. And, all marketing prowess aside, their model is the exact thing that people crave: subscription-based products delivered as-a-service to make life easier.
This change is being driven by the customer and seems to be the driving force behind so many different companies. A perfect example is a recent Renewity customer who manufacturers incredibly high-end hair dryers catering to high-end salons. Gone are the days of stylists buying their own tools, or even using tools supplied by the salon. Now, these items are supplied cyclically. This ensures that when older models need servicing, the salon is immediately supplied with newer models or the latest upgrades as they are introduced—all for a monthly subscription fee.
With products-as-a-service now being the next major business paradigm shift, there is a warning to manufacturers that must be heeded: For so many manufacturers, service and service teams have always been pushed to the background, a result of having a business model based on the product-centric, sell/purchase approach: build the product, sell it, get all the money up front, hope the customer never calls with any service issues or complaints, rinse and repeat. This paradigm places service as an afterthought, a necessary evil, and makes the service team a low priority. The new emerging model is build the product, supply it to the customer, and service it throughout the lifetime of the product, and get paid over that lifetime via low, known monthly subscriber fees. This new service-centric, customer-centric model puts after-sales service front and center and ensures the service team is finally recognized by the C-suite as a high priority. Like Cinderella, it’s time for the service team to come to the ball.
If manufacturers are to remain relevant, service and service teams must be repositioned front and center in the organization to build and maintain a new service infrastructure that can uphold the new paradigm, one that is set to massively disrupt manufacturing.
If products are to be delivered as-a-service, and those products require after-sales service throughout their lifetime, the necessary management tools and software will need to be put in place immediately. The complexity of such a business model shift will require far more than basic Excel spreadsheets or some homegrown system not long for this world, and it will require new thinking by the C-suite who will need to step up their collective games and make their service teams and related departments run like never before. And if they can’t? Well, they will be disrupted and replaced by those who do.
Simply put, with customer expectations at an all-time high—both in terms of the delivery model and expected service levels—the path is clear: When everything becomes a service, service becomes everything.