Smart Services

In Industry 4.0 or IoT, the digital and physical world are becoming increasingly interconnected. Data and service-based performance present service providers with new challenges.

The goal is smart services. They offer far-reaching possibilities and opportunities, from innovative ways of customer retention to new business models. All the science fiction terminology from the new smart service world may even seem somewhat confusing. Digitally networked services of Industry 4.0 range between the poles of full artificial service reality and augmented service reality.

However, keep your feet on the ground: What may sound like the sci-fi blockbuster ‘Blade Runner’ simply describes services which are provided either completely by digital systems by machine-to-machine communication or by human-machine interaction, as is the case with mobile applications, online portals or, for example, shared services – the Smart Services.

Suitable Offers

For You at a Glance

Optimized Service Offers

Smart services allow service providers to optimize their services employing digital support. Services can be provided more specifically to target groups, faster and with better quality. This allows service technicians to log into their customer's laptop and solve technical problems remotely. Producers of technical equipment keep in contact with the customer throughout the life of the product and offer additional services such as preventive maintenance. Smart watches count mileage, measure the pulse and blood pressure of their wearer. They are part of the smart wearables product range and evaluate fitness data.

“IFA 2016 has shown how smart services have already conquered the private sector,” says ISS founder Michael René Weber.

Smart Fridges and Smart Grids

Some of the smart service solutions are still in their infancy. Smart refrigerators warn consumers when the best before date of stored products expires, they suggest dishes based on the available food and generate shopping lists. These fridges still do require a lot of support from their owners: they need ‘data feed’ – all purchased products must be entered via touchscreen. But even this will only be a momentary issue – QR codes solve many such issues. Another innovation is considered a great hope of the energy turnaround. So-called smart grids connect electricity customers and providers more closely. Intelligent electricity meters record the individual consumption of households and compare the data to the current power supply. On the one hand, this helps saving costs, and on the other hand it promotes renewable energies.

Additional Skills

No question, the ever new digital possibilities reflect in new offers for customers. As a result, ‘disrupted business models’ are one side of the coin. For example, consider the manufacturers of telephones. How often do you need your landline phone? The other side of the coin are new business models.

But what does this mean for service product management, service marketing, service sales and sales staff, and especially operations? Is your conventional know-how becoming obsolete?

Not at all, but additional IT related qualifications are needed. It's all about understanding the possibilities and benefits of IT-based solutions. Data driven business models are one thing and solutions created in collaboration with the customer are another. Here again, the Internet plays an important role as an enabler. It allows transformation processes that use new tools and techniques, and employees should be ‘picked up’ accordingly.

And ultimately: what can be done does not matter – it is the customer who defines which solutions make sense.

Dr. Holger Schmidt at the ISS TrendWorkshop Service 2015

Opportunity or Competition?

Presently, most German companies have taken the first step into the digital world. They already use online platforms, connect their processes and products, or at least seriously intend to do so. The second step, namely becoming a smart services provider, is often harder, as the Chamber of Commerce barometer 2016 notes. However, 67 percent of smart service companies predominantly see opportunities and ‘only’ 43 percent see additional competition in digitization.

Apparently companies are not convinced. After all, “digital change can only go top-down,” network economist Holger Schmidt told the magazine Focus at the ISS TrendWorkshop Service 2015. If management does not burn for the trend, it will not be implemented in the company.

Germany as a Leader in Digital Solutions

The importance to develop smart services for Germany becomes clear from the implementation recommendations handed over by the ‘Smart Service World Working Group’ at the CeBIT 2016 to the Minister of Economic Affairs and Environment, Sigmar Gabriel. Traditional German service providers and producers run the risk of being degraded to mere suppliers when international Internet service providers conquer more and more industries with smart services. The goal must therefore be ‘digital leadership’ for smart services made in Germany.