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Steinbeis student analyzes service organization development

Customer focus and service orientation have evolved into a core competitive advantage. Daniel Delank, a Steinbeis  University Berlin alumnus, looked closely at this topic as part of his Master of Science degree. On behalf of  his project sponsor – T-Systems International in Saarbrücken – he identified significant factors influencing companies’  ability to achieve global competitive advantage. 

According to a study published in Academy  Management Review in 2009, services  are more important in strategic terms than  pure product business. Furthermore, the  gap between the functional attributes of  business-to-business products and technological  aspects is diminishing. As a result, in  many sectors of industry – especially B2B  markets – competition is cut-throat. For several  years, producers of tangible goods have  been focusing on the delivery of supplementary  services, frequently involving complex  customer solutions. Previously, they simply  developed and marketed products – then  waited to see what happened. 

This points to an increasing tendency for  customers to seek solutions to their business  “pains” and not just the product itself. The traditional  marketing strategy maintained by  goods manufacturers – typically revolving  around the product – must shift away from  the product itself as the primary item in the  exchange of goods. There are already examples  of “hidden champions” like IBM and UPS  undergoing a transformation into solution  providers and achieving significant growth  – with corresponding financial rewards – by  delivering end-to-end customer solutions. 

Similar trends are being witnessed in German  B2B markets. Companies are offering  integrated service packages – a combination  of tangible goods and services aimed at  solving specific customer pains – and, thus,  making it difficult to compare (conventional)  services. This shift in focus toward customer-  specific solutions also marks a paradigm shift among producers of tangible goods  (who primarily focus on the product), as well  as their servicing and maintenance units. 

Although customer interest is rising continuously,  when it comes to adapting their  service policies most product-based service  providers are still dragging their feet, all the  more so when it comes to re-engineering  their business processes. As far as the executive  managers of customer services are  concerned, terms like “service” and “customer  services” primarily relate to sales instruments  for differentiating themselves from  the competition. 

Many managers are now considering what  prerequisites need fulfilling in this area and  asking themselves if there are catch-all ways  to tackle the problem, or if indeed things can  be learned from different areas. They know  it’s time to do justice to the paradigm shift,  but how? What can we learn from business  theory? To address these issues, Daniel  Delank joined forces with Prof. Dr. Karsten  Hadwich and Walter Duschek to found the  “Service Circle,” a network that looks primarily  at the key issues of service management.  Meetings are held regularly to discuss key  topics and shed light on these topics, primarily  with case studies. Even during his  studies, Daniel Delank was able to apply  what he learned to his place of work. The  Service Circle’s members come from science,  politics and, to a large extent, business. 

One thing the group has learned is that it  makes sense to transform product-focused  service organizations step by step, gradu ally restructuring the business while at the  same time expanding the portfolio of services.  This means service units must have a  solid command of service delivery (Phase 1).  After this more value-added services can be  offered to answer customer demands (Phase  2). Then it is essential to dovetail processes  with the customer organization in Phase 3,  by which time services must be matched to  customer requirements and reengineered/  modified such that service providers can  take responsibility for entire business processes  and even client systems. One example:  outsourcing. With such services, in the  form of service packages, the benefits should  exceed the value of the sum of each individual service. 

Changes in company cultural take time,  as Daniel Delank has discovered, not just  through his studies. But now he’s more convinced  than ever that the continuous and  sustainable development of skills and business  competences are crucial to every business. 

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