Service 4.0 Primer

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Framework Primer
Service 4.0 Primer
Presentation created by
Service
Provider
Operating
Model
Ambition
Governance
Organization
People
Partnership Model
1
2
3
4
5
6
7
8
9
10
IT Scope
IT Delivery
Sequencing
Rollout Plan
Cultural Change

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Contents
Overview
Operational Efficiency and Customer Satisfaction
Service 4.0 Transformation
Templates
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Presentation Overview
Up to 60% of a typical Service company’s operating costs fall within the scope of
Service 4.0—furthermore, the overall savings can reach up to 40% of these costs.
Service 4.0 allows Service companies to transform the way they offer and
deliver services—while saving costs and improving customer satisfaction
Driving by emerging Digital Technologies, Service 4.0 is occurring now. Service 4.0 allows companies to
transform the way they offer and delivery services. Customers are also demanding this change—they expect
a proactive and customized service, delivered through multiple, integrated channels.
By undergoing Service 4.0 Transformation, Service organizations can derive benefits related to:
To design a Service 4.0 Transformation program, we must make implementation decisions across the 10
dimensions of the operating model:
Service 4.0 is driven by 9 core technologies: Big Data & Analytics, Cloud Computing, Robotic Process
Automation (RPA), Bionic Computing, Cognitive Computing, Virtualization, Internet of Things (IoT), Smart
Devices, and Augmented Reality.
1 2Operational Efficiency and Cost Savings; and Improved Customer Satisfaction
1 Ambition
2 Governance
3 Organization
4 People
5 Partnership Model
6 IT Scope
7 IT Delivery
8 Sequencing
9 Rollout Plan
10 Cultural Change

First, let’s understand how Service Provision has evolved from its
beginnings at Service 1.0 to Service 4.0 today
Evolution of Service Organizations
For the latest news on technologies that enable Service 4.0, join our LinkedIn Group on the
Fourth Industrial Revolution: https://www.linkedin.com/groups/13504373.
Since its inception in the 1800s, Service Provision has evolved into 4 stages, as defined below:
SERVICE 1.0
Service provision began in the
19th century.
This is the basic level of
service provision, which is
manual and non-standardized.
E.g. traditional (manual)
bookkeeping performed by a
clerk.
SERVICE 2.0
Service 2.0 arose in the first
half of the 20th century.
At this stage, service became
standardized, industrialized,
remove, and labor intensive.
Service 2.0 was driven by the
widespread use of the postal
service and telephone and
adoption of scientific
management.
E.g. deployment of call
centers in the 1950s.
SERVICE 3.0
This stage arose in the late
20th century.
In this phase, organizations
began to automate service
provisioning to a certain
extent, integrate their value
chains, and provide the first
generation of channel-
specific, self-service options.
Service 3.0 was driven by
the adoption of personal
computers, the Internet, and
open standards.
E.g. self-service terminals at
banks, transportation
stations, and grocery stores
SERVICE 4.0
Service 4.0 is happening
now.
Now, companies are
delivering proactive and
customized service, delivered
through multiple, integrated
channels.
Service 4.0 is driven by
advances in Digital
Transformation and Fourth
Industrial Revolution
technologies in both software
and hardware.
E.g. via Big Data and
Analytics, many companies
are anticipating customer
needs and respond
proactively

Service 4.0 presents us the opportunities to greatly improve operational
efficiency (reducing costs) and customer satisfaction (increasing sales)
Service 4.0 – Opportunities and Benefits
For Service organizations, the benefits directly alleviate 2 of their big issues—low
operational efficiency and low customer satisfaction.
The technology for Service 4.0 already exists. In fact, advancements and innovations are being introduced
weekly. However, most of this technology is not being fully leveraged by Service organizations.
Service 4.0 enables service provider to address
increasing cost pressure, rapidly evolving
customer behaviors, and an unstable competitive
environment. It presents significant opportunities
on both how companies offer and deliver their
services.
The Service 4.0 technologies allow companies to
offer proactive and truly tailored services and to
deliver them seamlessly through multiple channels
across share, open infrastructures.
The net benefit is two-fold:
1 Operational Efficiency
and Cost Savings
2 Improved Customer
Satisfaction

There are 9 core technologies that enable Service 4.0—we must also make
decisions on which technologies to leverage
9 Core Technologies of Service 4.0
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There are 9 core technologies that enable Service 4.0 Transformation and promote efficiency improvements
across the Value Chain.
Source: Tapping into the Transformative Power of Service 4.0, Boston Consulting Group, 2016
BIG DATA & ANALYTICS
Develop deeper insight into
customer behavior,
preferences, and pathways
CLOUD COMPUTING
Manage huge data volume
in open systems and provide
services on demand
ROBOTIC PROCESS
AUTOMATION (RPA)
Replaces humans in work
processes that are entirely
rule based
SOCIAL MEDIA
Create customer-tailored
delivery solutions based on
analysis of social media data
COGNITIVE COMPUTING
Simulate human thought
processes and provide
intelligent, virtual
assistance
VIRTUALIZATION
Free services from reliance on
specific software and hardware
and ensure flexibility,
adaptability, and robustness
INTERNET OF THINGS (IOT)
Create an ongoing connection
in areas as varied as on-the-
spot service provision and
remote monitoring
SMART DEVICES
Develop an ecosystem of
apps and cloud services
that utilize high-
performance devices
AUGMENTED REALITY
Provide the necessary
information when needed in
areas as varied as manuals,
pricing, and alerts

Contents
Overview
Templates

ENERGY TELCO BANKING INSURANCE GOVERNMENT HEALTHCARE
Service industries are plagued by waste—Service 4.0 can address these
issues and improve operational efficiency greatly
Operational Efficiency – Sources of Waste Industry Examples
To combat this waste, Service providers should undergo a Digital Transformation
leveraging the existing technologies at their disposal.
Currently, Service industries experience a lot of waste. In fact, across these industries, the typical waste level
is 40-50% of the addressable cost base.
Overprocesing
Overproduction
Transport
Motion
Inventory
Defects and Rework
Waiting
Improper utilization of skills
SOURCES OF WASTE
Unnecessary use of expensive systems and resources (for example, unneeded system complexity)Unnecessary use of expensive systems and resources (for example, unneeded system complexity)
Excessive service and output levels, which have an insufficient link to customer valueExcessive service and output levels, which have an insufficient link to customer value
Too many unnecessary physical activities and processes (for example, multiple data entries)Too many unnecessary physical activities and processes (for example, multiple data entries)
Manual work that can be automated or eliminated (for example, data lookups or validations)Manual work that can be automated or eliminated (for example, data lookups or validations)
Large stockpiles of physical goods (for example, telco devices) or a backlog of troubleshooting ticketsLarge stockpiles of physical goods (for example, telco devices) or a backlog of troubleshooting tickets
Quality problems that hinder downstream processes or necessitate reworkQuality problems that hinder downstream processes or necessitate rework
Inefficiencies that result from waiting for resources or slow processingInefficiencies that result from waiting for resources or slow processing
Use of overqualified employees for simple tasks or under qualified employees for complex tasksUse of overqualified employees for simple tasks or under qualified employees for complex tasks

WHAT CUSTOMERS EXPERIENCEWHAT CUSTOMERS EXPECT
There is a significant divide between what customers expect and what
they are actually experiencing—leading to low customer satisfaction
Customer Satisfaction – Expectations vs. Experience
Service 4.0 bridges the gap between customer expectations and Customer Experience
and ultimately delivers an experience that exceeds expectations.
Customers are increasingly expecting better service and are frustrated by the actual service they receive from
most service providers.
VS
Simple Intuitive Proactive
Personalized Real-time
Seamless (across devices and channels)
Long wait times
Discontinuity among in-store, mobile, and online
experiences
Reactive approach to addressing service issues
The leading Digital players are able to meet—if not exceed—customers’ high expectations. They do this by
leveraging advances in Digital technologies. For instance, some companies integrate external data (e.g.
social media) and internal data (e.g. purchase history, website browsing pattern, customer location) to create
holistic customer profiles and make real-time, personalized offers. They also provide easily accessible,
interactive customer service tools to address questions and respond to complaints quickly.

Service 4.0 represents a fundamental shift in how our service is offered
and delivered—leading to substantially improved customer satisfaction
Customer Satisfaction – Shift from Service 2.0/3.0 to Service 4.0
Service 4.0 helps us meet our customers’ expectations by fundamentally transforming the way our service is
offered and delivered to them.
OFFERING
DELIVERY
Reactive
Industry-specific, separated
Standardized, modular
Experience-based
Proactive
Integrated, bundled
Customized, human-centered
Data-driven
Explicit, manual interfaces
Remote service centers
Predefined paths
Heterogeneous, separated systems
Implicit, virtual interfaces
Seamless, omnichannel
Dynamic, real-time paths
Shared, open infrastructures
SERVICE 2.0/3.0 SERVICE 4.0

Here are 2 specific examples of how the shift in offering and delivery
capabilities positively impacts customers
Customer Satisfaction – Shift from Service 2.0/3.0 to Service 4.0 Examples
Let’s take a deeper dive into 2 examples that demonstrate the transformation to Service 4.0.
Reactive to Proactive
To target individuals for a marketing campaign, we can analyze
public social media data to identify people who have expressed
complaints about our competitors’ service quality.
We can apply cognitive computing to customer interactions to
identify existing customers who are likely to complain or leave us.
To improve satisfaction and reduce call center volumes, we can
use remote monitoring, enabled by data mining and analysis
gathered via remote sensors, to detect issues (e.g.
device/hardware failures) and then notify the customer
preemptively
Remote Service Centers to Seamless, Omnichannel Experience
By integrating all customer touch points (across different devices
and channels) on a single technology platform, we can enable
customers to begin a service interaction in one channel and then
switch to an alternate channel without having to start the process
over.
If our customers have end-to-end access to sales and service
interactions, then they are much more likely to use these
channels. This will both lower our costs and improve customer
satisfaction significantly

Contents
Overview
Templates

Implementing Service 4.0 Transformation is difficult—it requires making
strategic decisions across a multitude of implementation options
Service 4.0 Transformation – Considerations and Approach
A major bottle neck to achieving a complex Service 4.0 Transformation is legacy IT
systems—we should adopt an Agile approach when overhauling IT.
Implementing Service 4.0 Transformation is not an easy task.
As an initial step, we
need to decide on the
ambitiousness of our
Service 4.0
Transformation program.
Our options lay on a
continuum of options
from achieving rapid,
incremental changes to
developing radical,
disruptive solutions.
Next, we need to make
decisions related to
governance and
organization. To foster
both agility and speed into
our program, we should
experiment with new
forms of organization that
rely on cross-functional
teams and autonomy.
It is important to also add
Service 4.0 to the C-suite
agenda.
To succeed in the long run,
we also need to expand our
talent pool to acquire
capabilities in new Digial
technologies. These include,
but are not limited to Big
Data, Analytics, Cloud, Social,
Mobile, and RPA.
Likewise, we also need to
develop new partners, as well
as a new open partnership
model, which encourages
flexible collaboration among
organizations from different
industries.

In our Service 4.0 Transformation design, there 10 dimensions we must
carefully evaluate
10 Dimensions of Service 4.0 Transformation
Collectively, the decisions made on these 10 dimensions will dictate our path to
transformation.
As with any transformation, we must address each of the major elements of a service provider’s operating
model—across the organization, people, and technology. Across these elements, we must make decisions
across 10 dimensions.
Service
Provider
Operating
Model
Ambition
Governance
Organization
People
Partnership Model
1
2
3
4
5
6
7
8
9
10
IT Scope
IT Delivery
Sequencing
Rollout Plan
Cultural Change

Each dimension lays on a continuum of options—for each,
we must make a decision on level implementation
10 Dimensions of Service 4.0 Transformation – Implementation Decisions
We must also decide on the optimal sequence of transformation initiatives—remember,
there is no one-size-fits-all solution for all organizations.
CRITICAL DIMENSION
HIGH-LEVEL SELECTIONS
Governance
Organization
People
Partnership Model
IT Scope
IT Delivery
Sequencing
Rollout Plan
Cultural Change
End-to-end process view
Traditional (for example,
divisional or matrix)
Retrain current workforce
Closed system, few partners
Big-bang solutions, replacement
of legacy systems
Traditional waterfall, releases
Customer-facing processes first
One-by-one, quick wins first
Address feelings and values
Rapid incremental changes Radical, game-changing solutions
Functional view and steering
Disruptive (for example, squad)
Attract and hire new talent
Open system, try before buying
or building
Fewer features sooner
Continuous delivery, two-speed IT
Enabling processes first
All initiatives and organizational
units simultaneously
Change the context (for example,
goals, resources, and constraints)
that drives behaviors
2 3 4 5 6 7 8 91 10
Hypothetical promising path
Ambition1
2
3
4
5
6
7
8
9
10

Contents
Overview
Templates

SERVICE 1.0
SERVICE 2.0
SERVICE 3.0
SERVICE 4.0
Insert headline
Service 1.0 to 4.0 Evolution – TEMPLATE
Insert bumper.
1800s now
time
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text, filler text
text, filler text
text, filler text
text, filler text
text, filler text
text, filler text
text, filler text
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Insert headline
9 Core Technologies of Service 4.0 - TEMPLATE
Insert bumper.
BIG DATA &
ANALYTICS
CLOUD
COMPUTING
ROBOTIC
PROCESS
AUTOMATION
(RPA)
SOCIAL
MEDIA
COGNITIVE
COMPUTING
VIRTUALIZATION
INTERNET OF
THINGS (IOT)
SMART
DEVICES
AUGMENTED
REALITY
• Filler text, filler
text, filler text, filler
text.
text.
text.
text.

Insert headline
10 Dimensions of Service 4.0 Transformation – TEMPLATE
Insert bumper.
Service
Provider
Operating
Model
Ambition
Governance
Organization
People
Partnership Model
1
2
3
4
5
6
7
8
9
10
IT Scope
IT Delivery
Sequencing
Rollout Plan
Cultural Change

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1
Flevy (www.flevy.com) is the marketplace
for premium documents. These
documents can range from Business
Frameworks to Financial Models to
PowerPoint Templates.
Flevy was founded under the principle that
companies waste a lot of time and money
recreating the same foundational business
documents. Our vision is for Flevy to
become a comprehensive knowledge base
of business documents. All organizations,
from startups to large enterprises, can use
Flevy— whether it's to jumpstart projects, to
find reference or comparison materials, or
just to learn.
Contact Us
Please contact us with any questions you may have
about our company.
• General Inquiries
support@flevy.com
• Media/PR
press@flevy.com
• Billing
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