At IFS, it’s all about so-called moments of service at the moment. It’s a central concept in the company’s vision. CEO Darren Roos, of course, often talks about it as well. We spoke to him at length during the recent IFS Connect Benelux event, and dug a bit deeper into this topic. Why are moments of service so important right now?
The application landscape of organizations is no longer as orderly and well-organized as it used to be. At least, that is the impression we get when we talk to both suppliers and customers. In some areas, of course, there is still an approach based on complete suites of software. However, it is also increasingly common for fragmentation to occur. That is, organizations are increasingly choosing the applications that best fit their specific needs and requirements. These often do not come from the same supplier.
Fragmentation in the application landscape
In the world in which IFS operates, that of ERP, FSM/EAM and CRM, among others, Roos has certainly seen this fragmentation take place as well. In his words, “No organization is wall-to-wall SAP anymore.” SAP functions as an example here. You can fill in the name of other major players in the market as well. This shift from everything from a single provider to a fragmented application landscape is not something that IFS initiated, he immediately adds. It’s simply the direction customers have taken.
Whatever the exact reason for this change, it has quite an impact on a company like IFS. As one of the smaller (specialist) players in the markets in which it operates, large, high-profile customers were often out of reach for IFS. Fragmentation changes that in IFS’s favor. Recently the company signed up one of the largest telcos in the world. That customer does not use the entire suite of IFS applications, but a specific component. In this case it was mainly (part of) the Field Service Management component. The customer is now integrating that with SAP.
Of course, this fragmentation cannot be separated from the increasingly important integration between components. “It has all become much more practical because more and more integration is possible”, summarizes Roos. This means that you can now choose the components that best suit your organization. You no longer have to choose a full suite of components from a single supplier.
Servitization as the foundation
According to Roos, a major cause of the fragmentation of the application landscape can be found in the shift towards servitization. Nowadays you don’t so much buy products, but the services that suppliers provide with those products. This can take many forms. Within the manufacturing industry you can think of selling services related to the maintenance of products or a complete fleet of products.
An example of servitization that we regularly hear when speaking about the subject with IFS deals with aircraft engines. At Rolls Royce you no longer buy an aircraft engine, but the number of hours you can fly with it. From Rolls Royce’s point of view, this involves more than just selling the hardware, i.e. the engine. It also involves selling all kinds of services. From the supplier’s point of view, this provides more recurring revenue. The customer, on the other hand, can outsource more and focus on its core business. This may cost more than the one-time purchase of a product. On the other hand, organizations don’t have to invest in these services internally anymore. At the end of the day, the net result should be positive for the customer, both in terms of investments and more focus on running its own business.
Servitization does not work without software, however. Think for example of software to monitor the operation of products. Or software to schedule and perform maintenance. That’s where fragmentation comes in. Since the performance of this type of software can often be seen as critical to business operations, it is important that the best software is chosen for it. This means that you look at what you need for each purpose and choose the software that best fits within your application landscape, and therefore benefits the organization the most.
Moments of service
Via the fragmentation of the application landscape as a consequence of servitization, we have now arrived at the concept ‘moment of service’, which Roos and IFS talk about so often. These moments of service, as well as the fragmentation we talked about above, are a direct consequence of servitization, Roos points out. “Servitization implies more moments of service, but to be able to provide that, the fragmentation of the application landscape is inevitable,” he summarizes the relationships between the three concepts we cover in this article. Moments of service must be and remain the starting point for modern services, is Roos’ firm belief: “Forget about application landscapes, think of moments of service.”
During service delivery, there are many moments when a supplier delivers part of its service. So that’s a moment of service every time. The idea of Roos and of IFS is that you can and should make the difference at those moments. To do this, you have to have the best software at each moment or service. This makes the whole IT estate quite complex, because many services touch many different applications. It becomes especially complex when you consider that you can only really adopt the moments of service approach when your application landscape is set up for it. This implies that it will first get messier before you can organize everything optimally. According to Roos it is therefore crucial that organizations take a critical look at this. Or as he puts it: “Organizations should rationalize their IT estate as much as possible.”
Don’t forget the voice of the customer
Fundamentally, the approach around moments of service that IFS takes is a modern one, taking into account recent trends such as servitization and the fragmentation of the application landscape. It also fits with the status of challenger that IFS still is in the markets in which it is active. As a challenger you also have to look at the market in an innovative way and adapt your own products and services accordingly.
The introduction of IFS Cloud earlier this year is a good example of this innovation. That platform was developed with servitization and application integration in mind. The latter is possible through REST APIs, but also through the collaboration with Dell Boomi. The platform is also modular, so organizations can choose the appropriate module for each moment or service. Not every moment of service needs to be served from the IFS platform. We already saw this above in the example of the integration of the IFS FSM offering with the telco’s SAP environment.
However, it’s certainly not all about the technology, Roos points out. If moments of service are the starting point, the voice of the customer also becomes more important. After all, they are the ones who judge the service. However, this also presents a challenge, he says: “Traditional customer satisfaction surveys and tools do not go to the right people within organizations.” Hence, IFS launched the Voice of the Customer program. The acquisition of Customerville last year is an important part of this. The idea is that this will make it possible to ask for feedback at all moments of service during the entire service, to the right people within organizations.
Knowing what you do makes for better moments of service
Including the voice of the customer in IFS’ moments-of-service approach basically completes the circle. It acts as a feedback loop on the actual moments of service that organizations deliver. Ideally, this feedback not only indicates whether an organization is doing well, but goes a lot deeper. “It’s not about knowing how you do, but what you do,” Roos summarizes this point.
Only by having the right technology as well as listening to customers will you create the right moments of service. You then link these to the actual delivery of a better experience. This leads to higher real customer satisfaction and thus to customers who remain customers for longer. At least, that is the theory. As always, it will not be as straightforward in practice, as we already hinted at above. In any case, it is a well thought-out vision of IFS, and we will see in practice how it works out for the company and for its customers.