The State of Service Management in Europe

The State of Service Management in Europe

Research on European service organizations show that they continue to transform their service businesses and look to transform it in 2013. Again, when we look at a spectrum from reactive service to preventive, predictive, and value added services to the customers, we do see European organizations on that path. The best in class are much further down that path, if you will, on the more preventive, predictive, looking at customer information and customer insight to develop a more customer centric service model, and balance that with operational excellence, operations efficiencies. European organizations are not as far as we see the North American businesses, in terms of transforming service from a cost center to a profit center or from the reactive model of service to the more preventive, predictive model. We definitely see them down that path because they understand the benefits of satisfying and retaining customers.

When we look at the challenges for these European service businesses, especially in 2013, we see the economy continue to have a much more significant impact on European organizations than it does on some that we're seeing across the world. They are much more cognizant of the cost of delivering service. The margin discussion around service really gets focused on the cost. They're not really looking to add in a significant amount of resources. They're really looking to minimize their costs by focusing on process efficiency. That's where we see the economy, the overall macro impact of the economy, really having a significant impact on the cost discussions of service. Whenever the discussion comes into play about promoting or improving service or making investments in service, these organizations in Europe tend to look at the cost ramifications of that before they look at the revenue potential. That's a cultural mindset that we see changing gradually, looking at the profitability of service, as opposed to just the cost of service.

We continue to see more and more competition in service. The economy and the impact on customer spending and the internal impact on cost is a significant challenge for these European organizations to overcome in 2013.

When we look at the leaders in Europe from a service transformation, from a service organization perspective, the areas that they're looking to invest in 2013 to move their businesses forward come to, and are similar to what we see across the rest of the globe. There is a continued focus on leadership within the service business to have chief service officers in place. We actually see these organizations are a much faster path to adopting chief service officers than we see in the North American market. That's an interesting statistic for us to see.

We also see them focusing on knowledge management, performance management, tracking the performance of the different groups of service, and trying to integrate that together. Automation comes into play to improve processes, improve efficiencies in the business, then provide an end-to-end view of their service, sort of the overall service life cycle, if you will. Not just to treat service function in isolation, but to look at solutions from an end-to-end point of view, to provide chief service officers with an overall view of the service business.

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