Characteristics of a solutions provider

Manufacturers globally are looking for ways of improving their profitability by transforming their offering towards services and solutions. What is crucial in this transformation is to clarify the definition of a solution. It does not equal products and services. Rather, a solution is an answer to a specified customer need. Example: improving energy efficiency. Improving availability of an installation for increased running hours. Reducing use of fuel in transportation.

A change towards an integrated solutions provider requires a wider scope of competences, such as customer business understanding, technology knowledge, auditing, consulting, communications and supply management or partnering. A study by Windahl, Andersson, Berggren and Nehler on “Manufacturing firms and integrated solutions: characteristics and implications” by European Journal of Innovation Management vol 7 iss 3 pp. 218-228 indicates that intelligent technology enables a continuous optimisation of customer operations. Developing services to complement the installed base requires fewer assets, is often counter cyclical and can provide higher margins.

Characteristic in a change process away from hardware or capital intense production is focusing more on customer process throughout the customer journey, including both business planning and operations. Some models may include even possibility for customers to operate equipment or installation without owning, maintaining or operating it.

Within the transformation, a key success factor is to plan how to build the capabilities supporting the customer performance. According to Windahl, Andersson, Berggren and Nehler, some key factors are: pricing models, generating new performance indicators against the traditional manufacturing set-up, increased risk taking and changing the relationship with customers and partners, including increased customer interaction and co-production. In their competence development model, they see a difference of “shaping the market” and a “interacting” as a strategic orientation. Listed key competences of an integrated solutions provider include technical and application competence, systems integration competence, partnering competence, as well as market / business and consulting competence.

It is no wonder companies are currently investing in advanced customer understanding models, CRM systems and continuous sales competence development. All gears towards collecting a flow of information from customers. Not only related to customer business and their needs, but increasingly into customer operational profiles, use data and related analytics. Providing integrated solutions is building a consistent business model with a customer, the solutions provider being an integral part of customers operations on a daily basis.

Not all customers are into ways of risk reduction and differentiating their services to their own customers. Thus a manufacturing company need to consider - and decide - the level of transformation they aim at, how much to build on existing manufacturing capabilities, how much to invest in building service and solutions capabilities – and to which customers to focus on. One way is to separate manufacturing altogether and build a new approach for customer focused solutions business with new metrics, culture and incentives.

Service opportunities for the “lifecycle” of Konmari?

There are various definitions for mindfulness, and the Finnish sanctuary, sauna, could act as a perfect example of an approach for focused thinking. However, sauna no longer acts as the only source for improving your self-awareness. We use life coaches, personal trainers, yoga and breathing exercises to find focus in life. To find joy of life. To find meaning of life. To find the next level. To find balance between personal and business life. To identify ourselves in the complexity of life.

The era of searching for balance and meaning has generated a number of approaches that fulfil our hunger for information and ideas - or simply generate joy and excitement.

In the interest of a best-seller, I read KonMari by Marie Kondo. What is it about the KonMari movement that has made more than 20.000 Finns join the Facebook group or more than 50.000 books sold in Finland?

The KonMari movement could be described as finding joy for life. Or at least getting your home organised. What Kondo does is link the search of joy with something simple – by cleaning and organizing our homes. Getting rid of unnecessary stuff concretises how one does not spend time on unnecessary things one doesn’t like or you doesn’t pleasure. Looking at the stories on KonMari movement, the method seems to work from shifting the logic from your home to your whole living. KonMari is about creating an environment where you see and use things that you appreciate. My friend is expressing excitement about getting rid of 30 year old clothes and old childrens toys.

But what when you have read the book and organized your home? What´s next? How can we fulfil the search of joy for the Konmaris for the long run? What is the “lifecycle” of these fans?

Marie Kondo does not really take stand into where to take all the 30 bags of unnecessary items from your home. Could this be a source for further ideas?

As much as you like food, groceries and goods being delivered right to your door, wouldn’t be equally nice having things delivered out of your house, from your door?

In Finland recycling has been arranged extremely well. There is a system where to leave paper, glass, cardboard, metal and plastic. There are public recycling stations which accept items free of charge. There are logistics services that collect old used electronics. But are there turnkey solutions for recycling the full stack of unnecessary items you want to let go?

If we look at the lifecycle of an enthusiast who would like to maintain the life of cleanliness, what could be the opportunities?

-        Somebody to clean and organize. Including categorizing, providing packaging and storing solutions and getting the job done. There are professional organisers but is the market full? How could one differentiate from family homes to elderly homes or singles? People with different hobbies?

-        Turnkey solutions getting rid of things. Somebody to recycle, donate or sell. Take to rummage sales or sell at online store. Take things for charity or recycling stations.

-        Ensuring your home stays clean and organized throughout years to come. Making progress checks and helping out at agreed frequency. Providing clear service intervals or monitoring the condition of your home. Making health checks to your home and yourself. The intervals may include highlights like “children leaving home” or “moving out”.

-        Generating a memorable experience of things you may miss. Documenting, photographing things you feel you may yet want to see again. Generating digital versions of paper photos or old VCR videos. Making a summary of your favourite books or scrapbooks you no longer need.

-        Etc.

In the light of the movement and seeing all the existing options around us, could there even be a Finnish version of it? “Siivoa ja iloitse”? “Desinfioi ja nauti”?

Finnish export services – eternal source of hope or source of new economic growth?

In early 2015, Kauppalehti reported a recession of Finnish export services. After the financial crisis, the growth of Finnish export services stagnated - due to e.g. decrease in industrial services. The representatives of Finnish service employers, Palta, stated that Finnish service exports should see faster growth than that of other industries. Palta wished for initiatives boosting role of export services.

What are Finnish export services really?

Palta´s economic outlook 2016 reports following as service industries: logistics (e.g. air, land, sea, postal services), information and communications (e.g. media, audiovisual, publishing), expert services (e.g. consultancy, marketing, research, technical), administrative and support services (e.g. recruitment, travel, rental, leasing, security), entertainment (culture, sports, gambling/gaming/lottery), other services (e.g. real estate).

What role do export services play today in our overall foreign trade?

Statistics Finland reports Finnish export services having grown by Eur 2 bill in 2015. Export services grew in all segments with exception of postal services. Export services totalled Eur 16,9 bill. According to Palta private services within 2000´s have generated 200.000 new jobs. Talouselämä article on export services states more than 40% of Finnish export services come from IT, such as telecommunications and information services. With some markets, services already exceed the export of goods. More than half of export services go to EU countries, USA and China.

It is expected that private services are to have moderate growth within a wider number of industries. It is also predicted the number of employees will increase. However, Palta lists a number of global factors that may affect these trends, e.g. downturn of developing countries, impact of Brexit, and the overall restructuring of the Finnish economy.

Why should Finland boost export services?

Palta has a number of relevant suggestions. First, international trade brings growth potential. Since domestic growth potential is limited, we need to go abroad. Second, there is high level of innovation in Finland yet only one fourth of companies do export. Of those companies focusing on digital services, one half are doing export. This is low given digital services open immediate doors to global business. Third, we need to increase added value from Finland ie part of products and services generated in Finland. Finland is not the hub for mass production. Our strengths are in generating high value for customers.

And has Palta´s 2015 wish for a service export program to boost internationalization of services been heard? At least majority of Finpro´s Export Finland programs today focus on technology and service excellence. One recent example is establishment of Luovimo, a growth program tailored for creative companies focusing eg on digital services.

Export services are a source for future growth. Industries being transferred to service businesses, as well as internationalisation of services is a strategic contest where our skills may be of best use. Palta´s Matti Paavonen view in May 2016 report: increasing the national value of export is more important than the overall gross value. Ie we need to be able to produce bigger share of service in Finland. In service business, given our level of education and innovation opportunities, we can give and gain more. Signals are in the air - currently majority of export growth comes from service business.

Marketing as opportunity – investing for growth

Marketing and communications professional Anne Korkiakoski is leading a program for raising the profile of marketing in Finland. Within the state of economic downturn, layoffs, budget cuts – marketing can provide a positive alternative. Marketing can be a driver for improved revenue – and even a source of growth for the whole Finnish economy. No wonder Anne has this year been a guest speaker at more than 50 events, including economic forums (not only for marketeers but for business leaders). Looking at Swedish brands success we could state that investing smart in building brands makes sense.

We are currently in a phase where every penny counts and organisations are asked to “be careful” with investments and “look for where to cut costs”. True – profitability is result of both progress of top line sales, as well as spending. However instead of general cautiousness, wouldn’t it make sense to look into where investment does make sense? What is the key business area or customer group, where we need to put our resources – sales, marketing, services, operations – to make most of the opportunities available. This is where we come back to capabilities of intelligence and analyzing the customer base, being able to draw conclusions where the company has most potential. Therefore let´s be careful with spending but let´s also invest where it is essential.

I was recently asked why we need to find out fact based return calculations and sharp KPIs for both strategic and operative marketing actions – isn’t it evident that we need to invest in marketing and that everybody understands the need for promoting our excellence. No. In the daily business cost cutting is close to a standard and strong requirements for improved profitability make every penny count. Marketing is not only striving for its existence, it is competing against other investments – such as product development, sales force, digital customer services and competence development.

Thus, it is essential to improve the commercial capabilities of the whole organization to ensure marketing is not only seen and conducted as a “function” – but marketing is an essential part of every customer interaction and that every person in the customer interface is looking into further opportunities in either serving the customer better or considering how to add more value. Marketing can have a strategic role, including wide customer focused and commercial capabilities, and therefore is a true investment opportunity for any company´s growth.

Involving employees for a great brand

Sometimes it feels organisations spend more time on internal processes, "getting organized" and clarifying the way of working rather than focusing on understanding where they are with customers. Getting organized is even done before the strategy is clear, which is odd - shouldn't one know where to focus before putting resources in place.

In a service organization it is however vital that the employees are engaged in a meaningful way in understanding their role to form a unified chain of service activities. How the customer experiences the company contributes to the brand. The brand is an image and a perception - and based on various associations the customers have with the company. All employees contribute. Thus a clear brand destination should be defined.

The book Bulkista brändiksi ("From bulk to a brand") by Kahri, Kahri, Mäkinen and Ahto, states that the employees of a service organization have a vital role in producing a customer experience. The changes in the way of working of a company have to be based on involving employees. What the employees do and how they perform has a direct impact to the brand value of the company. Management has to make sure that employees have understood the company mission, values, vision and objectives based on the strategy. All of this has to be simple enough that personnel desires and strives at acting in new ways required.

Brand brings a strong customer point of view to the organization via how the company wants to be perceived and be positioned - and gives a soul to its operations. The brand should be reflected in services, design, all customer interactions, how the employees behave and how the company communicates with its customers and stakeholders.

In order to build a strong brand, employees should be engaged to clarify:
* strategy and key focus areas - what and whom to focus on
* vision - what kind of company do we want to be in the long term
* mission - what is our role
* customer promise - what do we promise for our customers that makes us unique
* brand - how we want to be perceived by our customers and how we should behave.

Numerous lists of things may not be memorable to understand what the company stands for. Rather, examples of way of working - in good and bad - and celebrating the positive successes. A company that strives at being more open, innovative and collaborative towards new stakeholders succeeds in running an international level innovation contest, which is building excitement internally and externally. A company that focuses on safety renews its tools and processes - and decreases number of injuries. A company that desires to be faster and more flexible introduces a service promise that includes given quotation and delivery times. Performing any such activities requires that employees plan, implement and follow up to influence the service activities to customers - and the brand.

Digital customer experience... is not a channel

Working on digital customer experience does not mean looking into how the company is present at various communications channels and pushes information towards the customer. Presence in multiple social media channels does not improve the interaction with the customer more than any other channel unless it truly matches with what the customer is looking for, adds value and is available when needed.

Digitizing customer experience is a customer journey experience that happens across all stages of customer relationship - even before customer is a customer - and engages with the customer when and where needed within numerous digital platforms not limited to communications.

Products and services should generate value throughout the customer journey when provided in digital environments. Often digitizing a product or a service provides more value to the customer via better data, analysis of it and recommendations made based on the analysis.

Digital service experiences that matches customer needs should be planned from customer point of view. These could include eg online services, chat functions, mobile services, and should be available when needed and within platforms preferred by the customer.

Customer communications should take into consideration relationship building before, during and after purchase, and help in choice and decision making, guiding the customer towards final sale. Nowdays customers are more knowledgeable of products and services when they approach the service provider, which changes the focus in communications towards communicating benefits and ensuring ease of purchase.

It could be summarized that digital customer experience is building capabilities within an organization to create way of working with customer, as well as building a way of working internally.

Overall, customer experience generates a brand experience - how the customer interacts with the brand throughout everything she or he does and ultimately builds an image with impact to reputation of the service provider.

Key building blocks thus of planning a digital customer experience may consist of:
- customer understanding - from various viewpoints that guide the generation of services, offering, customer management and delivery capabilities
- interactions throughout customer journey in various digital platforms including products and services
- tools, processes, platforms that support the customer experience
- culture of customer centricity to make sure every individual and every function of the organization generate their share of the experience towards common goals
- and finally follow-up with customer whether services support her or him and in some cases providing opportunities for co-creation or more individual services.

Planning a meaningful customer experience

Organisations are today increasingly working on customer experience management in order to generate a coherent approach towards their customers. Why? Because we live in the economy where profitability is based on evaluation of every investment and growth with clear differentiating factors is a must. Customers may no longer be only looking for a product or a delivery. They are looking for what serves them best. It makes sense to focus on customer understanding, in order to know where to focus, and provide relevant processes, services, delivery approaches, communications and pricing options to support the customers requirements and needs.

Customer understanding is at the heart of meaningful customer experience.
In a service organization, the success lies on the internal capabilities and skills of the employees. Service is created or delivered by people. Thus, it is important that the organization has support, motivation and an organizational culture that enhances better customer understanding and its use. Where to get started? Customer understanding may comprise of various elements. Starting from industry understanding - what are the drivers of the industry, what impacts the companies and what are the trends and technologies driving businesses forward. Looking more inside the customer organisations, it is important to understand customer needs, customer purchase processes and customer strategies. An internal perspective is to acknowledge what is the value of the customer, and what is their supplier strategy. Regardless of the perspective, what makes a difference is how to use the customer understanding in daily operations and for longer term development. Different functions may make more sense from different models.

Lets take customer needs and purchase behaviours - which may give most input for offering development - how to package and price a product or a service. Knowing what the customer requires is the basis for meaningful offering and value proposition. Taking customer value, may be relevant for planning prioritization models and how to resource customer management.

A logical view to customers lifecycle operations is definition of customer journey. And taken it from customer point of view. Finding meaningful steps to keep focus can help identify strengths and weaknesses how the customer is faced throughout the business or relationship.

The models are many. Some companies start from one, initiate learning and gradually get additional viewpoints. Where customer understanding may be at its best when all customer viewpoints come together to form a coherent customer experience. This may mean that company chooses to focus on its most valuable and potential customers, and is able to build services and products, delivered in an optimal way to these customer groups to become win-win situation. Operations must be profitable for all parties. Therefore companies face the pain taking decisions where to focus and also what not to do.