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A Golden Opportunity: The Shift to Services

Ho Seong Kim, ASEAN Communication, Media and High Tech (CMT) Lead, Accenture | May 12, 2016
Embracing the As-a-Service model will impact most corporate functions including sales and marketing, research and development, finance and administration, customer support and logistics.

Stand-alone consumer technology products are becoming obsolete. Internet of Things (IoT) and cloud computing are converting every day products into interconnected, multi-faceted platforms. Functioning as multi-purpose, interactive platforms, smartphones, tablets, gaming consoles, TVs and security cameras transcend their original purpose. They provide their suppliers with consistent pipelines for reaching consumers and generate valuable analytics about how platforms are used.

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As promising as this sounds, serious and systemic challenges associated with security, privacy and logistics of launching a services model need to be overcome. In cases where traditional high-tech companies have been slow to address these issues, user confidence and the inherent value of the service have been undermined. For many, the main challenge is figuring out when and where to begin.

Leveraging the golden opportunity

High-tech hardware manufacturers need a structured approach to the problem that starts with forming a strategy.

As part of this, a key component is recognising that As-a-Service permeates virtually all aspects of a business. As such, every contingency must be planned.

Research and development functions need to be equipped to handle swift and continuous product evolution. Real-time insights into customer behaviors and product performance must be gathered to change the way sales and marketing teams operate.

Pricing and billing needs to be more responsive to fluctuating demand. New products and platforms require supply chains in multiple cloud modes with comprehensive connected tools and processes.

For each company, a separate As-a-Service business unit should operate alongside the company's traditional business. To minimise corporate disruption while the new business grows, the older business can be ramped down over time. This dual and coordinated approach controls disruption and eases the transition.

Final thoughts

Clients today are demanding vendors that require end-to-end accountability in terms of the delivery of services. In addition, clients are also focus on buying outcomes instead of solutions. The natural remedy to these two important client requirements is to deliver it through the As-A-Service model.

To succeed, companies must be realistic and ready to embrace the scale and investment costs in this business model change. Yet as daunting as this is, the industry is accelerating full throttle in the direction of an As-a-Service economy.

High-tech companies, particularly traditional hardware manufacturers, must embrace this fundamental change. Whether they do this, at what speed, and to what level of effectiveness will be the most compelling and important story to track this year.

 

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