Service is the new product

Each service in an Enterprise will be treated like a product in Digital World , that is highly standardized & templatized . Productization helps services to be delivered zero-touch and enables them to be transacted over a service exchange. But designing these services requires a completely different mindset and rhythm..

In the previous blog, we looked at Abstraction as a key lever in unleashing new potential in Service Delivery. Abstraction de-lineated service delivery and service creation and enabled newer ways of working.

As part of our ongoing blog series on Digital Service Model, we now explore how a paradigm shift in service delivery model impacts the future of Digital Enterprise.

Organizations will start to move the Process centric Delivery model to a Productized delivery model. Organizations are used to an ITIL based rhythm when it comes to service delivery. The current model has supported them well for Incident, Problem or a Change management type of requests. This has worked well so far in the last 2 decades when the organizations did not have any standard to begin with. But with the rising user expectations in digital world and complex business models, the delivery model needs to shift.

Productization is one of the core tenets of Digital Service Model.

This takes inspiration from the consumer world where each service is packaged in the form of a product. Productization makes it easy for services to be transacted, metered and consumed over an exchange. As an example, in the case of Uber, taxi-ride is a productized service. With Netflix, movie-streaming is a packaged service. Providers are able to build, track, maintain and bill customers at a productized service level. For consumers it enables the flexibility and a better experience. It provides a templatized way delivery can happen.

Productization in an Enterprises refers to packaging and designing services that are highly standardized and templatized at the point of delivery yet highly personalized at the point of consumption. Productization helps services to be transacted over an exchange.

Any of the services below in an Enterprise can be published as a product

Organizations have a consistent way in which these services can be delivered. Packaging these as products helps in scaling up service delivery at the speed of request. Each product can be offerd as a service catalog to the end users

Here are some of the guidelines associated with Productization in an Enterprise.

a. Each product comes with well defined service specification

b. Each product has pre-defined inputs, outputs, dependencies and constraints. This ensures each product can exist on its own as a stand-alone component or can be chained like a ‘‘Lego block’ with other products to provide more complex services.

c. Each product has well defined options and choices. This ensures services can be personalized at the point of consumption.

d. Each product is designed to address multiple service delivery methods — user triggered, machine triggered etc and delivered across any UI channel

e. Each product comes preloaded with validations & error handling to ensure easy diagnostics.

f. Each product is designed with mechanisms of traceability so it is easy track from a compliance perspective.

g. Each product can be rendered as a ‘software-defined-component’ so they are easily portable, can be versioned and deployed across any channel.

Product Management in Service Delivery world.

The new Digitization way of doing things will require Enterprises to radically shift from the conventional Service Management mindset to a Product Management mindset.

Enterprises will use Design thinking, Lean approach and Agile methodology to design and develop products.

Each product will be designed as a fully automated functional component that is self-service enabled. They can be provided as a service catalog on their own. They are also built with an open framework so that can serve any scenario across any user persona and can also be chained across with other service catalogs very easily (like Lego blocks)

It is also important to highlight that we do not expect the ITIL based approach going away any soon. Organizations will continue to leverage both the current service delivery model and digital service model in parallel for next few years. However the percentage of automated services delivered through a digital service delivery will continue to increase steadily and reach a peak in a 4–6 year period depending on organizational size and maturity.

Evolution of Product Manager role:

Organizations will start to have Product manager as a new role, that will own and manage the entire process from service design thru deployment & life cycle management at an Enteprise or a functional level.

We expect a global Enterprise with 3000–5000 employees to have any where between 100–150 service catalogs for their Digital workplace/ data center needs

The product manager will start to look at these service needs holistically, on the way they will be designed, developed and maintained.

In the representation below, we have highlighted the difference between the Process centric and Product centric approach.

In the diagram above we highlight how a Service Delivery manager focuses on executing IT automation in the current scenario. The whole process of automating a new need is run as a a separate program where organizations incur costs and employ resources with skills for a period of time before they start to see benefits. The decision making for taking up any new automation is based on the cost-benefit analysis. Even after this approach, the benefits taper at some point.

User experience does not sit at the center decision making in the current process-centric approach.

Compare this with the new Product mindset required in Digital age. The Product manager evaluates and identifies all the product catalog opportunities for the organization. Services will be published as catalogs on a service exchange in the digital world by partners and providers. The Product manager merely has to specify the requirement and ensure the catalogs meet her/his demands. The focus is in identifying the right catalogs that fit-their-purpose and enhancing the value to the end-users. They are constantly engaged capturing consumer experience metrics for performance of any service catalog. Product manager performs usage/spend analysis, constantly evaluates the validity of the service catalog and runs a tight service life cycle management. They can version control the services, retire services that are no longer used.

Organizations need to be open to the idea of product manager playing a critical role in the future of digital service delivery.

Apart from the benefits highlighted earlier, here are some additional benefits worth mentioning with the productized delivery model

a. Better Control with a Single Layer of consumption:

Productization presents an opportunity for enterprises to consume services at a single layer across any system/tool or Platform. Product managers can control the entire usage/spend for services at this layer. Also provides a single view from a compliance reporting perspective.

b. Measure Consumer Experience at a Service Catalog Level:

Productization helps in tracking value offered at a service catalog level. Today any customer satisfaction is done after the fact and cannot be tracked a service level. With the productized approach, you are able to find how the user-onboarding experience was for a new employee that just joined.

In summary, we have seen how productized services can change the way Enterprise can transform their service delivery maturity. Have you started your productization journey in your Enterprises? Are you seeing the benefits? Chime in with in your thoughts?

In our next blog we will look at how Business model paradigm shift will impact Digital Service Delivery in Enterprises.