Table Of Content

October1993 INPUT Vol.iV,No.20 c Routeto: Research Bulletin — APublicationfromINPUTSCustomerServicesProgramme Europe — New Business Services Direction for Customer Services CustomerServices(CS)organisationscommitted providersusheredintheeraofcustomerservice. toprovidingcompleteITinfrastructuresupport Thisshiftemphasisedpersonalserviceand servicesareincreasinglylikelytomeet qualityofoperationsovertechnicalskillsand competitionfromnon-ITindustryvendors. This competence. developmentshouldbeviewedasanopportunity notathreat,sinceitsignalsaverylargepotential INPUTforecaststhatoverthenextfivetoten newmarketforCSfirmsthatpreparethemselves years,asimilarshiftwilltakeplaceinwhich toattackthewideropportunityofbusiness customerserviceswillbeovertakenbythe services. conceptofbusinessservices. Exhibit1expresses thesetrendsgraphically. Theopportunitytoprovidebusinessserviceswill beoneofthekeydevelopmentsoverthenext TheconceptexpressedinExhibit1doesnot fivetotenyears. Customerservicesvendorscan implytheeliminationofbasicactivities,simply profitfromthisopportunitythrough: theirsubordinationtoamoredominantindustry paradigm. Adoptionofthepredominant • Understandingthestrategicfactorsdrivingits conceptinthemarketimpliesaccesstofaster development growingmarketsectorsandhighermargin opportunities. • Identifyingthemostappropriatemarket sectorstotarget . .. Thefundamentalstrategicforcecreatingthe businessset\'icesopportunityisthetrendtowards • Evaluatingthenewcompetitiveenvironment outsourcing. Todate,muchattentionhasbeen thatmustbetackled. paidintheITindustrytooutsourcingIT functionsnotablysystemsoperations(IT TheEmergenceoftheBusiness facilitiesmanagement). ServicesMarket TheincreasingintegrationofITfunctionsinto uDnuirtirnegvtehneue1s98a0n'sd,mdaercgliinnessainndfiienlcdrmeaasiinntgenance dcaoynsteoqduaeyntbubsliunrersinsgoopfertahteiodniss,tiancntdiotnhebetween competitionfromindependentmaintenance them,isthefundamentalforcedrivingthe emergenceofabusinessservicesmarket. ^1993byINPUT.Reproductionprohibited. RESEARCHBULLETIN Exhibit1 CustomerServiceMarketWaves Business Customer Services Field Maintenance 1980 1990 2000 Source:INPUT [ tdentifyingBusinessServices Adistinctionisalsomadebetweenprojectand Opportunities operationalactivities, resultinginfourdistinct areasofactivity. SystemsOperationsand Emergingservicesmarketsarebynature SystemsIntegration(SI)haveemergedas fragmentedandcharacterisedbyconsiderable significantservicemarketsectorssincethemid diversity. Itisthereforeamarketingimperative 1980's. toclearlyidentifytheopportunitiesthat: Thebusinessservicesopportunitiesindicated • Offerthehighestpotentialforgrowthand are: development • BusinessIntegrationServices(BIS)already • Ainrferamsotrsutctauprperoapnrdiasktielltobatshee.firmsexisting itadlensteirfviiecdesasmaarskuebt-s(esceteorReosfetahrecehnBvuilrloentminen- No.19). TheschematicshowninExhibit2isafirststep towardsfocussingonthemostappropriate • BusinessOperations. oorpgpaonritsuantiitoiness.forcustomerservices AnumberofmajorITsuppliers,notablyDigital andUnisyshavealreadydevelopedsignificant Exhibit2indicatesadistinctionbetweenpurely initiativesintheBISsector. ITrelatedactivitiesandnon-IT,however,the latterwillincreasinglyinvolveresponsibilityfor ITactivitiesaswell. 2 »1993byINPUT.Reproductionprohibited. RESEARCHBULLETIN Afocusonsupportingthephysical Exhibit2 infrastructureofanorganisation, fromthestartingpointofcomputer DefiningtheBusinessServicesOpportunity maintenance,leadstoamuch greateropportunitythanjust providingITcustomerservices. A prerequisiteisthepreparednessto takeresponsibilityforandoperate PROJECTS SI BIS t"rlaodwi-ttieocnhal"IpTrosceersvsiecess.asEweDlSlaissone ofthefewexamplesofITvendors attunedtothisopportunity,astheir logisticscontractwithMemorexin Europedemonstrates. OPERATIONS OPSEYRSATTEIMOSNS OPBEURSAITNEISOSNS IdentifyingNewCompetitors Oneofthemajorsupporting argumentsfortheemergenceofa businessservicesmarketisthe IT NON-IT activityofnon-ITindustryvendorsin providingthistypeofservicetoday. Source:INPUT However,thebusinessservicesthey providetendtobefragmented,the integrationofITsupportactivityislimitedand However,thereislittleevidencetodateof therehasbeennoorganisedidentificationof customerservicesvendorshavingmade businessservicesasadistinctmarketopportunity. initiativestowardsexploitingbusiness operationsopportunities,potentiallymany ThedevelopmentoftheCommercialSystems timesthesizeoftheBISmarket. Integration(SI)andITOutsourcingmarketsover thelastdecadeindicatesthattherearesignificant Thebusinessoperationsmarketcanbe benefitstobegainedfromanorganisedstructured furtherdividedbetween"high-tech"and approachtowhatpreviouslyhadbeenfragmented "low-tech"activities. Customerservices andopportunisticmarkets. vendorsshouldseriouslyexaminethe requirementforhandling"low-tech"services Customerservicesvendorsareinastrongposition, inordertoensuretheircontrolof"high- particularlythosewithclearbrandrecognition,to tech"services. benefitfromanorganisedapproachtoproviding Afurtherdistinctionisthatbetween b(unsoinn-eIsTssienrdvuiscters.y)Acocmapreetfiutliveevavleunadtoirosn,owfitthhewnheowm supportingthelogicalandphysical alliancesmayneedtobeformed,willbeextremely infrastructureofafirm. important. ThemajorfocusofITvendors,particularly informationservicesfirmslikeAndersen ConsultingandCapGeminiSogeti,hasbeen towardssupportingthelogicalinfrastructure ofclients,albeitbasedonoperatingtheIT systems. "1993byINPUT.Reproductionprohibited. 3 INPUT RESEARCHBULLETIN Someexamplesofthefirmsthatarealready Exhibits3and4providesomekeydataabout activeinsomewayinprovidingbusinessservices theSERCOorganisation. arelistedbelow: Customerservicesvendorsarewellpositioned AIRWORK(UK) toattackthebusinessservicesopportunity. This BCIESTEFTac(iIltiatliye)sManagement(UK) , rperqeupiarreesdntheessmatonabegedmreivnetnpbayrcaudsitgommeshrifnteoefds DASA(Germany) beyondtheboundariesoftheIT/ DRAKE&SCULLTechnicalServices(UK) communicationsenvironment. HUNTINGENGINEERING(UK) IFMCo.(UK) SELECTFacilitiesManagement(UK) SERCO(UK) Exhibit3 THOMSON(France). Serco ScoEmRpCanOyisthaatgoisodalerexaadmyplinetohfisthmeartkyepetoafndthat Osfefrevriicnegsawicthoimnproenheecnosnitvreacrtangeof islikelytorepresentanincreasingcompetitive threattoIT-vendors. Itsactivitiesspanboth lALacquiredApril1992 "high-tech"and"low-tech"services,ranging fromitsmajorfacilitiesmanagementcontract $225MAnnualRevenue(1992) fortheFylingdalesearlywarningradarsystem throughto"grassmanagement"inHydePark, 6,000+staff London. SERCO'sunifyingmanagement croanngceepotfissetrhveicpersowviitshiionnoofneaccoonmtprarceth.ensive Source:INPUT Exhibit4 SercoActivities Project Management Support 11%, System Engineering/ 18% Facilities Management 51% Operationan Maintenance 20% Source:INPUT ThisResearchBullclinisissuedaspariofINPUT'SCustomerServicesProgrammeforthe informationservicesindustry. Ifyouhaveanyquestionsorcommentsonthisbulletin,pleasecallyourlocalINPUT organisationorPeterLinesatINPUT,17HillStreet,Mayfair,LondonWIX7FBEngland.(071)4939335,Fax(071)6290179 4 "1993byINPUT.Reproductionprohibited.