Service sector companies must cut their costs by 30% during
the next five years just to remain competitive, analyst firm
Gartner has warned.
The cuts must go hand in hand with improved customer satisfaction
and retention, which is emerging as the sole differentiator between
organisations providing services.
Deregulation, high customer churn, increasing commoditisation of
services, economic slowdown and consequent budget cuts are all
creating a critical situation in the service sector, Gartner said.
The failure of sales and marketing automation to deliver on its
promise of business improvement to service organisations has also
left its mark.
Alexa Bona, research director at Gartner, said last week, "The
service industry has reached a critical juncture but companies
could remain competitive through integrated field service process
automation and service management processes. The emerging market
will be to this decade what customer relationship management was to
the last.
"Companies neglecting this area will find themselves in an
increasingly commoditised situation where they will fail to
differentiate," he said.
Field service process automation and service management processes
embrace a whole raft of technologies including workforce
scheduling, supply chain management and financial planning. As yet,
users are unlikely to find one supplier offering more than 30% of a
total solution, said Bona.
David Roberts, chief executive of the Corporate IT Forum Tif, said
companies should carefully evaluate how emerging software will
support Gartner's predictions. "What cost and effort is needed to
make these savings, if indeed such savings are required? I would be
very cautious about the financial and resource commitments
necessary to make such changes," he said.