Creating Value Through Customer Services - Conference

Summary of Industry Day Conference - Tuesday 6 October'Creating Value Through Customer Services'

At this year’s Cambridge Service Week conference we focused on the question of how to ensure your customers recognise the true value of the services you provide. Leading firms described their approach to delivering customer value through services.  

For a summary of the conference listen to this podcast recorded on the day, which includes all the speakers as well as Cambridge research staff and Prof Andy Neely.

SPEAKERS:

Rolls-Royce – Better services for a changing world 

Tom Palmer, Director of Services, Rolls-Royce plc 

• Review of Rolls-Royce’s service journey
• Explanation of how Rolls-Royce uses data and analytics to drive customer value
• Observations on the current service model and how it has to change

"90 per cent of our engines are now covered by some kind of long term fixed price contract. We are now looking at how the next generation of Total Care packages might look to improve the value to our customers and bring in new value propositions."It’s a very long life cycle business and our relationships with our customers are very deep and in many cases very trusting. Rolls-Royce has always been a partnering company with our customers’ interests truly at our heart. That is what we are focused on, truly adding value to our customers. Our whole vision is about being trusted to deliver excellence - we need to be trusted by our customers to act in their best interests.

"We have developed deep personal relationships and our people have grown up together and worked most of their working lives together, which is helping their business and its availability. Our joint interests are so heavily intertwined that these contracts are true partnerships.

"The customers are sophisticated operators and they are not interested in handing over all their data, or hype, they understand how value is created so we are focusing on the pointy end, where the value is really made for the airline. What data do you need for that, how much, what are its timeliness, and its analytics? We work backwards from the problem."

Tom Palmer, is Director of Services for Rolls-Royce’s Civil Large Engine business.  This business provides services for approximately 4,000 engines flying with over 200 airline customers around the globe. Previous roles at Rolls-Royce include Director of Trent 700 and Trent 500 and the strategic development of the Civil Aerospace Services Function.

ABB - Internet of things, services and people enabling next level services 

Christopher Ganz, Group Service R&D Manager, ABB

• Evolving ABB’s service business.
• The role of industrie 4.0 and connected devices
• Where next for ABB in its shift to services

"We call this the internet of services because it might be people from different organisations that are providing services to the end customer or it might be the customer himself; properly designed interactive services are the part that brings most value to the customer. We ensure they always get the right person on the call, or to visit their site because the experts who looked at the data in the cloud, have already agreed whose problem it was, and who has to take which part aside and install it on site.

"It is a time of change and I am excited about seeing this and shaping this, maybe others are scared because the outcome is not totally clear to everybody, but it is a journey that has started and we have to see where it is going to. 

"The customer value is very important. If you cannot explain to customers, the value of what they are doing they will never understand that it makes sense to give you data or sign a service contract or do business with you. In the end it is always collaboration between us, the partners and the customer. We want everybody to see that we are all part of the system and happy to help."

Dr Christopher Ganz is responsible in ABB to increase service awareness in research and development. After studying electrical engineering at ETH in Zurich and a PhD degree in control, he held various R&D positions in ABB’s power plant control unit. Later he was responsible for the corporate research program in “Control & Optimization”. In his current role located at ABB’s headquarters in Zurich, Christopher Ganz is leading cross-division projects in the area of service technologies, which includes remote services, and IoT initiatives.

Zoetis - Creating value and an enriched customer experience with services in the pharmaceutical animal health industry 

Alejandro Bernal, EVP and Group President Strategy, Commercial and Business Development, Zoetis Inc. 

• Setting up a new business (spinning out from Pfizer)
• The crucial role of services in building customer relationships
• The internet of animal health things

"We are committed to having a very close communication with our customers because of our scale.  The relationship we have with customer is our number one objective, we want  to understand their needs and find out how we can help them do what they do and how we can help them grow their business so that their business or their customers business grows too.

"We believe that our commitment to the use of our medicines and the direct support and services we offer to our customers can produce more quality food in a more efficient way, because they are raising healthy animals, and they are also enjoying healthier pets for longer periods.  By detecting diseases sooner and treating them effectively we are also contributing to animal welfare.

"We clearly are very committed and very passionate about our investment in continuing to develop and support our medicines which will support animal health in livestock and also in companion animals. Through our field force and our relationships with our customers, we can understand how to make that a journey where everyday animals will have access to the best medicines and we will support our customers in delivering those medicines to them.

"The increased speed of the development of technology is something that as a company we are realising now. This is an important component of the product that we offer our customers because it compliments extremely well the value that we bring to them through the medicines that we develop to prevent and treat disease."

Alejandro Bernal, Alejandro Bernal was recently appointed Group President, Strategy, Commercial and Business Development. Prior to this role, he served as Area president of the Europe, Africa and Middle East region at Zoetis (formerly Pfizer Animal Health). In this role, he oversaw the company’s presence in a major portion of the world.  Previously Alejandro was area president for this region in the Pfizer Animal Health organization, a position he held since 2011.

Dr Florian Urmetzer, Dr Veronica Martinez, Dr Mohamed Zaki, all senior researchers from the Cambridge Service Alliance said:

Mohamed:

"There are cross-cutting themes around how the data will enable the shift to services, and you can see that in Rolls-Royce, ABB, and in Zoetis. From machines to animals whatever their business they are trying to use the data from the IoT to understand behaviour patterns to help them or their customers and in turn their customers, to commercialise this and get some revenue from it too.  There is true value, and benefits to the customers when they try to analyse this data. All their solutions are helping them to understand their customers and their customer’s customers’ better."

Florian:

"We are on the journey to solving these complex journeys. End users need to be satisfied so that companies need to ensure that they get greater return on investment and wealth for the companies involved."

Veronica:

"We need to look at how customers see their journey, we know it often hasn’t been easy but there are models and techniques that tell you how and where to go and that is why we are here at the CSA."

Professor Andy Neely, Director Cambridge Service Alliance, and Head of the IfM:

"Rolls-Royce is fascinating.  They are held up as the premier example of an organisation that has innovated its business model and is offering services. The fact they have got over 90 per cent of customers or engines who are on its Total Care package, is an interesting statistic. They guaranteed the availability of the engine at a fixed cost per flying hour and they were the first in the market to do it and they often describe their Total Care package, as both an insurance and service policy. They have thought about breakdowns and insurance very well with what is expensive machinery.

"The theme of the ABB presentation was the IoT, but they argued, that you need IoT, People and Services. People play a part in systems and you have to think about how you create value from the entire suite of things.

"Zoetis, set out a very unifying theme and that was that organisations help their customers to do great things, or their customer’s customers to do great things. This is a theme that we hear in lots of different organisations thinking about services.   Organisations do get focused too narrowly they think about their immediate customer but if you need  to think about the customers customer, and ask how you make them more effective and efficient, and better able to do the job they want to. If you are the organisation that helps your customer help their customer do a better job you become the preferred partner for your customer which is the organisation you are going to work most closely with. So this is really at the heart of services."

Professor Andy Neely is Founding Director of the Cambridge Service Alliance (CSA) and the Royal Academy of Engineering Professor of Complex Services. From 1 October 2015 he will take on the role of Head of the Institute for Manufacturing, whilst still retaining his role at the CSA. Andy is widely recognized for his work on the servitization of manufacturing, as well as his work on performance measurement and management. 

Roundtables and Panels

The day also included Round Table Discussions,which focused on 'Applying the Lessons to your Business'. This was followed by a Panel Session, which had representatives from partner companies.

Posters

Alliance Researchers also presented their current research to the attendees - Posters from the event can be downloaded. [posters]