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Seven Critical Success Factors in the Shift to Services

Latest Executive Briefing on Critical Success Factors in the Shift to Services, by Veronica Martinez, Andy Neely, Florian Urmetzer, Neil Allison, Monica Lund, Dav Bisessar, Thomas Bucklar, Stewart Leinster-Evans, Graham Pennington and Daniel Smith

A new Executive Briefing from the Alliance, 'Seven Critical Success Factors in the Shift to Services’, sets out a roadmap for making the shift to services journey. It identifies the seven critical success factors (CSFs) in order to deliver services successfully and gives firms a set of key actions to do this. Critical success factors (CSFs) for any business are defined as the limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organisation. In other words, a critical success factor is a key factor or activity needed to ensure the success of a firm.

Seven Critical Success Factors in the Shift to Services

  1. Assess your market and internal readiness: making the shift to services means that all parties involved must be ready to change and understand the value of doing so.
  2. Create the right strategic and cultural context: a service business is different to a product business and needs a completely new mind-set to be instilled throughout the whole service ecosystem
  3. Build the structures and governance for services: firms need to make a clear commitment to services by creating properly empowered teams, structures, measurements and incentives.
  4. Get the resources ready for service innovation and delivery: short and long-term budgets need to acknowledge that services are very resource intensive and change over time.
  5. Proactively manage engagement and trust: services are co-created with customers who are active participants in the service journey.
  6. Develop and embed service processes: firms delivering services must experiment, adapt and learn to actively commercialise services. They need processes, which enable them to do that.
  7. Optimise services and communicate best practices: services rely on continuous innovation and so require a ‘best-practice’ mind-set.

The report works through these key factors and outlines how organisations need to use them in their implementation strategy. There is a logical progression to them and a relationship between them. The first thing you need to do is assess the readiness of both your external and internal environments. Only when you are confident that you, your delivery partners and your customers are all willing to embrace the changes that the shift to services demands can you create the strategic and cultural conditions in which successful services can be designed and delivered. Appropriate governance structures, resources, customer engagement activities and service processes are all critical to success and all need to be put in place so that they can run in parallel and in coordination with each other.

Each of the critical success factors has a defined set of rules, which will allow your company to embed these into your organisation. There is a strong relationship between the seven CSFs and you need to realise that to move from one to the other you need to complete the preceding one first particularly with the first few steps. You have to be diligent in setting up these steps and you need to be sure you are ready to progress to the next one before doing so. 

Finally, you need to establish a mechanism that communicates and embeds the good practices you have learnt and so strengthens and sustains your service strategy – and creates a culture of innovation and continuous improvement. But making a successful shift to services is about more than what goes on within your organisation. You also need your delivery partners and other stakeholders in the ecosystem to commit to working together to fulfil your service strategy.

The Seven Critical Success Factors in the Shift to Services Report was written by Veronica Martinez and Andy Neely, Cambridge Service Alliance; Neil Allison and Monica Lund, Pearson North America;  Dav Bisessar, IBM; Thomas Bucklar, Caterpillar; Stewart Leinster-Evans and Graham Pennington, BAE Systems; and Daniel Smith, Zoetis. 


Seven Critical Success Factors in the Shift to Services - 
Authors Podcast

Veronica Martinez, University of Cambridge, Andy Neely, University of Cambridge, Neil Allison, Pearson, Monica Lund, Pearson, Dav Bisessar, IBM, Stewart Leinster-Evans, BAE Systems, Graham Pennington, BAE Systems and Daniel Smith, Zoetis.

This key podcast hears from key partners and authors of this new Executive Briefing – ‘Seven Critical Success Factors in the Shift to Services’. In compiling this executive briefing we have collaborated with our industry partners on research that aims to help firm’s to move forward in the shift to services. The report aims to enables organisations to work together in ecosystems in order to help diversify their portfolios, and explore different service-oriented strategies. In this podcast each partners discusses a different success factor covered in the report. [more]

Seven Critical Success Factors in the Shift to Services - 
Dr Veronica Martinez

Dr Veronica Martinez, Cambridge Service Alliance 

In this podcast Veronica outlines the problems for organisations who are embarking on the shift to services journey or who are already on this journey. Veronica discusses how the research what completed, and the outcomes and development of the Seven Critical Success Factors. ‘Organisations are struggling to compete and to become leaders in their markets. Each one of the seven Critical Success Factors (CSFs), factors that drive success in the shift to services, has a specific action before moving to the next one. No other report or paper will tell you about these pointers or how to use them. If you are already on the journey to developing services, these factors tell you what things you are doing well and what you are missing out on, or those that may overlap in some way. It is very much a mapping tool.  We have had access to senior people who make strategy at top levels in their organisations in compiling our report, they have already been living and solving these problems, which gives our CSFs report an edge.’

Seven Critical Success Factors in the Shift to Services
Prof Andy Neely

Professor Andy Neely, Cambridge Service Alliance 

Andy Neely, Director of the Cambridge Service Alliance discusses the latest Executive Briefing Seven Critical Success Factors in the Shift to Services, which sets out a roadmap from start to finish of that shift to services journey. It identifies seven critical success factors (CSFs) in order to deliver services successfully and gives firms a set of key actions to do this. Senior Management teams will need to priorities and work quickly, but these seven tools can accelerate the commercialisation of their new focus on service activities but they have to be used appropriately and step by step. Prof Neely comments in the podcast, ‘Firms are thinking through how they can make the shift to services and how to reinvent themselves and make that culture change in their organisation. Firms need to be organisationally ready and they also need to be market ready so they need to address the key questions of culture and mind-set in their organisation. Understanding the readiness of the market and then creating the right culture are two critical building blocks. It is what companies are doing today to make sure they survive tomorrow.

Cambridge Service Alliance

Welcome to the Cambridge Service Alliance…

  • A unique global alliance between the University of Cambridge and some of the world’s leading businesses.

  • Help organisations to address the challenges they will face in the next three to five years, through rigorous research, practical tools, insights and education programmes.

  • Learn how other innovative organisations are developing new services through our events

  • Since its inception in 2010 industrial partners have included BAE Systems, Caterpillar, GEA, IBM, Pearson, Zoetis, CEMEX, HCLTech and Bouygues

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