Companies underestimate Service Management

While innovation in Service Management appears to contribute greatly towards the financial performance, a new Capgemini reveals that many major companies underestimate its importance.

The study entitled “The Evolution of Service Management”, released recently by Capgemini, shows that firms must no longer purely focus on product innovation, but rather give consideration at boardroom level to the strategic organisation of service processes.

The study demonstrates that there are two different types of companies: traditional players, concentrating on Printing and Document Handling (PDH) and more generic players, also active in other High Tech-categories besides PDH.

The study reveals that the most successful parties usually fall within the category of ‘generic players’, focusing on devising innovative service solutions while ‘traditional players’ primarily target innovation at product level.

The more generic companies no longer regard the service department as a cost item, but as a strategic business unit that has a direct impact on the revenues.

They sell services, of which the product forms part, instead of products that are used as a cover for a service.

This is essential at a time when clients have increasingly high expectations when it comes to services, and the service and the product are increasingly regarded as an inseparable whole.

The value added component of technological innovation as a separate entity is becoming less and less.

This study also reveals that the difference between peer best and peer worst examples in the industry can amount to billions of Euros in revenues.

Joost Bleize, Head of Service Management at Capgemini Netherlands,says Service Management is becoming more and more essential as a competitive tool.

“The financial impact of this corporate function is constantly increasing,” he says.

“Fortunately we are seeing that many businesses in the market are choosing to invest more energy in innovation; however it seems that the realisation of this innovation in terms of Service Management still forms a difficult challenge.”

“In this study, we provide insights and strategies with the aim of helping companies to boost their innovative power and implement Service Management in a way that is both competitive and profitable.”

In the study, Capgemini focuses on leading producers (with revenues of more than a billion Euros) of Printing Document Handling (PDH) solutions, however the situation encountered and the results of the study apply to the High Tech market as a whole, from telecom equipment manufacturers to electronics & semi-conductor vendors.

The study was carried out on the basis of analyses performed by Capgemini’s Strategic Business Research Group in India, as well as interviews with producers in the United States, Asia and Europe.

A total of 50 companies were included in the research that took place at the end of 2007.

If you want to receive the study report, or if you want to have more information on Service Management, please contact

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