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A framework to analysis service business in industries

To meet the diverse needs among service businesses across different industries, SAP CRM Service provides a comprehensive solution. I would like to introduce framework in this blog, to easily identity the key features in the SAP CRM Service Management solution and align them with the business needs so as to ensure that both the line of business service management and the IT department are well aligned.  The overall goal of the solution is to increase the service revenue and at the same time reducing the costs.


Framework brief introduction


We can use two dimensions to think about diverse needs in service business as shown in the figure below.

1. Product factor: what the company sells – tangible goods, services, consumables goods, or even mixture?

2. Customer factor: whom the company can sell to – consumer or company, and second their business model, whether it’S related to B2C, B2B or both?

These two factors will determine the service business characteristics, key challenges and IT requirement.



Types of service business based on analysis framework


1) Technical support

If a company sells tangible goods to consumer, such as Lenovo dedicated to building engineered personal computers, the service business is most relevant for technical support. Typical industries include High Tech, Consumer Electronics, and Life Science.

 2) Preventive Maintenance and onsite service

If a company sells tangible goods to business, such as NetAPP, a leading vendor of innovative storage and data management solutions, service business is related to preventive maintenance and onsite service. Typical industries include Industrial Machinery & Components, Utilities, Aerospace and Defense. 

3) Managed service

If a company sells service or consumables product to business, such as AT&T delivering innovative solutions that allow customers to connect in new and better ways, managed service is commonly used. Primary industries consist of professional Services, telecom, and public Sector.

 4) Customer service

If a company sells service or consumables product to consumer, such as Coca-Cola Company, customer service is quite important. Typical industries include banking, insurance, and consumer Products.


Case study


To illustrate the usefulness of the model, I present a case study, which is about a fictional ABC company in medical device industry selling their products to hospital. Preventive maintenance and onsite service are core service processes and its business model is B2B selling tangible products.

1) Onsite service

Firstly, we can expect that ABC Company could have a service team for on-site service or they might outsource maintenance and repair service to some external service providers, especially when selling products to oversee. So the field service scenario, including service orders, service level agreements (SLA), resource planning, knowledge database articles, service confirmations, warranty management, channel service and mobile service, can be used in this scenario to improve the quality and productivity of customer service. They may also need to manage spare parts and thus considering the integration with an existing ERP system for logistics and finance. Or they could look out for  an extended spare parts management (SPM) embedded in the  supply chain to get maximum benefits from an integrated service platform, reduce the cost of spare parts inventory and warranty.

2) Customer support

Secondly, ABC Company probably already has a support team to preempt the inbound calls from customers for product inquiries, technical issues, complaint or repair request. As a result a call center integrated with business communication management (BCM) can be considered to implement service request, technical support, complaint handling etc. This would focus on increased customer satisfaction and retention. Self-service based on web channel can be introduced to reduce the cost of service operations.

3) Preventive Maintenance

Last but not least, ABC Company might plan to  increase the long-term revenue and the long-term margin from service offerings. That can be achieved by moving from a passive break-fix service process to a pro-active contract driven service offering. They start to package products and services for assets to predefined bundles and include them in long term service contracts. This moves ABC into the solution selling model including a solution catalog, service maintenance plans, sales and marketing activities for additional service (e.g. marketing campaign for the service offerings targeted to certain assets and installations).  

In the end, ABC Company runs an integrated service scenario across all interaction channels and that results in efficient, consistent, and superior delivery of customer service.  Service organizations are able to meet SLA while leveraging its interaction quality to drive new revenue.

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