"Companies are being too short-sighted when it comes to digitalization"

"In the short term, companies are relatively well positioned for the digital changes in the service business, but in the long term there are major construction sites," says Roman Bauer, partner at H&Z Unternehmensberatung and expert in the field of service, summarizing the results of the live online survey at the Service Round Table, organized by H&H. In light of the digital transformation, 35 managers from C-level and service functions were asked about developments in the service business. Overall, an average of 30 percent of the service turnover of the companies surveyed is now based directly or indirectly on digital offerings.

Naturally, there are major differences depending on the sector. While one of the companies is already pursuing a completely digital business model, some others are still not generating any revenue from digital services. Nevertheless, the management level at almost all companies is behind the digitalization of the service business. This is confirmed by 79 percent of respondents. "The spirit seems willing, but the flesh is weak" could be recited in view of further results on the strength of companies in relevant success factors* of a digital transformation. After all, the biggest hurdles still include a lack of resources and the available budget.

Above all, however, the company structure is insufficiently geared towards digital changes. After the lack of resources, the survey participants even see this as the greatest weakness on their path to digitalization. In his presentation at the Service Round Table, Professor Guido Baltes, Scientific Director of the Institute for Strategic Innovation and Technology Management (IST) at HTWG Konstanz, emphasized just how serious this is.

"Digitalization is not a competitive advantage in the long term"

Although the pressure to digitalize the service business is increasing, Professor Guido Baltes is convinced that companies will not be able to differentiate themselves in the long term. In the short term, companies are differentiating themselves through digital service processes and offerings. In the medium term, however, this is far from enough in view of the general advance of digitalization. This is because digital competitors will catch up with "acquired advantages" faster than they are built up. "Digitalization in service is a hygiene requirement." And Roman Bauer adds: "Sooner or later, every company ends up at least partially in the digital model. " In order to maintain its lead, a company must constantly evolve. "Agile models, such as embedded entrepreneurial teams, are needed to counter new competitors who approach digital business models without ballast," continues Roman Bauer.

However, the digital changes in the service business are not only leading to new corporate structures, they are also reducing the number of service employees required. The managers surveyed estimate that their service team will almost halve in size over the next ten years. Automated processes and robots will take over many traditional service tasks in the future.

* Management commitment, customer access, know-how, IT/technology, suppliers/partnerships, mindset, sufficient budget, agile organization, resources