Tuesday, June 22, 2004

Services Industry facing Industrial Revolution

According to Uday Karmarkar in the HBR of June 2004, the services industry is facing a change process resembling the industrial revolution. The industrialization of services is here, and outsourcing and offshoring are only part of this revolution. Automation, customer self-service, and global competition have been added to the mix, presenting a threat and a significant opportunity for all service companies. The churn, restructuring, and transformation of services will continue—and even accelerate—for the foreseeable future. This will mean a different landscape for companies, managers, and workers. In the end, the survivors of the service revolution will be those who understand the opportunities and rework their strategies and reorganize their processes, and people for the challenge ahead. The alternative is disaster, as was proven by industrial companies not acting in a timely way upon the industrial revolution.


Blogger Strategy on the Internet. said...

These observations were off course made three years ago, but nonetheless I would discard the argument in this the year 2007. I do not believe we have witnessed a "revolution" - or are about to any time soon - regarding a globalized market for services. Having researched the subject of IT outsourcing, I can only conclude that there is a long way to go before it will become as common as a "revolution" of these services would indicate. I suggest two reason for this. 1. Trust 2.Culturale differences on the local markets.

The two are off course strongly related. The client outsourcing his project, of for example web design, to India will ask himself a lot of questions. How do I communicate my wishes for design to people sitting 5000 miles away? Can I trust the people in charge? Who do I talk to if there are problems along the way (you can't exactly show up in the outsoucing partners offices in person with your demands..). And the list of questions concerning trust and cultural differences could go on. Until this gab is closed I belive that no such revolution will take place.

Strategy on the Internet. An in depth analysis and a must read for every Internet entrepreneur and online business manager

6:01 PM  

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