Controlled costs, value-added analytics capabilities, and platform innovations: these are the three core purchase drivers that customers of business services firms have come to demand and expect. The challenge to business service companies looking to grow is to deliver seamlessly on all three.
Business service companies are employing several strategies to become better partners and offer the best solutions, preparing for future growth. To build and keep these relationships, these companies are connecting their evolving product and service portfolios and developing a more distinct, coherent brand presence that informs everything they offer and do, across all customer touchpoints.
In order to cultivate deeper relationships, companies are all striving to market their full-stack capabilities to customers. Industry players now have to transition from being specialized vendors to trusted partners in achieving business growth. By becoming a one-stop shop for customers, business services providers can solidify the relationships that are so central to their own businesses: it’s a growth-growth opportunity.
In a marketplace facing an unprecedented level of M&A, disruption from specialized smaller upstarts, and clients trying to maximize every dollar, business services providers have had to refocus and reprioritize.
Using data to prioritize business needs
Industry leaders such as IBM and Accenture continue to double down on predictive analytics (e.g., IBM’s Watson) that will bridge their respective portfolios and strengthen their overall platforms, forming a cohesive suite of products and services that attracts new and existing customers. Accenture invested 70 percent of its capital in digital, cloud, and security services in fiscal 2015, supported by recent acquisitions. The company’s M&A strategy is tailored to diverse customer segments: it acquired Agilex Technologies to enhance analytic, cloud, and mobility capabilities for US federal agencies; PacificLink to expand digital marketing and e-commerce capabilities in Greater China and the Asia Pacific region; and Cloud Sherpas to strengthen cloud services for enterprise clients.
Focusing on flexibility
Other players, such as Xerox, are refocusing investment in prioritized business units. Xerox’s decision to spin off its Business Processes Outsourcing (BPO) unit into a separate entity, Conduent, demonstrates the company’s responsiveness to evolving consumer needs as it refocuses resources on its two top capabilities: business services and document technology. With a renewed focus on the document technology side, Xerox continues to introduce new products tailored to the changing needs of both business professionals and everyday users.
Agility can start with a portfolio refresh, but it also must be embedded into the culture and the brand. IBM has injected new thinking into its culture by training 60,000 IBMers in agile methods and expanding its team of “professional designers.”
These approaches reflect the pressure that leaders industry-wide are feeling to expand margins while simultaneously investing in R&D and capabilities expansion.
Building a brand that stands out
As we look ahead, business services firms must embrace and leverage the opportunity to develop strategic clarity over their portfolios, offerings, and positioning in the marketplace.
IBM’s “Cognitive Business” campaign, replacing “Smarter Planet,” is designed to create a portfolio-wide connection. It also builds connections to the brand by shifting the focus from the world at large to the customer’s business—a requisite in this sector. “Cognitive” also hints at the thing that sets IBM apart in the new data economy: Watson, the technology that’s closing the gap between raw data and human understanding, and will differentiate IBM in the market as it grows under its own sub-brand.
Accenture has made great efforts to provide customers information and clarity on what the brand stands for, evident by the company making its brand values videos public. It’s also positioning itself as a tech-savvy company that, of course, will excel in the digital race, but will always put the human experience first. The Accenture Technology Vision 2016 summary states: “Instead, enterprises must focus on enabling people—consumers, employees, and ecosystem partners—to do more with technology.”
A brand’s legacy can keep it afloat, but in order to grow, even heritage brands need to rethink their strategies and propositions. Xerox has tried to reframe its core proposition around business engineering rather than document handling. The brand has retained a reputation as a strong competitor within the sector because of its heritage as an expert in business process and document management. At the same time, Xerox is also attempting to leverage innovative technology and service delivery excellence as standout characteristics in a crowded field.
The industry-wide rise in M&A and spin-offs indicates an increase in business services providers’ need to be more relevant to their customers in every way. For these brands, increased complexity and blurred lines between competencies have made differentiation more difficult to both achieve and sustain. In the Age of You, companies that will truly thrive in this space will be able to clearly articulate to customers exactly what they offer, why they are different, and, most importantly, how they will enhance their customers’ bottom line. In doing so, they will need to keep a keen eye on the experiences that connect their products, services, outlets, and channels. Diligent and ongoing attention to their brands will serve these servers well.