Digital technology is revolutionizing the provision of services. Consider the following scenario: A Berlin resident we’ll call Paul has recently moved to a new apartment in the city. To initiate phone and internet service, he plugs his router into a wall outlet. Five minutes later, he receives a call from his service provider. An agent we’ll call Anna asks Paul to confirm that he has moved. She reads aloud the new address and Paul confirms that the information is correct. Anna tells Paul that she has updated his account information and arranged for the same-day delivery of a new, preconfigured router that will allow Paul to benefit from the higher-speed service available at his new address. Anna also offers, for a small extra charge, to update Paul’s address in the account records of his bank. Paul accepts the offer to avoid the hassle of updating the information himself. Anna then takes the opportunity to recommend that Paul upgrade to a data plan that better fits his usage patterns. Sensing that Paul is reluctant, she offers a free trial, which he accepts. Throughout the brief conversation, Anna speaks to Paul in English, because she knows it is his preferred language.
Anna, however, is not a person but a computer program that acts as a virtual call center agent. The program understands natural language and the meaning that a customer wants to convey, and it can sense and react to the customer’s emotions. It is able to respond fluently in more than 30 languages. Like a human worker, Anna learns to solve problems and applies the insights it gains to define the best course of action.
Much of the technology necessary to turn that vision of providing services into reality already exists. However, few companies in service industries have reached such an advanced level, which we call Service 4.0. (See “The Evolution of Service Provision.”) Service 4.0 holds great promise for enabling service providers to respond to the challenges of increasing cost pressure, evolving customer behaviors, and an unstable competitive environment. It represents a significant change in performance, affecting how companies both offer and deliver services. Advances in technology allow companies to offer proactive and truly customized services and to deliver them through multiple channels and shared, open infrastructures.