The service sector, like the manufacturing sector, is an integral part of the modern economy, and its role will continue to increase significantly in the next five years. This article will look at the importance of having a holistic approach to integrating the resources needed to be competitive in this sector from technology to running our alternative scenarios to consider over the short as well as longer term.

Technology (IT, systems, machine learning, communications, etc.)
One of the major changes in the service sector over the next five years will be in the area of technology. Advances in artificial intelligence (AI) and machine learning are already revolutionizing many industries, and this trend is likely to accelerate. AI and machine learning will enable service providers to automate more processes, allowing them to be more efficient and reduce costs, just like SAAS (software as a service) became an innovative thing in 1999.  AI as a service is the next big thing to take companies to the next platform (AaaS).  This will become essential and commonplace, allowing companies to build and adapt AI-powered services quickly and cost-effectively. However, one can’t let this happen without oversight as there is a substantial possibility that this can get into the wrong hands with unforeseen consequences. Just think of some science fiction movies which have on occasion proved to be prophetic, think nuclear fusion and biotech (COVID-19) which have proliferated as they got into the wrong hands and somehow gotten out of the lab, respectively. 

The rise of robotics and autonomous systems will also have an impact throughout the service sector if you want to stay competitive. Autonomous robots will be used to automate certain tasks, such as delivery and customer service, freeing up staff to focus on higher-value activities. Robotics-as-a-Service (RaaS) platforms will help reduce the cost and complexity of deploying robotic systems, allowing companies to quickly and cost-effectively deploy autonomous robots to automate certain processes. Just look at the distribution center of early adapters like Amazon who have left traditional manual labor in the dust.

Workforce Skill Set
Another major change in the service sector over the next five years is likely to be in the area of workforce skill sets. As technology advances, the skills required by service providers will change. The skill set of the future service sector workforce will need to include an understanding of a much high level of working with AI, machine learning, robotics, and data science. Service providers will also need a higher-level and more educated workforce and resources to do the job. This is from computer literacy to having the smarts to build upon to be trained to use these technologies. Assembly line workers of today like the German-level workforce which has the equivalent of a level of a college education in technology. This is much greater than our trade school education to partnering with AI-powered services, autonomous robots, analytical platforms, 3-D manufacturing, etc.

In addition, service providers will need to develop a “human-centric” approach to customer service, focusing on providing a personalized experience for customers. Service providers will need to be able to understand customer needs and preferences, to customize and develop services that meet those needs.

Sales and Marketing
The service sector is likely to see significant changes in the area of sales and marketing over the next five years. Companies will need to shift their focus away from traditional marketing methods, such as print, television, and radio advertising, to digital marketing channels, such as social media, search engine optimization, and content marketing. They will also need to develop an effective strategy for capturing customer data and using it to develop targeted marketing campaigns.

Companies will also need to develop a multi-channel approach to sales and marketing, ensuring that their services are available on a variety of platforms, such as mobile, web, and in-store. The focus will be on providing customers with a seamless experience across all channels. The key is to do a cost-benefit analysis to see which channels are working best for you and where to best spend your marking dollars.

Operations and Back Office
This broadly includes human resources, accounting, financial reporting, and customer service sectors. These areas are likely to experience major shifts over the next five years. All of this information must be validated as it is critical to the running of the company and for management to make proper decisions. The focus here will be on efficiency, cost-effectiveness, data security, analysis of trends, and tracking everything from customer experience to company profitability. Companies will need to use more data, displayed properly to make decisions almost intuitive. Catering to the customer’s needs is crucial to their experience in dealing with the company. If they have to navigate the company’s complex system, they will not be customers for long. Corporations will also need to acquire and become proficient with the latest technology to automate processes and reduce costs. An integrated back-office system is critical to managing everything from customer data and metrics to corporate financials.  The company must be able to see its customer’s buying habits and anticipate changing needs and their level of satisfaction. Companies will also need to develop analytical platforms to provide insights into customer behavior and identify and implement areas of improvement.

Retention of Key Staff
The service sector is likely to face a challenge in retaining key staff over the next five years. As technology advances, demand for skilled workers is likely to increase, while the supply of skilled workers is likely to remain static and many of their employees will have to be retained for new tasks or be offloaded due to automation, AI, and the competition. Those who are key employees today may not be so in the future. But the concept of a “lean and mean” company will be a necessity to survive in a rapidly changing company. 

Alternative Scenarios
The changes outlined above will likely impact the service sector for the foreseeable future. And alternative scenarios must constantly be looked at and evaluated in a fast-paced world. If AI and automation move as expected, this could result in fewer but more capable employees and contingent advisors (gig jobs), and subject matter specialists. It is also possible that the service sector could be disrupted by unanticipated technologies or business models. For example, the emergence of blockchain technology could have a major impact on the sector, as could the importance of the new “gig economy” business models.

Conclusion

So, assume you are on a continuous and accelerating merry-go-round, and to stay on your horse requires never falling asleep in the saddle. To be or remain successful means being alert for opportunities and being an early adapter to change and never assuming that things are static, or that because you were number one before you will be that after.