 From Boston, Massachusetts, it's theCUBE. Covering LiveWorks 18, brought to you by PTC. Welcome back to Boston, everybody. This is theCUBE, the leader in live tech coverage. And we are here at day one of the PTC LiveWorks conference, IOT, Blockchain, AI all coming together in a confluence of innovation. I'm Dave Vellante with my co-host Stu Miniman. Wolfgang Ulaga is here. He's the AT&T professor of services leadership and co-executive director, the Center for Services Leadership at Arizona State University, Wolfgang. Welcome to theCUBE, thank you so much for coming on. Thank you. So services leadership, what should we know? Where do we start this conversation around services leadership? Yeah, so the center of services leadership is a center that has been created 30 years ago around a simple idea and that is putting services front and center of everything a company does. So this is all about service science, service business, service operations, people and culture. When you touch service, you immediately see that you have to be 360 in your approach. You have to look at all the aspects. You have to look at structures of people. You have to look at operations with a service-centric mindset. I mean, it sounds so obvious. Anytime we experience as consumers great service, we maybe fall in love with the company, we're loyal, we tell everybody, but so often services fall down. I mean, it seems obvious. Why is it just not implemented in so many organizations? Yeah, one of the problems is that companies tend to look at services as an afterthought. Think about the word after-sales service, which in my mind is already very telling about how it's from a cultural perspective perceived. It's something that you do after the sale has been done. And so that's why oftentimes there is the risk that it falls back, it slips from the priority list and you do it once you have done all the other things, but in reality, businesses are there to serve customers and so service should be the center of what the company does, not at the periphery. Or even an embedded component of what the company, I mean, I think of, well, is Amazon a good example of a company that has embraced that? Or is Netflix maybe even a better example? I don't even know what the service department looks like at Netflix, it's just theirs. Is that how we should envision modern-day service? Yeah, so it excites me at the conference at LifeWorks. We see so many companies talking about technology and changes and you really can sense and see how all of them are thinking about how can they actually grow the business from historic activities into new data-enabled activities. But the interesting challenge for many firms is that this is going to be also a journey of learning how to service customers through data analytics. So data-enabled services is going to be a huge issue in the next coming years. All right, so Wolfgang, you're speaking here at the conference, I believe you also wrote a book about advanced services for those that aren't familiar with the term, maybe walk us through a little bit about what that is. Yeah, so I earlier this morning presented the book Service Strategy in Action, which is a very managerial book that we wrote over 10 years of experience of doing studies, working with companies on this journey from a product-centric company that wants to go into a service and solution-centric world and business. And today we see many of the companies picking up the pace, going into that direction, and I would say that with data analytics, this is going to be an even more important phenomenon for the next years to come. So a lot of companies struggle with service as well because they don't see it as a scale component of their business, harder to scale services than it is the scale software, for example. So in thinking about embedding services into your core business, how do you deal as an organization with the scale problem? Is it a false problem, and how are organizations dealing with that? No, you're absolutely right. Many companies know and learn when they are small and they control operations. It's easy to actually have your eyes on service excellence. And once you scale up, you run into this issue of how do you maintain service quality? How do you make sure that each and every time to replicate into different regions, into different territories, into different operations that you keep that quality up and running? So one way to do it is to create a service culture among the people because one way to control that quality level is to push responsibility as low as possible down so that each and every front-line employee knows what he or she has to do, can't take action if something goes wrong and can maintain that service quality at the level we want. And that's where sometimes you see challenges and issues popping up. What role do you see machines playing? I mean, you're seeing a lot of things like chatbots or voice response, what role will machines play in the services of the future? Yeah, I think it's a fascinating movement that is now put in place where machine, artificial intelligence is the year to actually enhance value being created for customers. So sometimes you hear this as a threat or as a danger, but I would rather see it as an opportunity to raise levels of service qualities, have the symbiosis between human and machine to actually provide better outstanding service for customers. Could you share some examples of successes there or things that you've sort of studied or researched? Yeah, so for example, if I take a consumer marketing example, in Europe I worked with a company which is Nespresso, they do these coffee machines and capsules. And in their boutique, they don't call it a store by the way, they call it a boutique, they have injected a lot of new technology into helping customers to have different touchpoints get served the way they want to at the time they want to, how they want to. So this multi-channel, multi-experience for customers is actually a growing activity. And when you look at from a consumer perspective, I get more opportunities, I get more choices. I can pick and choose when, where and how I want to be served. Similar example is Procter and Gamble here in the United States. P&G has recently rolled out a new service business, taking a brand tight and creating tight dry cleaners here in America. It's a fascinating example. And they use technology like smart phone apps on a smart phone to give the customer a much better experience. I think there's many of these examples we'll see in the future. Yeah, so when we talk about IoT, one of the things that caught our ear in the keynote this morning is it's going to take 20 to 25 partners putting together this solution. Not only is there integration of software, but one of the big challenges there I think is how do you set up services and transform services to be able to live in this multi-vendor environment? I wonder if you could comment on that. I agree, I agree. And you know what I see is, which makes me as a business professor very excited and that is of course there's technology, of course there's hardware and software, but one of the biggest challenges will be the business challenges. How do you implement all of these offers? How do you roll it out? One of my talk topics today where how do you commercialize it? How do you actually make money with it? How do you get paid for it? One of my research areas is what we call free to fee. How do you get the R out of the free and make customers pay for value you create? And what I find, especially in the digital services space, there's so much value being created, but not every company is able to capture the value, getting adequately paid for the value. This is a huge challenge. So in some I would say it's really an issue about the business challenges as much as it's a technological issue or technical challenge. Yeah, I think about IoT. So many of the different transfer protocols, it's open source, that free to fee and any advice you can give to people out there as to how they capture that value and capture revenue? Yeah, so I think you have to be super careful where the commoditization will kick in and if over time, something that was a differentiator yesterday with the open sources and everything will become not so much differentiator tomorrow. So where is your competitive edge? How do you stand out from competition? I know these are very classic questions, but you know what? In the IoT and digital space, they resurface, they come back, and having the right answers on these questions will make the difference between you and competition. Last question we got to go. The transport self-service, is that a good thing, a bad thing, depends thing? Yeah, I think everything that allows customers to have choices. You know, customers today want to be in charge. They want to be in control. They in fact want all of it. They want to have service when they want it, but they want to have a non-self-service option if they feel like. So I think the trick is to know how can I be nimble and give customers all of these choices so that they are in charge and pick and choose. Wolfgang, thanks so much for coming to CUBE. It's a pleasure having you. Appreciate it, thank you very much. Good to see you. All right, keep it right there, everybody. Stu and I will be back with our next guest right after this short break. We're here at the PTC Live Work Show. You're watching theCUBE.