Digital Transformation and Changes in Business Models for Service Industries
Authors: Sever Mune Moğol 
Published: March 2024

The digital transformation and digital technologies find ample application in service as well as in manufacturing. Advances in digitalization and digital technology adoption encourage service sectors to incorporate new digital technologies into their processes to increase efficiency and productivity. The trend towards up-to-datedness and remote control mechanisms increases service industries' awareness of digital technologies in the era of Industry 4.0 and Society 5.0. A transparent and instant management approach with real-time data becomes possible with digital innovation in service. In the digital ecosystem, personalization is more likely to be possible if the increasing diversity in demands for a particular product/service is disruptive. In these collaborative platforms, the prosumer is at the center of the business and acts as designer, customer and consumer. In this digital ecosystem, the consumer is involved in the design phase at the beginning of the process. A new business model is required due to the overall digitalization of the organization. After talking about the digital revolution and transformation, traditional tools for customer demand/relationship management, sales marketing and operations should be examined. The Internet of Things (IoTs), cloud computing, blockchain infrastructure, and business intelligence, are the basic components of digital transformation. This chapter mainly focuses on the digital transformation of the service industry, service innovations, service business platforms and service business model transformation using digital tools. All these digitalization efforts are made possible by innovation in business models. This new digital business model innovation is defined as a unique and significant change in the fundamental elements of the enterprise's business model and value chain architecture. BM analyzes and redesigns operations, content, structure and management to create value by taking advantage of business opportunities. Especially in an environment where organizations and operations, data and processes become open, the concepts of participation in processes and collaboration come to the fore. Sharing economies and platforms where everyone meets on common ground constitute today's new business models. Platform businesses are shared networks and interfaces that create a common structure in which flexibility in design can be achieved, fixed costs can be saved, and efficiency can be increased. Platforms are divided into two: internal and external, and internal platforms are defined as areas where cooperation is carried out within the business or with the business and suppliers for a specific purpose. The study revealed that the labor-intensive and competitive service sector could not avoid this trend. Within the scope of this section, the concept is intended to be concretized through platform works and sample applications. In summary, all this change has caused physical worlds to be moved to small screens and virtual worlds. No matter how perfect the resulting physical product is, it will always be incomplete unless it is supported by accurate and complete services. In today's cyber-physical environment, perfect service platforms will be able to meet the needs and produce real-time and creative solutions to customer demands. These solutions can be provided through innovative and smart technologies such as artificial intelligence and business intelligence. It can be stated with certainty that service businesses that invest in these technologies will stand out from their competitors.