Let's not forget that servitization (service-based selling) is a transformation journey - it involves companies (often manufacturing companies) developing the capabilities they need to provide services and solutions that supplement or replace their traditional product offerings.
While there are obvious economic benefits to the manufacturer in the form of longer term annuity sales, increasingly customers want to buy complete solutions and not just products. For the manufacturer, these solutions must solve business problems and in turn create additional business value often through an eco-system of new partnerships.
To date, many of the servitization success stories have been centred around global manufacturing giants such as Rolls Royce, P&G, GE, and Hitachi, where Asset Monitoring, Production Monitoring, Fleet Monitoring, Connected Worker etc. are used successfully to support additional product offerings.
So, is it feasible that smaller SME organisations can leverage servitization?
Simply put, Yes, they can but it requires a change in the organisation's mindset, the transformation of business processes combined with greater systems integration to provide customers with greater insight and service capability.
A connected enterprise supported by IoT solutions can help transform customer maintenance from Break Fix or Scheduled to Preventative, Predictive or Prescriptive. Static Analytics become Real-Time and Centralised Product Service can be supplemented with customers performing Self-Service or Self-Guided Service.
Will 65% of manufacturers globally be using a service-based selling model as opposed to product-based by 2020? only time will tell.
Industry surveys have reported as much as 65% of manufacturers globally will be using a service-based selling model as opposed to product-based by 2020.