Manufacturers Admit Challenges With Customer Expectations, Study Shows

May 12, 2020 • News • Noventum • Outcome based services • HSO • Servitization and Advanced Services • Customer Satisfaction and Expectations • EMEA

New research into the digital service trends of large manufacturers shows they are lacking the necessary IT infrastructures and are struggling to meet the expectations of customers in the servitization era.

The research ,Drivers for Digital Growth in Service, was carried out by Noventum in collaboration with HSO and Microsoft and canvassed product manufacturers and technical services companies via electronic surveys and personal interviews.

Struggles with Servitization

The study comes as the influence of servitization - the sale of an outcome, rather than a one-off purchase - has prompted a move away from traditional one-off large product investments to pay-per-use and subscription models bringing a new set of customer expectations.

Customers now expect their suppliers to assist in other business goals, such as increased production and even influencing innovation and operations. To help them achieve this, the report finds, firms must adopt new business models to deliver outcome-based, data-driven services for their clients.

However, while the study showed 80% of companies are planning to deliver or are currently delivering customer business related services, 40% admitted that their current IT framework was not robust enough to fully support these new business models.

The results suggest that firms need to adopt a digital services strategy, encompassing the entire organisation in order to deliver a successful and services-based business.

The research was conducted at the beginning of 2020 before the Covid-19 outbreak and in an introduction to the report Noventum acknowledged the impact the pandemic could have on service business growth, while suggesting it could prompt a positive change in focus leading to new service-led business models. “...for the companies who have been negatively impacted by Covid-19,” the statement said, “it will be vital to adopt the new ways of working that have been learnt during the crisis and to put in place growth strategies that will ensure the survival and sustainability of the business.”