ARCHIVE FOR THE ‘digitalisation’ CATEGORY

FieldAware’s Marc Tatarsky outlines three key areas of focus service organisations should be aware of when approaching digitalisation...

Frost & Sullivan will host an interactive Growth Innovation and Leadership (GIL) briefing highlighting creative destruction and expansion of traditional business models.

Frost & Sullivan's Industrial team will host a live, complimentary GIL briefing, “The Paradigm of Digital Industries and Growth Opportunities - Creative Destruction and Expansion of Traditional Business Models” on Wednesday, January 30, 2019, at 8:00 AM EST (1 PM GMT). The interactive briefing will be hosted by Ram Ramasamy, Industry Director, Automation and IIoT at Frost & Sullivan. The briefing will help to identify the best path forward through digital chaos and avoid common pitfalls that many in the industry have experienced.

For more information and to register for the webinar, please visit: http://frost.ly/2zt

“Ageing workforce and rising complexity in technologies is driving a widening consumption gap between data extraction and value-creation. This is driving customers to adopt smart digital offerings that will augment the available workforce and drive more from less,” said Ramasamy. “Further, as customers focus on core activities – we predict the emergence of industrial subscription economy.  A case in point: Customers will shed ownership of assets and shift to asset subscribership.”

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John Hunt outlines why when it comes to digitalisation, the focus should be on the end goals, not the technology...

There is a common thread being pulled by executive boards across the globe at the moment both in the field service sector and far beyond.

That is, of course, digitalisation.

In my role here at Astea, it’s a topic that our customers and new prospects are keen to talk to us about – almost every company I’ve spoken to in the last 12 months has broached it in one form or another.

However, there is a fundamental point I believe is often being overlooked by companies as they dive head first into weaving the digitalisation thread into their strategy – that is that digitalisation itself should be seen as an on-going process continuously woven in your field service tapestry rather than a one-time project, or a mere stitch in time.

 

An opportunity to redefine workflows

To start, let’s look at what digitalisation shouldn’t be.

Digitalisation shouldn’t be simply taking all of the previous steps your field service engineers used to undertake manually with good old pen and paper and dumping them onto a mobile device. Digitalising their workflow is an opportunity to re-evaluate some of these processes, re-order some things, maybe even remove others entirely all in the spirit of making your customer ambassadors happier and more efficient and effective. That happiness, efficiency, and effectiveness translates into better top and bottom line performance and most importantly, happier and more loyal customers.

 

"Those companies that get the most success from the implementation of a Field Service Management (FSM) solution are those who bring a selection of their engineers into the implementation process..."

 

Invariably, those companies that get the most success from an implementation of a Field Service Management (FSM) solution are those who bring a selection of their engineers into the implementation process. Just like product marketers use focus groups of prospective customers to fine-tune their product offering to maximise demand, so should you leverage a similar approach with your customer ambassadors, also known as the engineers. For example, by speaking with your engineers to understand what elements of your FSM system’s mobile app they use the most frequently, you can ensure that access to the relevant parts of the solution need are easily surfaced within the app.

The same of course also goes for your scheduling solution – digitalisation should be an opportunity to put the information your team needs at their fingertips, quickly and seamlessly to improve both service triage and first-time-fix rates. So who better to ask what information should be where than the folks on the front line that need access to such information each and every day? The happiness through efficiency and effectiveness you will weave throughout the services organisation will pay big dividends not only in the traditional operational sense but also in employee retention and the all-important increased customer loyalty.

 

A journey of continuous improvement.

The concept of continuous improvement is one that many field service professionals are fully aware of, yet all too often it doesn’t get factored into discussions around digitalisation.

Facebook is famously always in ‘beta’ when it comes to its development, and whilst I wouldn’t recommend such a fluid approach to something as mission-critical as field service operations, digitalisation certainly allows us the opportunity to tweak things here and there to find those sometimes hidden incremental improvements that can yield seemingly small efficiencies that stack up hugely in the overall picture.

For example, I recall speaking with one service director earlier this year who explained to me that by implementing a simple keystroke study of his dispatch staff across 3 months they were able to identify some simple yet effective changes to the menu structure of their system which brought some frequently used options to the front of the solution when they were previously tucked away behind a couple of sub-menus.

On an individual basis these changes sped up the dispatcher’s role by just a few seconds each time. However, the overall net benefit to the service organisation was millions of dollars per year as those seconds began to add up across the entire workforce just like a snowball accumulating more and more snow as it rolls down the mountain.

Digitalisation allows us to not only make these changes quickly and easily across a large user base but also to understand how, why and where these changes should be made.

 

Build processes today with an eye on tomorrow.

One final piece of advice I would give to companies embarking on their own digitalisation journey is remember you don’t always need to boil the ocean; digitalisation should be an iterative process.

For example, IoT is the hot topic in field service right now and rightly so as it is set to play a huge role in the future of service delivery. Yet, for many companies a full IoT rollout is cost prohibitive and requires a gargantuan feat of logistical planning.

 

"I’d suggest you don’t even need one asset connected before you start building in the processes of identifying key data you wish to collect – what is to stop your engineers noting certain key data points when performing maintenance?"

 

However, do you need to have every asset in your install base connected before you can start pulling data for analysis to dig out some key trends and insights that could be of value to your organisation and perhaps even more importantly to your customers? Of course not!

In fact, I’d suggest you don’t even need one asset connected before you start building in the processes of identifying key data you wish to collect – what is to stop your engineers noting certain key data points when performing maintenance? You can build the processes and collect the data that would form the backbone of a digitalisation strategy before a single asset is connected, and then introduce automation for these new processes across a much more manageable timeframe.

In doing so you will have already begun to think beyond the realms of what is possible today and begun to consider what can we build now that will improve our service delivery tomorrow.

And this at its heart is what good digitalisation strategy should be all about. There are already some masterpiece tapestries with shiny digitalisation threads prominently featured in the field service world today reaping big rewards with their own teams and customers; these will continue to grow and outpace the industry. The best time to have begun your work of art was yesterday. The second best time is today, so gather your thread and your team to design it and start weaving!

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John Hunt, is Managing Director, EMEA, Astea, 

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You know the feeling. Whether it’s a patch of water by your washing machine, or an alert from a failing substation, it’s that sinking certainty that something’s wrong and that you need an expert to fix it. From that moment, everything depends on what happens when you make that first call, or raise the ticket.

On the surface, the whole concept of customer service comes down to that feeling.

Do you want customers to experience a twinge of anxiety and annoyance when they contemplate contacting you? Or just a passing moment of irritation about the problem itself, because they know it will be easy to get it resolved quickly?

In this article, we’ll look at how consumer-facing and industrial organisations can use technology to make service a positive, brand-enhancing experience, that builds customer loyalty, reduces cost and creates profitable extra revenue.

We’ll also explore the idea of servitization, and the fact that, these days, the service is the product. Customers are buying outcomes, not products, and it’s great for your bottom line.

 

THE SINGLE VIEW: IT’S GETTING PERSONAL

Much is written about the difficulty of getting a single view of the customer, when they can get in touch through your website, your contact centre, your twitter feed and so many other channels.

It matters because your customers always have a single view of your organisation.

No matter how they connect, and no matter how the experience looks and feels, customers form an instant judgement of what your organisation stands for as soon as they make contact.

That one-in-a-million moment is your first and best chance to win their hearts and minds or, at least, calm their anxieties. An easy, personalised and effective experience sows a seed of loyalty that can blossom into revenue when they next come to make a purchasing decision.

You may have thousands or even millions of customers, but at any moment the only one that matters is the one entering a ticket on your service portal, or calling your service team.

 

SERVICE: THE NEW MINDSET

This single view across multiple channels is one of the primary drivers of digital transformation. Organisations are using technology to close the gaps between themselves and their customers.

Ideas around ‘customer focus’ have been around for decades, but there is a renewed momentum behind them now that customers have such high expectations and wield so much immediate power.

Online services such as Amazon and Uber have created simple, rewarding service experiences that customers now expect from almost every organisation, while a single comment, positive or negative, can be amplified in moments across multiple social media channels.

 

"Getting closer to customers requires more than a digital transformation. It calls for a change of culture across the organisation and a deeper understanding of the entire customer journey..."

 

But getting closer to customers requires more than a digital transformation. It calls for a change of culture across the organisation and a deeper understanding of the entire customer journey.

If your structure and processes do not reflect a customer-centric strategy, then you will struggle to deliver the value that you promise.

Any investment in building a customer relationship can be compromised in a moment by a call that is not answered quickly, or a technician who arrives late with the wrong equipment.

In this customer-centric competitive environment, service has become a defining differentiator, creating new opportunities for profitable revenue. Products are increasingly commoditised, with little to choose between them, so it’s the service that comes with them that can be the deciding factor when customers buy.

In some instances, this servitization transcends the product, so that customers pay only for the benefits, rather than the product itself. The operators of Amsterdam Schiphol airport, for example, pay for a guaranteed level of illumination, rather than investing in lighting systems. Philips and their project partners Cofely provide lighting as a service, retaining ownership of the products themselves.

The Schiphol example also highlights the fact that this is not just an issue for consumer-facing organisations. Service is equally critical in business-to-business markets, where failures of critical assets can compromise service level agreements.

This may lead to financial penalties and, worse still, reputational damage that may ultimately lose the contract altogether.

 

JOINING UP SERVICE

Turning service into a decisive differentiator relies on an end-to-end integration of every aspect of service delivery. Data needs to move freely from the customer endpoint – whether it’s a smartphone app, a chatbot, or any channel – to the back office systems that log the service delivery process.

Artificial intelligence is playing a big part in service optimisation now, with the internet of things helping to automate many routine processes. A sensor on a pump at risk of failure can automatically raise a ticket that schedules a maintenance job and checks the inventory for the right parts. The engineer can arrive on site with everything needed to complete the job in one visit, with minimal need for human intervention in the process.

Customers also want more control, with AI enabling self-service apps and web portals.

Rather than joining a call queue, customers can raise their own tickets and track their progress through to the moment the technician arrives. This also relieves some of the pressure on support center agents, who spend less time on routine calls and more time on more complex cases, which again contributes to great customer experiences.

 

FIND OUT MORE

IFS is a global leader in field service and contact centre technologies. We advise consumer and industrial organisations on strategy, change management and the implementation of our solutions for a complete, connected service delivery capability.

The modular, open architecture of our solutions allows you to introduce services as you need them, and to integrate them easily with industry-standard applications such as Oracle and SAP. We’ll help you make service a rich source of revenue and growth while boosting efficiency, increasing productivity and reducing costs.

Visit https://www.ifsworld.com/uk/news-and-events/one-in-a-million/

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Samir Gulati outlines four key technologies that are forming the bedrock for twenty-first century field service...

Twenty-first-century technological advancement has transformed how businesses everywhere communicate and interact with their customers.

Gone are the days of the occasional customer service call. Mobile technology has forever changed how people connect with product and service providers.

Field-service businesses that have yet to embrace digital customer engagement methods and tools must work quickly to do so. Modern consumers don’t like losing whole days waiting for calls from service personnel. They expect field service companies to use the latest technology to streamline the customer experience, create visibility into appointments and reduce hassle.

But which technological innovations should field service providers focus on? Here are some of the key technological tools gaining steam among the customers of the connected age.

 

Customer portals

Because of the pervasiveness of mobile technology, customer portals are everywhere.

Although the quality of these web-based assets varies from business to business, there are a couple essential components that creators of customer portals will always include:

• Information-rich, personalized dashboards allow users to view critical service data.
• Payment and account management give customers transparency into their past service requests and a place to pay for services rendered.

With tools like these, customers can serve themselves, which 67 percent prefer over speaking directly with a customer service representative. That said, direct communication tools such as instant messaging are still valuable, especially if they connect a customer with their personal technician or central dispatch.

These features not only meet the high standards of connected customers. They also simplify field service operations and reduce the likelihood of miscommunication between the provider and the customer.

 

Internet of things:

The internet of things is perhaps the most powerful innovation transforming business-to-consumer interaction today. At the moment, more than 11 billion IoT assets are active worldwide. By 2020, that figure is expected to jump to around 20.4 billion, a good number of which will likely be part of connected field-service operations.

In the field-service industry, asset-based deployments are common. Sensors embedded in equipment or appliances leverage internet connectivity to notify owners or even field-service providers when maintenance may be required, accelerating the repair process. Technician facing IoT workflows are also common and use geolocation to track service teams and route them to customers in need.

 

 

Smart home technology:

Even though web-enabled smart home technologies have received a lot of buzz in recent years, relatively few homeowners have adopted such solutions: In 2017, only 10 percent of families across the had any connected home solutions.

But smart home adoption isn’t unlikely to remain this low for long. Consumers are beginning to understand how much time and money smart home tech can save.

Field-service companies in the utility sector are catching on to the building momentum behind these innovative hardware and software solutions. Smart thermostats, for example, give customers greater visibility into—and control over—their electricity and gas usage. They also give technicians a better way to leverage data in order to provide personalised service and communicate effectively with the customer and the manufacturer.

 

Augmented reality:

Reality, augmented by real-time data, delivers benefits to connected customers by giving their technicians all the resources they need to perform perfect maintenance.

Field-service companies of all sizes are leveraging these tools to revolutionise on-site operations. Many are equipping technicians with augmented reality headsets that allow them to view updated product operating instructions or best practices while performing maintenance or repairs. Others are using these tools in training exercises so new technicians can ramp up quickly.

 

Summary: Embracing Innovation:

Field-service providers without these technologies may still be tempted to hold off on adoption. Perhaps they find these solutions too expensive or too complicated to deploy at the moment. It’s up to the decision-makers at these companies to decide what’s viable and what isn’t.

But these leaders should not underestimate the power of creating a bold new strategy for technology. It can lay the groundwork for excellent service effective operations in the age of the connected customer. As technology moves forward, so do consumers.

Field-service enterprises would be wise to recognize this reality and put into place up-to-date hardware and software that meets the needs of those driving the modern marketplace.

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Samir Gulati, is Chief Marketing Officer, ServicePower 

 

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Nick Frank, Si2 Partners and Harald Wasserman explore the growing conversation around digital servitization as they attempt to break down the whole challenge around digitalisation into smaller more practical actions which leaders can take to make themselves more competitive...

The increased accessibility of digital technologies is accelerating the shift from product to service led growth strategies.

The problem is that many leaders are confused by the jargon and unclear how to leverage these opportunities Intuitively they know they must do something or potentially face disruption, as they see the industrial world shifting in 3 major ways:

1. The growing awareness of the importance of data and the accessibility of powerful analytics technology means that most business leaders recognise the value of data. GDPR is an excellent example of this awareness at a legislative level
2. The Industrial Internet of Things has transformed how we can move data around the world
3. That the role of services in industrial business is being increasingly perceived as strategic rather than tactical, as companies want to capture more value and monetise their data through Service-led business models

Successful companies starting along this ‘Digital Servitisation’ route, typically start their journey with the following three basic steps:

1. Discovery: opening up their eyes to the possibilities
2. Solutioning: developing and piloting tangible ideas
3. Business Plan: to fund the scale up and the often associated organisation transformation

Discovery:

Understanding the potential impact of these trends on your business and developing a compelling vision is an important first step.

A mistake many companies make is to start with Technology first, creating platforms and offering services they assume the customer wants.

If they started with the customer and industry need and then worked back to how they add value through technology and know-how, they are much more likely to be successful.

The Discovery phase can be facilitated by three simple methodologies to identify the profit pools that will pay for your investments; Value Mapping your customer and industry supply chain, examining your Points of Selling in the product life-cycle, and finally a review of the data you currently create and will/can create in the future.

Solutioning:

Solutioning involves breaking the vision down into tangible projects and programmes that deliver something real.

Although understanding customers enables us to quantify the opportunities and set priorities, figuring out where to focus a Digital Servitisation strategy that flows across organisational silo’s is not so easy. One way is to see the impact from two very distinct perspectives:

1. Technology Digitalisation:

That product and supporting operational infrastructures are designed to produce data that can be collected, analysed and then monetized through service-based business models. Generally, technology is used in one of two ways:

• Technology in the product and company infrastructure that enables Digital Support, such as remote diagnostics or predictive maintenance.
• Capabilities and technologies in the organisation that enables Data Analytics, such machine learning, visual analytics and business intelligence technologies.

2. Back Office Digitalisation:

The tools we use to manage our business back-office which sustain and improve margins /profits. Examples might be Service Management solutions, CRM and ERP. Generally, there are two aspects to consider in terms of system & process development:

• To enable Customer Management, making customer data transparent and so breaking down silos.
• Enable Business Process Automation: so reducing cost and often leading to improved customer experience.

3. Combining Technology and Back-office Digitalisation:

When products and infrastructure that collect, analyse and action data, are fully integrated with the back-office process, we can explore what new business models such as Digital Servitisation can deliver in terms of value

Business plan:

Having identified the customer solutions and internal process improvements, it is time to execute and deliver the products and offering.

We require a business plan which defines Where we will target, with What, When and Who in the target organisations and How the delivery model will deliver excellence.

This is a process in its own right and one which we call Customer Focused Business Development.

It involves working through a structured approach to customer segmentation, defining the service product portfolio that is relevant to specific customer profiles, the GoTo market or sales strategy that will be most effective, and the service delivery model that drives profitability.

Learning points

Digital Servitisation does not all have to be done at once, nor is it necessarily a linear process. An agile approach in small pilots or sprints that overcome specific hurdles are a good way to drive small incremental changes towards a larger goal.

The key to success is to use cross-functional teams with a breadth of expertise and experience coupled with a logical framework to cut through complexity. In our experience, it is possible to run through these 3 phases between 3-6 months depending on the complexity and ambition of the business.

The key to success is to use cross-functional teams with a breadth of expertise and experience coupled with a logical framework to cut through complexity.

Don’t be put off by technology jargon, and if in doubt always come back to the customer value as your guiding light through the complexity of change.

Once you have developed your direction, execution of the transformation strategy is more akin to a major change programme. For more thoughts on this process, you can read our FSN articles on the Art of Driving Innovative Change and Self-learning solution-focused mindset.

If you would like to know more about how Si2’s Digital Servitisation programme can help you unlock the data and know-how of your business, then please contact us Nick Frank or Harald Wasserman who can be reached at info@si2partners.com

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Scott Berg, CEO at ServiceMax, from GE Digital explains why for those organisations getting the results that matter, the Industrial Internet of Things alone isn’t enough to transform their service offering...

Complex machines power the world’s largest industries, from offshore rigs to networks of medical devices, to massive wind turbines.

Over the last decade, we’ve seen everything from treadmills to coffee makers digitized in pursuit of smarter, better and faster machines to get better results. Industrial companies are adopting digital strategies and require a distinct understanding of connected machinery to do so successfully. It’s no surprise that these machines require thoughtful, technical and predictive maintenance.

Companies now more than ever are in the business of keeping machines running to ensure that the absolute most value is derived from each piece of equipmentCompanies now more than ever are in the business of keeping machines running to ensure that the absolute most value is derived from each piece of equipment. Our customers report, on average, a 19% increase in productivity since implementing Predix ServiceMax. That basically means that we can add an extra day to the technician’s week without working overtime.

ServiceMax from GE Digital is helping the world’s largest companies on their digital journey, starting with service delivery. What is fundamental to our understanding of Field Service Management (FSM) is the scale at which we provide service. We are meeting our customers at a global, enterprise level. As the industry adopts the Industrial Internet of Things (IIoT) we think about service in a big way and help companies on their digital journey.

We are 100% invested in making sure our customers are getting absolutely all the value they can from the equipment they have and how it’s being used.

Why IIoT won’t be enough to transform service

IIoT-enabled devices and data insights alone are not enough to paint a clear picture of service in the future. Talk of IIoT is everywhere, from budgets to yearly planning, to newspaper headlines. At the end of the day, data informs a procedural change within only one part of a machine at one point in time. Decisions are made on a limited set of inputs, whether that be wear and tear of a specific part, or work order history.

You might say that using IIoT alone is tunnel vision.

Meaningful service is going beyond IIoT, and Asset Performance Management (APM) is the catalyst: it opens up data to more contextual inputs from the broader ecosystem. APM harnesses the behaviour of the machine and goes beyond a simple exercise in efficiency.

It’s important to understand the key is not solely APM, FSM or IIoT. Rather, it’s all three working together to create a holistic solution.It’s important to understand the key is not solely APM, FSM or IIoT. Rather, it’s all three working together to create a holistic solution.

APM monitors the behaviour of the machine, and the FSM platform brings it all together to inform how, when, and why we choose to service or replace a machine. It monitors machine health directly after a repair, and cycles that information into future repairs, to close the loop of service.

The powerful combination of APM and FSM provides a complete view of a product and establishes lifecycle management strategies. The result is a service product management solution that has up-leveled a traditional connected device strategy, incorporating a business’s bottom line. This has saved our customers millions of dollars.

Digital industry brings dynamic results 

Field service in the industrial era is more than a one-time project. Done well, it is an industrialists guide to a digital future, providing vital insights and outcomes for customers. The new era of field service will be marked by connectivity and share a fundamental goal of zero downtime for critical equipment.

There will be industrial behemoths and then there will be digital industrial behemoths.

Field service is evolving into a system that doesn’t forgetField service is evolving into a system that doesn’t forget: an APM-integrated platform incorporates past data to make decisions about parts, technicians, and compliance in the present. And then the magic happens: the system integrates several data factors based on the outcomes of similar work orders and controls for a business perspective: how much time and money can we afford to spend here? That data is translated to actionable insights for technicians on the ground, meaning they are not working towards a static goal of ‘machine repair.’ Instead, technicians are working towards a dynamic outcome: machine uptime.

We are reaching a point where FSM is simultaneously smarter than us yet utterly useless without the most vital component of service: humans. Technicians close the loop between data and predictions by recording the actions they take.

They have the training, the expertise, and the context for each work order with a FSM platform at their fingertips. And the result is that not only is complex machinery functioning smoothly, but FSM is providing the savvy digital industrialist an avenue to a more prosperous day on the job tomorrow.

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Insights from a recent study by the Advanced Services Group at Aston Business School can help you understand if you’re on the right path to advanced services. Professor Tim Baines explains...

Is Servitization a burning topic for your organisation - join Professor Baines and the Advanced Services Group for the Spring Servitization Conference, Copenhagen, Denmark, 14 - 16 May 2018 more info @ https://www.advancedservicesgroup.co.uk/ssc2018

Researchers and pioneering manufacturers have been singing the praises of servitization and its benefits to business – and it seems industry is starting to listen.

Increasing numbers of manufacturing and technology companies are trying to implement services-led strategies. How to go about doing this in practice, however, still presents a challenge to many. The leaders of today’s industry see the success of Rolls-Royce and Xerox in this area, yet they often struggle to work out how to achieve the same for their own businesses.

Within the Advanced Services Group at Aston Business School we’ve been working with manufacturers around the world using the latest research to support them in finding their path to compete through advanced services.

Advanced services’ go a step beyond the product condition and focus on the outcomes that the product enables.While most manufacturers already offer ‘base services’ focusing on product provision such as warranty and spare parts, others take a further step by providing ‘intermediate services’ focused on the product condition such as maintenance, repair, overhaul and remanufacturing,. ‘Advanced services’ go a step beyond the product condition and focus on the outcomes that the product enables.

Real-life examples include Rolls-Royce’s Total-Care offer on gas turbines for their airline customers based on a ‘fixed dollar per flying hour’; Xerox delivering ‘pay-per-click’ scanning, copying and printing of documents; and Alstom Train-Life Services supporting Virgin by assuring the availability, reliability and performance of their Pendolino trains on the UK West Coast Mainline. Advanced services such as these are a core concept in servitization.

With their potential to radically disrupt and alter the face of manufacturing, understanding the process of introducing them is vital to businesses and the economy.

At the Advanced Services Group, this is the focus of our work.

In a recent study, we examined two key questions about the path to servitization:

1. What stages do manufacturing companies go through to achieve competitive advantage through advanced services?
2. What factors and forces affect their progression through those stages?

We conducted interviews with 14 multinational manufacturing companies, all on a trajectory to compete through advanced services, representing a range of industries – from aerospace, defence and road transport through to air filtration and precision motion control systems.

The four stages of transformation

We found that manufacturing companies go through four stages in their transformation to compete through advanced services: exploration, engagement, expansion and exploitation. As manufacturers become conscious of the concept of servitization and suspect that advanced services may be relevant to their organisation, they will start out in a stage of Exploration, where they are doing their research to find out more about the concept and how it could benefit their business.

If the Exploration stage yields a viable opportunity for growth, the initiative will move to Engagement. Here, companies experiment and run pilots with customers and relevant technology, to evaluate and demonstrate the potential value of advanced services.

If the Exploration stage yields a viable opportunity for growth, the initiative will move to Engagement. Here, companies experiment and run pilots with customers and relevant technology, to evaluate and demonstrate the potential value of advanced services.Once a constructive outcome is achieved, the attention moves to Expansion, where advanced services are innovated and implemented with increased scale and speed. When the value of these is demonstrated, attention will switch from individual projects, to initiatives focused on the reliable and efficient delivery of a portfolio of services across the organisation. In doing this, manufacturers are focusing on Exploitation of advanced services.

In each of these stages you can expect multiple iterations and interactions until there is sufficient evidence and consent to move to the following stage.

Progression through the four stages – or in some cases falling back – is influenced by five forces.

Five forces affecting transformation

1. Customer Pull

Customers’ appetite for services has a significant influence on progression.

Several companies described their decision to offer more advanced services, together with usage-based revenue models (i.e. pay-for-flight-hours or pay-for-passengers-moved) as a direct reaction to customer demand.

2. Technology Push

Other manufacturers start servitization having become aware of the technology that could record how their products are being used and transmit this data back. The data makes it possible to develop advanced services contracts based around payment for outputs achieved rather than asset ownership.

The majority of the companies we studied said they had been influenced by this ‘technology push’; IoT and industry 4.0, which are hot topics in industry at the moment, were often mentioned. Fewer companies mentioned the ‘customer pull’ factor, and yet customers’ growing appetite for ‘experiences’ over ownership is arguably just as significant.

In the UK for example, the appetite for services has grown 2.4% per year for the past 20 years according to the Office for National Statistics, significantly outstripping that for selling products – a trend that is being replicated in every developed economy across the world.

3. Value network position

The position of the organisation within the wider value network can affect business transformation.

As an example, working through distributors can restrict access to customers and inhibit the changes needed to deliver services. In several cases, manufacturers chose to acquire their distributors.

One manufacturer was stalled by the access to remote sensing technologies, wrestling for some time over acquiring a technology vendor, to give them access and control over information. Positioning in the value network that delivers dependable access to both customers and suppliers has a significant influence.

4. Readiness to change

Internal organisational factors influence readiness to change and can affect progression. Having reliable and well-performing products, for example, is a prerequisite to compete through services. It also leads to an interest in advanced services in cases where, increasingly, product reliability and performance are no longer differentiators.

Organisational commitment is also important. In some cases, where the support of the management board was in place from the outset, companies progressed quickly through the exploration and engagement stages. Without this, progress can be much slower.

5. Competitor threat

The actions of competitors significantly affect organisational commitment. In one case, organisational commitment to advanced services came about when a principal competitor acquired a network of service providers.

This caused anxiety amongst the leadership of the company and led to significant investment in its own advanced services programme.

Are you on the right path?

The findings of our study suggest that transformation towards servitization is neither a clear-cut, linear processnor an easy one. In each of the four stages, key milestones have to be achieved before a company can move to the next stage.

The five influencing forces work internally and externally, affecting progress in each stage. These five forces may be so strong that the manufacturer moves rapidly through all four stages. In other instances, they may be so weak that the manufacturer fails to progress entirely.

Next month we will be running the seventh annual Spring Servitization Conference, this time in partnership with Copenhagen Business School, where we will examine research into the detail of these stages and influencing forces.

The Conference is the go-to place for researchers from around the world to present and discuss their latest work, and topics this year will include: changing the mindset of the organisation in order to compete through services; pricing advanced services; how to use data as an enabler for servitization; how SMEs, in particular, can create value through servitization; internal and external enablers and inhibitors.

To book your place, visit https://www.advancedservicesgroup.co.uk/ssc2018. 

Field Service News will be reporting from the conference and interviewing some of the industrial speakers; look out for updates in future issues.

Can’t join us at the conference?

You can still develop the skills, knowledge and action plans to implement servitization and advanced services at our Skills for Servitization workshop on 22 May 2018. Find out more at https://www.advancedservicesgroup.co.uk/skills-for-servitization In the meantime if you want to assess where your company stands today in terms of adopting a services strategy and where you’re aiming to get to- and compare your thoughts with colleagues to test your alignment- our quick survey Unlock Your Insight will give you a personalised set of feedback in under five minutes. Visit https://www.unlockyourinsight.co.uk/

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