Servitization and the drive to selling Everything-as-a-Service (XaaS)
In the era of the Internet of Things (IoT) and the resulting 'Connected World', Servitization can help all organisations become leaders of their industries.
In a recent survey 89% of executives agreed that “business reinvention is required to be successful in today’s context" and in post-COVID times everyone is looking for new revenue streams and new business models. One growing trend, powered by newer cloud & IoT technologies, is the drive towards delivering everything-as-a-service.
But what is 'servitization' and how can companies accelerate their 'servitization' journey?
Servitization is about organisations building and growing revenue streams through selling 'advanced' services, using connected devices.
It involves both business model and organisational transformation, including a focus on people, process, technology, data, organisational structure and ecosystems.
Servitization enables companies to focus on delivering real customer value, from outstanding end-to-end customer service to delivery / co-achievement of desired customer outcomes, rather than just the 'prospect' of them i.e. selling customers your product and wishing them well.
The servitization trend is being enabled and powered by actionable intelligence from conected IoT devices, for example, enabling companies avoid unplanned downtime, increasing operating efficiency, spawning new products and services faster, and enhancing risk management, to name but a few benefits.
However, a word of warning here. This is not something that can or should be tackled lightly, or without strong intention. There have been several failures over the past years, of organisations that have attempted to take on this new way of delivering value, but without the necessary, whole-scale change that is actually required.
In fact, so significant is this change that's needed, we advocate a new role within the organisation to drive this change throughout; that of the Chief Service Officer.
It usually represents a new or amended business model, which often means that significant change is needed throughout the whole organisation and indeed across the whole service value chain.
But the benefits are significant:
- new profitable revenue streams
- increased productivity
- faster time to market
- higher lifetime customer value
- increased customer advocacy
- reduced business risk
- increased sustainability
- .... and more!
As manufacturers, distributors, service providers continue along a service innovation or service transformation journey, their digital strategy becomes a critical component of the journey’s success. Integrating field-based 'operational' technology (OT) into their current IT infrastructure is ciritcal, pricing models and strategies need to change and communication with customers, but also internal sales teams, need to align. In short, a well strutured, comprehensive change management plan is needed to enable companies design, develop & deliver more advanced services to their customers.