Servitization

The Service Revolution

Advances of technologies mean that manufacturers have the unprecedented opportunity to understand their end customers better and increase revenue streams by selling services alongside physical products.

Defining servitization.

Spectrum of servitization.

4-step maturity model.

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It’s inevitable that selling products as services will become a major component of OEMs’ businesses over the next decade.

Aly Pinder, IDC

What is servitization?

Servitization is the process when original equipment manufacturers (OEMs) evolve business models from product makers to product-as-a-service providers. Selling products-as-a-service is a value proposition offered to customers where they are promised life-long support for periodical, monthly or yearly or pay-per-use, subscriptions stated.

CapEx to OpEx.

Product-as-a-service.

Outcome-based subscriptions.

New business models.

New revenue streams.

What does servitization mean for manufacturers?

Manufacturers pursuing servitization must proceed at the right pace, preserving core revenues in their journey to offering more outcome-based services that fit their unique value. There are typically several stages companies go through in their evolutionary path to establish servitization elements in their service portfolio.

Stage 1: Parts sales supported by parts availability & pricing.

Stage 2: Time or cycle-based service contracts.

Stage 3: Outcome-based service contracts.

Stage 4: Everything as a Service (EaaS).

How does Syncron help?

The Syncron 4-Step Maturity Model provides a path to enable manufacturers’ shift to delivering Products as Services while simultaneously optimizing the performance of current break-fix service models.

Optimize break-fix simultaneously.

Servitization maturity model.

Customized recommendations.