Think Tank Debrief: What is driving the move towards servitization
While there is much discussion about the how of servitization it is also important to understand the why. This was something that came up in on of the Think Tanks covered within this debrief session.
As Maarten Wijnheijmer, Global Aftermarket Sales Director, Howden commented during the Think Tank in question:
“I think perhaps one of the most important points around servitization is that you cannot sell the concept to everyone immediately. Although an even more important point around servitization is that, if you want to keep it simple and practical, you don’t need to sell it to everyone immediately either. The trick is to start with customers that recognize the value, test the proposition with them and then scale-up.”
While in the same Think Tank Jan van Veen commented:
“I think there are two things that need to be considered. One is the belief in the direction, the other is that you need to be able to innovate and try and explore and that you have resources available to do so.
“Often within companies everything can be so short term oriented, if that is the attitude of top and middle management then innovations will never flourish because such projects are just a disturbance of what is really important which is hitting your monthly and quarterly numbers.”
"I think that buy-in across all the organisation is key," Commented Daniel Brabec, VP Global Transformation, ServiceMax during the debrief session.
"You have to have all of the different players and a groups and have everyone bought in," Brabec continues.
"If we think about basic change management skills, you have your project champions. You want to make sure you have champions essentially for servitization across the whole business. That's at the the field service engineer level, that's at the senior leadership executive level and that's obviously at the at the service leader level. I think the one thing that's hugely important is making sure that service has a seat at the executive table
"It's not being directed from any one individual, it's making sure it's a conversation across all areas of the organization and that everyone's bought in. I think one of the things that must think about with servitization is understanding the conversation must make sense for all these individuals. Making sure they understand what it is is actually going to change about the business. It is also focusing on those areas of customer intimacy, operational excellence and product leadership.
"It's understanding all of those pieces, and then the value that will be generated for each of their areas of the business," Brabec adds.
"In answering what is driving the move to servitization, I would say a launching customer..."
- Coen Jeukens, ServiceMax
"I agree with, with Daniel's statement," comments Kieran Notter, VP Global Customer Transformation, ServiceMax,
"However, I would also add that there is there is a change now for for many businesses. It probably was a little bit earlier in the IT world, but now it's hitting the rest of the world as well is this change from having two CSOs. One being a Chief Service Officer and the other being a Chief Sales Officer, and obviously, the Chief Sales Officer was generally on that table before his service equivalent ever got there.
"But now there's a change where those two CSOs are disappearing, and you're ending up with a Chief Revenue Officer. By having a Chief Revenue Officer, now, all of a sudden, a company is focusing on where revenue comes from, and where it exists. If you are moving to a truly outcome based services, when you get to the element that you're no longer selling your product, you're actually selling as a service then that changes the whole profile. You know, if you're not selling the product, you don't need the Chief Sales Officer you're selling as a service. So you need someone to look after that revenue and understand that need and how that works between the product and the actual service that you provide," adds Notter
"I really think that Kieran and Daniel are correct from an internal Field Service Organization perspective," concurs Coen Jeukens, VP GLobal Customer Transformation, ServiceMax.
"All these dynamics are important. in answering what is driving the move to servitization, I would say a launching customer. For instance, I think the most quoted servitization offering is power by the hour by Rolls Royce. However, Rolls Royce developed that service offering not because they thought it was such a good idea, but because the Royal Air Force said we want to have more predictable models. We want to buy it from you, so you develop it for us. So I think tapping into the mindset of the customer and see if you can find a launching customer. I think that is a very good addition to all the internal alignments just by the CEO, CFO or CSO"