Looking Ahead: 2019 is the Year of Servitization

Here's why manufacturers need to begin the shift to servitization in 2019.

Gary Brooks

For decades, the balance of power in the customer experience has been shifting. Service has become a focal point and just about outweighs any other aspect of a purchasing experience.

In 2018, the gap widened between customer expectations and after-sales service realities and served as a catalyst for manufacturers to make major changes and, ultimately, begin the shift toward servitization. This shift, where manufacturers must evolve from selling products to selling the outcome or value that products deliver, and guarantee maximized product uptime. This means moving from break-fix models focused on repair execution, to ones focused on proactive repair prevention. This ultimately means the onus shifts from the end-user to the original equipment manufacturer (OEM) to make sure products are fully functioning.

The challenge here is that the transformation process doesn’t happen overnight. However, the benefits of servitization are incredibly attractive once the shift is made.

Here are three reasons manufacturers need to begin the shift to servitization in 2019 and the best ways to prepare:

Customers Want Servitization, So the Time to Shift is Now

For hundreds of years, manufacturers have been focused on repair execution – repairing a product after it has already broken down. This has created a sort of muscle memory for manufacturers, where the focus has settled around how to make the repair experience better, rather than potentially non-existent.

How can the repair – or the unplanned product downtime – be avoided, in the first place?

According to recent research with Worldwide Business Research (WBR), 98 percent of customers indicated they want to see maximized product uptime prioritized in their manufacturers’ service agreements, when, in actuality, only 33 percent of manufacturers offer this today.

There has never been a more important time for manufacturers to drastically change the way the after-sales service side of their business functions. Over the next twelve months, time management will be crucial – from the way it’s allocated, prioritized and spent – and the progress manufacturers make along the journey to servitization could be make or break for their future success.

Manufacturers Must Rethink the Way They Allocate Resources

Even though now is the time to start the transformation toward servitization, shifting away from break-fix and towards service-as-a-product won’t just happen overnight. People are at the core of after-sales service organizations, making up the workforce that keeps engines running and processes improving. And while the advancements like data and automation may have initially been introduced as a way to streamline the workforce, it’s more important than ever to empower those individuals who will carry their companies into the future.

This means that from the C-Suite, to the service technicians in the field to the research and development teams, OEMs need to examine how they are deploying these resources, and if they are properly prepared to take the next step.

Adopting the Right Technology is Crucial to Making Servitization a Reality

Emerging technology has always played a key role in manufacturing, but the adoption of that technology is where true industry revolution takes place and determines which brands will rise to the top. Companies that adopt new, sophisticated technology that streamlines processes, optimizes budgets and improves overall workforce performance are predicted to outlast – and outpace – their competition.

Companies need to adopt technologies that will both enable them to deliver on service-as-a-product promises and also empower their team members to find next-level results and areas for improvement. Technologies such as enhanced data analysis, IoT technology and customer service technology -- such as wearable tech -- will all play a huge role in the servitization makeover of the manufacturing industry and the sooner OEMs adopt them, the better.