Servitization- A revolutionary revenue model enabled through digital transformation
We are living in an era that is gliding towards digitalization; knowledge, entertainment,
banking is now available on our fingertips. This transformation is clearly visible in the
drift of Software to subscriptions for monthly usage by Microsoft. Itʼs also seen, in the
growing influence of day-to-day applications in entertainment and business platforms
like Spotify, Netflix, Salesforce, Workday.
Gathering reference from the past, these changes occurred in Industries way before.
Similar, business models were implemented in industries by Rolls Royce in 1962,
introducing ‘Power by the hourʼ for viper engines in business jet. Compared with
current evolution, these were initiated with limited resources in remote monitoring,
performance update, predictive analysis etc. Today, technology advancements
in Cloud, IoT, AI & big data analysis, enables equipment manufacturers to replicate
business models similar to the “Power by the Hour” model of Rolls Royce.
These “pay-per-use” models are termed “Servitization.”
Servitization enables market to operate with least capital expenses-Capex in consensus
with specific operational charges like Pay-per-Use. It provides manufactures/OEMs to
explore new business opportunities which values customer retention, recovering
revenue, advancements in equipment, real-time pulse of market and machines etc. At
the same time buyers can work on operational cost of equipment based on productivity
rather than buying it. As manufacturers are directly understanding the machine state and
operations in these business models, it can help to improve efficiency and can also
better plan maintenance & servicing needs. It works on a principle of outcome matters
more than the product.
Edging towards technical implementation of equipment Servitization, necessitates
different steps to be followed, which focuses on remote monitoring, data analysis,
predictive maintenance, billing and invoicing, design improvement, field service
planning etc. as referred in picture:
Implementation of servitization enables with co-ordination of sections like finance, ERP,
Field service into a single platform. Planning and service are important functionalities to
be considered by OEMs for the success of this business model.
Types
Join hands with Blueripples Technologies
Blueripples Technologies assist Equipment manufactures to extend their services
towards Servitization. BRTs Servitization business platform Equserv helps them to offer
their machines in pay-per-use business model. Equserv is a complete platform for
Equipment Manufactures for the hassle-free transformation towards the market trend
by fulfilling market need with creating greater visibility and real-time actionable insights
throughout the production cycle.
These models are widely used in industries like automotive, heavy machinery, Oil & Gas,
buildings solutions & medical equipment. This business model is potentially extendable
to all equipment manufacturing industries.
