Using digital technology to revolutionise your service offerings

The servitisation of products is a strategy of capturing value by adding services to products or even by replacing a product with a service. Traditionally, the delivery of those services depends in large part on human intervention and resources. Customer-focused services are laborious and entail high costs for service delivery. They only scale linearly with human resources. This makes the scaling up of services problematic as it limits the extent to which a company can provide services. As a result, service delivery is outsourced to partners or local players are filling in the service gap.

Today, we see servitisation growing out of its analogue context. Digital technologies enable the scaling of services. They allow automation and boost productivity of service delivery and application of servitisation on a larger scale, more closely linked to the customer and at lower cost.

Digital services

The world of building and managing goods is being transformed into a world of building digital services tied to goods. More and more products in the field are digitally connected through the Internet to the manufacturers who created them. Smart, connected products with digital umbilical cords attached to a manufacturer essentially represent a new value delivery platform. The manufacturer/integrator/operator always knows about the use of the product. He can exploit this information to develop ongoing, long-term businesses to maintain a revenue stream from the customer, or significantly reduce operational costs.

In essence, the information about a product - some of it created by the product over time - becomes more important than the physical product itself. It is this insight that leads to a revolution in servitisation: Digital Servitisation, i.e. making use of a new value delivery platform for all players in the value chain (OEMs, integrators, consumable vendors, customers, …). 

Over the past years, we have seen that Digital Servitisation, one of the models also featured in the Masterplan Innovation, has been a major driver for making products smart and interconnected. We have moved from “smart as functionality” to “smart as business transformation”.

In the coming weeks we will explore this theme more in-depth, focusing on both what you can accomplish with digital servitisation and what tools, technologies and best-practices can help you to reach your goal. 

This series has been made possible thanks to the support of VLAIO, Innoviris, Smart Innovator.