Cutting through the hype: digitally-enabled services, servitization and the innovation of performanc
Digitalisation, IoT, digital technologies – everybody in industry seems to be talking about it and it is hard to get away from the hype and excitement. Digital, so it seems, is not only the future, but the answer to all your manufacturing and servitization questions. Isn’t it?
In our work with manufacturers, when it comes to digital, we hear the same question again and again: how do we capture the value of digitally-enabled services?
We decided to take a close look to examine the types of services that are enabled by digital technologies, whether it’s viable to sell these services as a discrete offering as opposed to providing them as an enabler for more advanced services, and how to get value from them. Our insights will be shared in our next whitepaper, which will be released in the following weeks.
This whitepaper goes beyond a roundup of academic thought. To enhance our academic and research expertise with real insights from manufacturing, we invited representatives from a range of companies.
In July, we were joined by 13 senior executives, representing local, multinational, B2B and B2C, large and small companies, for a structured debate on how digital is influencing the relationships between manufacturers, customers and partners. All companies taking part have started on their servitization journey, but are at different stages on the way to competing through advanced services.
The whitepaper debate
The debate focused on a particular type of service, performance intelligence services, which are very attractive to manufacturers because they present an immediate opportunity to create and capture value from new and innovative digital technologies.
Services fall into one of three broad categories; base, intermediate and advanced. Performance intelligence services are a type of intermediate service - they focus usually on the condition of the product, and they provide data, insights and sometimes advice to the customer, but the manufacturer does not take responsibility for carrying out any actions informed by the data, as they would with an advanced service.
Performance intelligence services can be seen as an enabling step towards being able to offer advanced services, and in some cases - as identified by our study - they can have a value proposition of their own and therefore bring in revenue.
Delving under the surface, our debate focused on three central questions:
How viable are performance intelligence services in practice; when can you offer them as a stand-alone service in their own right?
How can they create and capture value?
How should they be designed?
These are the questions we will be addressing in the whitepaper, including lots of real-world business examples and insights. We would like to thank all of our industry contributors for their time and contribution to shape the thinking and direction of this paper.