Servitization strategies

Nowadays the daily challenges of Servitization Managers primarily concern the cultural transformation of companies. Their task goes beyond formulating business plans that shift the focus from selling the product alone, to bringing greater and ongoing value to the customer: they make sure to break down corporate silos so that the resulting business model is truly the result of convinced collaboration by all the various corporate departments. 

Our Company supports, in particular, manufacturing companies that are strongly focused on the product, to help them in shifting the focus of their strategies from the product to the customer and thus also reviewing their business models in the perspective of servitization strategies. A smart product becomes truly strategic when accompanied by a transformation in the customer relationship such as a pay-per-use contract, an additional predictive maintenance service offered by the manufacturer itself or the opportunity to share its use with others. 

Is there any obstacle in launching a servitization strategy? For companies, most likely yes. Skills, knowledge, and the ability to tap into the finance resource could be obstacles, to be overcome with caution and using the right tools in both the conception of the new business model and its implementation. 

The well-established strategic planning and marketing skills mixed with the team’s planning and finance expertise and knowledge lead Strategia&Controllo to be the ideal partner in accompanying manufacturing companies in evaluating and launching servitization strategies.

Specifically, we offer the following services: 

AUDIT on economic and financial sustainability and risk analysis

The first key step in being useful to the company is to share the starting point and subsequently guide the company in assessing the economic-financial sustainability and potential obstacles and risks in bringing a servitization strategy to market.

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Workshop on contamination between strategic marketing and IoT for servitization concept generation

Starting from a common information base of the initial situation, both in terms of current business and future potential, one can move on to the phase of “digital service innovation” workshops focused on the potential generation of digital asset servitization strategies. 

Our methodologies refer to typical business innovation tools, strongly emphasising the use of a lateral thinking approach. Fondamental is the presence of digitization experts, among the workshop coaches, who can stimulate the generation of ideas based also on technological opportunities and not only on potential customer desires, is crucial.

Service contract risk assessment and contract refinement (pricing) suggestions

Companies often developed the service innovation concept by evaluating the transition from sales to service too simplistically. 

The contract evaluation support service is particularly useful in identifying additional elements of the contract and making an economic-financial simulation that takes into account a careful analysis of contract risk and performance. 

This tool comes from the Paradigmix patent.

Support for change management

Introducing new business models involves not only a strategic reorganisation, but also a profound cultural and organisational review. 

Our team deals with these typical business project activities, taking action at multiple levels: strategy, planning and control systems, processes and technologies. 

Specifically, this service consists of: 

  • supporting the company in the revision of its business model, intervening with training and coaching to the staff involved 
  • introducing planning and control systems both for projects and actual results 
  • supporting the creation of a team of internal and external stakeholders for the implementation of the identified strategies 
  • managing all the start-up and implementation phases of the new business models by supporting internal staff in acquiring the necessary skills to then give continuity. 

Support for sales digitization

One of the fundamental tools a company must implement to have a customer-centric approach is CRM (Customer Relationship Management). Using a CRM encompasses all the activities, strategies and technologies that companies use to manage interactions with their current and potential customers. Implementation of this software brings numerous benefits to a company: building a wealth of knowledge both for contact database and for sales and post-sales activities, (better) segmentation and profiling of customers and prospects, support for the daily operations of sales figures, and greater control and empowerment of salespeople. CRM is therefore not just technology but a useful tool for better organising and managing all business processes and increasing collaboration between different functions. 

Considering the importance of this tool, Strategia&Controllo can count among its experts on professionals who can assist any client in evaluating and implementing strategies and with CRM.

Support for ERP-CFO 4.0

Digital servitization strategies by their very nature impact ERP systems and planning and control systems in general. 

Strategia&Controllo has expertise in this area, being precisely specialised on the topic of Strategic Planning and Control and in 4.0 technologies. 

The activities referred to in this paragraph are provided to support companies in the preparation of a proper information system capable of enhancing the data generated by the intimate (digital) relationship with their customers and the resulting automation in processes. 

In general, to learn more in this topic, we propose one of the information-awareness courses provided in the catalogue: CFO 4.0 

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Follow-through, efficiency and digitization operation

Strategia&Controllo,teaming up with its partners who are particularly structured to follow the streamlining of operational processes with the introduction of digitization tools, works to complete the necessary review of the business model resulting from a servitization strategy. 

It is said that many “enlightened” strategies do not turn into competitive advantage precisely because the company dissipates energy in the implementation. 

In this regard, the methodologies followed fall under the logic of lean management, lean planning and Industry 4.0.

Support in Finance (securitization)

Servitization strategies, whether traditional or from digitization, bring with them significant financial requirements, especially in the start-up phase. 

The benefits are certainly very important both in terms of customer loyalty and company value: a company with recurring turnover (from contracts), for the same turnover, is in fact worth much more! 

An interesting opportunity to finance servitization strategies is combining business innovation with financial innovation. Using the Paradigmix model, it is possible to proceed with the inclusion of receivables on fintech platforms that can give deep transparency to the actual value of a contract and thus generate the necessary self-financing.

Monitoring risk management and asset service contract performance (Paradigmix)

Servitization strategies lead to an expansion of production-operation management responsibilities, also required to monitor the health of assets at customer sites and take timely corrective action to prevent and/or manage plant shutdowns. A situation that would prove negative for both the customer and the company itself, which would effectively lose the opportunity for service revenues.

The service is outsourced by Strategia&Controllo.

Learn more about the Paradigmix Model