London, UK – 26 October 2015 - Competing on price is no longer viable for most manufacturers today, according to ServiceMax, the leading field service management solution for a new era of business. Globalisation commoditisation, shrinking product margins and diminishing returns from a product-centric approach are forcing companies to look for revenue elsewhere. As we enter the era of the Internet of Things (IoT), a new and alternative services sector is evolving, called servitisation – also known as outcome-based services.
Servitisation is based on the premise that by integrating services with products, companies can create bundles that are of greater value than products alone. As manufacturers move from being purely product providers to becoming service providers as well, it adds value to their products and generates additional revenue while removing the need to simply compete on price alone. From a consumer perspective, the arrival of IoT means life gets easier and more convenient. From a manufacturing perspective, life will never be the same again. It’s disrupting business as usual for product manufacturers globally.
“As products become connected, servicing our machines, devices and appliances will move from reactive product insight to providing predictive alerts, triggering service technicians with the right skills to be deployed to the right place before a fault takes place with preventative maintenance, or in the event that something occurs,” said Mark Homer, Vice President Global Customer Transformation for ServiceMax. “For instance, your washing machine may alert the manufacturer that its bearings are wearing thin and in need of replacement.”
IoT and servitisation lets many kinds of companies shift from selling products to selling services based on those products. The decision for businesses and manufacturers therefore is not whether to adopt this model, as many analysts believe will become inevitable. Focus instead on how to transform (or in some cases establish) the services department, empower field service technicians with the right skills and field service management platform, and align the organisation with service outcomes, not simply products.
Kevin Ashton, ‘Father of the Internet of Things’ will be discussing servitisation and other implications of IoT at ServiceMax’s European customer user conference, MaxLive in Paris next week on 3 November.
ServiceMax leads the massive and global industry of field service management software -- an $18 billion market worldwide. The company continues to reimagine and create solutions for the 20 million people globally who install, maintain, and repair machines across dozens of industries as the only provider of complete end-to end mobile and cloud-based technology for the sector. ServiceMax goes to every length -- from joining technicians on service calls to publishing the industry's leading online publication -- to help customers discover untapped innovation, unleash new revenue streams, drive efficiency, and most importantly delight their end-customer. To learn more, please visit www.servicemax.com.