From product-oriented to service-oriented business model with servitisation.

Why is servitisation attractive to the manufacturing industry?

Servitisation offers huge benefits for organisations that want to stand out and grow sustainably:

• Returning revenue - Instead of depending on one-off sales, organisations generate stable cash flows through subscription models or service contracts.

• Strengthened customer relationships - Organisations become long-term partners of their customers through proactive maintenance, performance optimisation and additional services.

• Competitive advantage - Products are no longer compared on price alone, but on the added value of the associated services.

• Sustainability & circular economy - By maintaining and upgrading products more intelligently, they stay in use longer and organisations reduce their environmental impact.

1. Predictive maintenance & performance guarantees.

One of the most valuable applications of servitisation is the shift towards predictive maintenance and performance guarantees. Instead of simply selling products, organisations offer an ongoing service that guarantees the maintenance and performance of products over their lifetime.

Power-by-the-Hour door Rolls Royce.

Rolls-Royce offers an example of servitisation at its best with its "Power-by-the-Hour" model. Instead of selling aircraft engines, they are offered as a service, with customers paying for the use of the engines based on the number of flight hours. This model uses advanced sensors that provide real-time data on engine performance. Based on this data, Rolls-Royce can predict when maintenance is needed and intervene proactively to minimise downtime. This ensures long-term customer relationships, as customers are assured of continuous service and operational efficiency is increased.

2. Product-as-a-Service (PaaS) pay-per-use.

In this category, organisations offer products as a service rather than as a one-off purchase. This ensures consistent usage and offers a more efficient model for both the organisation and the customer.

Light-as-a-Service door Philips.

Philips has introduced the concept of "Light-as-a-Service", where organisations no longer buy lighting, but pay for the amount of light they consume. Philips retains ownership of the lighting systems and guarantees the energy efficiency of the installation. Customers only pay for the actual use of the light, allowing them to save costs while gaining access to the latest technology without large initial investments. This provides Philips with a long-term source of recurring revenue, while customers benefit from lower operating costs and fewer worries about maintenance and energy consumption.

3. Digitale platforms & slimme services.

Digital platforms and smart services play a crucial role in the transition to servitisation. These technologies enable organisations to collect real-time data, improve customer interactions and offer predictive services.

Real-time insights at John Deere.

John Deere has combined agricultural machinery with a digital platform that helps farmers gain real-time insights into soil quality, weather conditions and the performance of their machines. This platform not only provides the ability to monitor machine usage, but also predict maintenance needs and performance. By integrating this data into a digital platform, farmers can increase operational efficiency and save costs, while John Deere generates a sustainable, recurring revenue stream by offering this service.

4. Machine-sharing en circulaire modellen.

This approach revolves around sharing machinery and maximising the lifespan of products by reusing or overhauling them, contributing to the circular economy.

Circular printing by Ricoh.

Ricoh leases printers with maintenance and software updates, recycling and reusing old machines. This model ensures that customers no longer need to invest in new printers, but only pay for their use. Ricoh takes care of maintenance and software updates, relieving the customer of the operational care of the equipment. With the circular approach, old printers are recycled and reused, contributing to sustainability and minimising waste.

The role of digital technology.

Digital technology plays a crucial role in the successful transition to servitisation. Smart technologies make it possible to offer and optimise services efficiently. IoT (Internet of Things) provides real-time monitoring of product performance and predictive maintenance, while AI and data analytics help improve efficiency based on collected data. Cloud-based platforms provide online dashboards and customer portals for self-service and remote management. In addition, the integration of systems through API links, such as ERP and CRM, enables the automation of all data flows and streamlines service-related processes. These technologies enable organisations to effectively manage and expand their services.

Where do you start?

A successful implementation of servitisation starts with a strategic analysis. Which services actually add value for customers and how can they be supported digitally? Next, a solid digital platform is essential, where customers can easily understand their products and services. By integrating smart technologies such as IoT and AI, services become smarter and more efficient. This process requires an iterative approach, where an initial version of the solution is launched and continuously improved based on customer feedback and data. Servitisation is not a one-off transformation, but a continuous evolution in which innovation and digitalisation are central.

For organisations looking to embrace servitisation, Cube is the digital partner that makes this transition possible. From strategy and UX design to the development and implementation of smart software solutions - Cube helps manufacturing organisations transform their product offerings into sustainable and profitable service models.