McCoy

The Challenge in Servitization 

Adding more value for the customer and his product 

Gone are the days when, as a company in the manufacturing industry, all you did was produce the final product. The competitive market demands more. Far-reaching customer service to keep the end customers satisfied, and extra services around the end product to let the end customer get even more value out of his investments. Or the transformation of your revenue model: your customer no longer pays once for every product, but takes out a subscription to the value your end product delivers. Consider Signify, which has long since stopped selling just lamps, but offers lighting solutions as a service and created innovative new value chains with the Philips HUE product line, for example. 

Major impact on end-2-end chain 

Servitization has a major impact on the end-2-end chain of business processes. It requires real-time visibility into the status of products, and different capabilities of sales people and service engineers, plus the possible external recruiting or hiring of this capacity, and extremely smart inventory planning and management.

The solution to servitization

Are you considering the transformation to services in your organization? If so, the following SAP solutions are relevant, for example:

Real-world success examples

We were a major contributor to servitization within Signify. Their Nature Dynamics business unit developed a platform with us that sells lighting recipes to companies in the poultry industry. There was a strong focus on animal welfare: the recipes were tailored to the animals and their welfare, allowing us to achieve maximum results. The settlement model was revolutionary and facilitated by technology from SAP Cloud Platform and S/4HANA.

A client of ours that we have been working with since 2015 is a market leader in machine sales. Over the past few years, we have been betting heavily on data driven solutions, the Internet of Things (IoT) and even embedded software together. We also see a clear trend of servitization at this client. They are increasingly selling specially tailored projects instead of standard machines that were in stock. All to provide even more value to their end customer and remain distinctive in their market. 

New processes and needs of the business

The success of our cooperation lies in continuous alignment of the IT landscape with the new processes and needs of the business:

  • We facilitate the sale and delivery of special project solutions by setting up new processes in SAP S/4HANA.

  • The new data-driven services must, of course, be invoiced and processed in the accounting system. Therefore, we implemented new financial models in the finance modules.

  • We worked on far-reaching integration with CPQ (Configure Price Quote) and customer service solutions in the cloud. This allowed us to optimally align sales and delivery. 

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