Servitization is the Heavy Machinery Business Model

Those who hang around the world of construction machines and vehicles have not heard of anything else in recent days. A neologism that has put other terms in the background, which have been very inflated recently, such as digitization, independent guidance and connectivity.

“Servitization” are, in practice, the services evolved in the era of industry 4.0. They surpass it and give it further added value. In Western markets, customers increasingly tend to request customization and to be followed not only during the purchase but also during the use and maintenance of the product.

According to a global analysis, the service component is constantly growing and has now exceeded 30% of turnover in manufacturing companies.

Servitization is precisely the strategy whereby services offered in combination with a product become a central part of the offer and play a fundamental role in generating value.

If servitization is based on the principle that when we buy a product, it’s not the object itself that we want, but we look for the service it can offer us, the transition from simple addition of the service to the actual transformation of the products into services is short.

The relationship with the customer becomes fundamental and many sectors to keep up with the times are moving from the production and sale of products to the provision of services.

In short, we are in the midst of a service economy, in which we move from the sale of products to the sale of solutions to the needs of a customer.

Today, therefore, servitization means that practically all companies have the opportunity to transform the traditional product-centric model. But also to enrich its offer, completing the experience of its customers on the one hand and generating new sources of profit on the other. But beware: these services must be advanced. And integrated. No longer the usual after-sales service, the usual financing, the usual rentals, the usual maintenance contracts…but something profoundly different.

It is undeniable that new technologies are playing an increasingly central role in the development of advanced product-service solutions. It is these technologies and in particular the Internet of Things, Cloud Computing, Big Data, that are able to enable data sharing and encourage the development of new business models. And transform services (completely different from those offered in the past) into value.