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In an exclusive interview with Field Service News, Alex Bill, Alstom Power explains to Kris Oldland how the servitization model works in the power generation industry.

For many the concept of servitization is both a new and challenging concept. Even the language around the movement can be confusing. Advanced Services, Outcome Based Solutions, Industrie 4.0 are all on the surface similar terms for the same thing.

At its bare bones it's a movement away from a one-off transaction based revenue stream to a more prolonged, long-tail service-focused revenue stream. Servitization is getting traction across the globe but for many it’s still in its infancy.

However, for a few companies it’s just the way they do business and has been for some time. One of those companies is across a number of their divisions including power generation and one man who has been right at the heart of this sector for some time is Alex Bill.

 

“For Alstom Power we have been doing these outcome-based services, or long-term service agreements since the early nineties and we’ve been very successful with these long-terms agreements, which we call operational service contracts. It’s something that we tie in with our upgrade packages,” Bill explains.

Of course the first challenge for a company trying to move towards such a solution is to answer what is often the customer's most important and usually most pressing question ‘What is in it for me?”

Continuous improvement

The way Alstom approach this equation is by continuously improving the service levels and outputs that they deliver to their client base.

“We do a lot of R&D and service R&D on improving the performance of our install- base products and then retrofitting that onto the install base” Bill explains.

Of course this R&D can feed not only the service division but also production of new solutions as well, Bill points out. “By doing this we are also making our new products better and then again tying that all together with long-term contracts which you could call outcome-based contracts.”

So from a customer perspective there could be a very compelling argument for moving to such a relationship. Rolls Royce, for example, is one of the other often-cited examples of a company pioneering an outcome-based solutions model, but it was driven by their customer American Airlines.

 

But what about from the service company's outlook?

“From my own personal perspective one of the key benefits is securing long-term business,” Bill asserts. “With an outcome-based contract you can secure business with a customer or a range of customers for ten to fifteen years.”

Such long-term financial security is of course the answer at the heart of the servitization argument. The aim is to move away from the one-hit transaction and by doing so both spreading and increasing profits over a longer period but, as Bill reveals, the beauty of such an approach is that it can become practically self-perpetuating.

“In exchange for that long-term security you have, of course, to guarantee certain outcomes but it’s thanks to that long-term security that you can invest in your service R&D. Suddenly you’ve got a business case to make which is in fact quite a profound one. By investing in those upgrades and bringing them to market essentially it becomes self-fulfilling,” Bill explains.

With his relaxed and conversational manner, the way Bill explains it makes it seem like child’s play. Of course the opposite is true. Establishing such a close relationship with your clients is key if you are going to be able to make such an approach work.

“If you look from contract to contract, you really have to be pretty good with customer intimacy and build the relationship with the customer at quite a few levels,” adds Bill.

 

“That relationship is a key differentiator for us. It begins when we sell the new product and from there we are with the customer from day one. We then need to build on it and improve it through the services we deliver.”

Having worked both on the manufacturing and services side of the fence Bill is also well placed to see the difference between the two sides of the customer relationship.

“The interesting part from coming from the manufacturing side of the business is the customer you don’t really see until you are coming to the end of the process,” Bill explains when asked about the difference in approaching both the new-build and then the long-term service contracts.

“In service the customer is there at the beginning, the middle, and the end. The variability between customers is also more apparent: in their processes, for example, and understanding their individual needs and so forth. It really does take a different mindset as that variability and the needs of customers can be quite different. That’s always an exciting challenge,” he concludes.

 

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Whilst it may seem like we are taking giant leaps forward in field service right now, it's the many small steps that have led us to where we are writes Kris Oldland, in his May/June editorial leader.

One small step, one giant leap.

I sometimes wish I had been around when Neil Armstrong had uttered his immortal phrase. But if I had then perhaps I wouldn’t be reporting on what I truly believe is an equally important part of history.

We truly are living in an age of unprecedented technological advancement. Parallels are drawn with the industrial revolution and whilst some may baulk at such grandiose comparisons, personally I think history will show this to be an age that eclipses the shift from arable to industrial, an age that eclipses the space race, an age where our technology eventually becomes an integral part of who we are and of how we define ourselves as species.

But lets think back on those famous words of the world’s most famous astronaut.

One small step for man, one giant leap for mankind.

As I look through this issue of Field Service News I see so many giant leaps that are the result of many small steps forward. To begin there is my own feature looking at the Field Engineer’s Toolkit of 2020. In this I look at technologies I believe will become common in the not so distant future.

Five years ago each of these technologies would have seemed like the product of some outlandish, futurist fantasy. Yet all of the technologies listed are actually the result of the small steps forward that proceeded them.

Wearables for example are a hot topic right now, but they wouldn’t exist if it weren’t for the smart phone, which in turn wouldn’t have existed if it weren’t for WAP. 3D printing, one of the most exciting and futuristic technologies around, is some forty years in the making. The Internet of Things is now coming of age but medical device company Elekta were shipping their devices with 56K Modems twenty years ago.

Des Evans, Former Chairman of MAN trucks, one of those companies that is often held up as an example of both a disruptive company embracing technology and a manufacturer evolving into a service oriented organisation, sums this up perfectly. “We were an overnight success ten years in the making” he explained when talking about the way MAN reinvented the road logistics sector.

Another company that are placed in the same bracket as MAN is Alstom, yet when I spoke to Alex Bill in their Power Generation division again the hot topic of servitization and outcome based services is old hat for these folks. They grasped the nettle, and they took their small steps towards a customer centric, advanced services model many, many years ago. The result? Many of their competitors are now trying to emulate their success, but are a giant leap behind.

 

Meanwhile, Professor Andy Neely writing for Field Service News for the first time, outlines his recent experiences in China where a number of manufacturing companies are also making giant leaps forward as they try to use service to position themselves as sector leaders. The moral of the story? Those companies that put their customers at the heart of their thinking are going to always come out ahead of the game.

I love the quote from Hewlett Packard for example where they state they are now the largest paper distributor in the world. They used to sell printers and they were focused on what they did and they did it well. For many years they tried to educate the world as to why they were the number one choice when it came to buying a printer. Then one day they realised their customers didn’t really care about printers. Really all they cared about was printing their documents in a cost effective yet high quality fashion.

So they stopped selling printers and started selling the ability to print.

A giant leap? Yes. But one made from very simple small steps.

Another example of small steps and giant leaps in this issue is the story behind IFS. I was lucky enough to be invited to their World Conference a few weeks ago in Boston.

It was a great trip. Not only because the city of Boston is steeped in history. Not only because I watched my newly inherited team the Red Sox win in my first ever baseball match. Not even because I had a beer in the Cheers bar where Ted Danson came to fame, where everybody new my name.

It was a great trip because I got to witness what I honestly think is the true coming of age of a company, who I believe, will be a significant influence in the next few years both in the Field Service industry and beyond.

Whilst the audience was definitely already onside, it was a bit like attending an SNP rally in Glasgow, the fact of the matter is that IFS Applications 9 generated some serious excitement. There is some very cleverly designed functionality and some serious architecture going on underneath (Especially the in-memory stuff that comes later this year) but once again this is one leap forwards that is built on a number of smaller steps.

When I spoke exclusively with IFS Managing Director Paul Massey I asked him to outline the key milestones in his time with the company and as we talked it through I realised that whilst the milestones like their one millionth customer were important, actually it has been a case of steady, well placed steps that has led them to where they are today. But now with the backing of partners like Microsoft and Accenture they are geared up for one more giant leap forward in the near future I feel...

Hosted by Aston Business School and the Aston Centre for Servitization Research and Practice this conference which is being held across the 18th and 19th May 2015 at Aston Business School promises to be a showcase for current, relevant and innovative research in the study of Servitization...

Servitization can protect and enhance business performance, leading to long term growth and sustainability. Over the next 3 years, 65% of manufacturing businesses worldwide will turn towards offering services*. Set against this backdrop the annual Spring Servitization Conference as Aston Business School will showcase current. relevant and innovative research in the study of servitization.

Presentation themes for the conference include:

• Business model innovation for servitization
• Customer interaction and co creation through real time data and social media
• Techniques for the identification of service opportunities and design of services
• Organisational capabilities and environmental conditions required for successful servitization
• Digital technologies as service providers; connected products and the IoT
• Business ecosystems and co opetition for delivery of advanced services
• Implementation of servitization; the challenges, barriers and enablers
• The circular economy and environmental

About the conference: 

The Spring Servitization Conference 2015 returns for a third year, attracting a strong international gathering of academics working in the field of servitization research. The organising committee is pleased to announce a record number of research papers have been submitted this year, covering themes such as: business model innovation, the circular economy and environmental sustainability and digital technologies as service enablers.

Who should attend: 

This event is targeted at researchers working in the field of servitization, managers and directors from manufacturing companies both large and small, software producers and other technology innovators of all sizes.

Keynote speakers

• Professor Tim Baines, Director, Aston Centre for Servitization Research and Practice. Tim is an international authority on servitization and works extensively with manufacturers to transform their operations to compete through advanced services. He has published over 200 papers on management and engineering, and is amongst the most frequently-cited authors on servitization. His career started with a technician apprenticeship, and has progressed through a variety of industrial and academic positions. Read Tim Baines latest exclusive feature for Field Service News here 

• John Cullen, VP Services Marketing, Metso Corporation. John Cullen is VP Services Marketing at Metso Corporation. In this role John is responsible for productizing the service portfolio, transforming the business to value based solution selling as well as communications for this 1 Billion Euro plus mining services business. Previous to working for Metso, John had a long history in business development and sales working for global brands, such as Nokia and O2, as well as having his own successful business development and sales company. John has an Engineering Science degree from St Catherine's College, Oxford University.

• Harman Lanser, Product Development & Logistics Group Component Products for AIRFRANCEKLM Engineering & Maintenance Within his scope is development of new products within the Component Availability area, OEM strategy and Supply Chain Development. Before that Harmen was Director Component Management at KLM Engineering & Maintenance for five years after a period of 6 years in Purchasing at KLM E&M as Director and Vice President Strategic Purchasing. Harmen has an experience of 28 years within Engineering & Maintenance. Since the Air France/KLM merger in 2004 he is one of the key players in the alignment of the procurement and supply chain activities of Air France Industries and KLM E&M. Harmen has his BSc. in Aeronautics and an MBA in E-commerce

• Christian Kowalkowski Associate Professor of Industrial Marketing at Linköping University, Sweden & Assistant Professor of Marketing at Hanken School of Economics, Helsinki. Christian Kowalkowski is His current research interests include servitization, solutions marketing, service innovation, relationship dynamics, and value-creation strategies. Christian has published extensively and serves as an Associate Editor of Journal of Services Marketing and is on the Editorial Board of Industrial Marketing Management, Journal of Business Research, and Journal of Business & Industrial Marketing. Over the years, he has collaborated with companies such as ABB, Electrolux, Linde, Saab Group, Tetra Pak, Toyota Industries, Volvo Group, and Xylem and been invited speaker at research seminars, associations and practitioner-oriented conferences across Europe.

• Michael J. Provost MA (Cantab) PhD CEng FIMechE FIET MIAM Engineering Fellow, Asset Management and Business Intelligence Services at Intelligent Energy Ltd. Before t joining Loughborough, Michael spent twenty-seven years at Rolls-Royce, two years at a Rolls-Royce spin-off company, Data Systems & Solutions (working on applications of aerospace asset management techniques in other industries) and five years at Bombardier Transportation. He is currently advising on the development and roll-out of a range of asset management techniques across Intelligent Energy Ltd.'s automotive, consumer electronics and distributed power product lines. 

The Venue: 

Conference Aston, Aston Business School, Birmingham, UK, B4 7ET

Contacts:

Further details can be found at www.aston.ac.uk/ssc2015 

Telephone: Jill Forrest +44 (0) 121 204 3249 

Twitter @_servitization 

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The world of manufacturing is getting ready for one of the most significant changes since the industrial revolution. Servitization is coming and amongst those leading the charge is Professor Tim Baines of Aston University. We're pleased to welcome him to the list of field service news columnists and here in this first article he gives us an introduction to this complex yet fascinating and important topic... 

The world once seemed simple; manufacturers made things and services companies did things for us. Today, increasing numbers of manufacturers compete through a portfolio of integrated products and services.

This is a services-led competitive strategy, and the process through which it is achieved is commonly referred to as servitization. Celebrated exponents of such strategies include Rolls-Royce, Xerox and Alstom; all offer extended maintenance, repair and overhaul contracts where revenue generation is linked directly to asset availability, reliability and performance.

Servitization is much more than simply adding services to existing products within a few large multi-national companies. It’s about viewing the manufacturer as a service provider that sets out to improve the processes of its customers through a business model, rather than product-based, innovation. The manufacturer exploits its design and production competencies to deliver improvements in efficiency and effectiveness to the customer.

Manufacturers have traditionally focused their efforts on product innovation and cost reduction. Companies such as Porsche and Ferrari are celebrated for bringing new and exciting designs into the market, while companies such as Toyota are held in awe for their work with Lean production systems. These successes foster a perception that the only way for manufacturing to underpin competitiveness is through new materials and technologies, faster and more reliable automation, machining with more precision, waste reduction programmes, smoother flow of parts etc.

Competition through services

Services offer a third way to compete. This is not an ‘instead of’ or ‘easy option’ for companies that are struggling to succeed. Indeed, delivering advanced services can require technologies and practices that are every bit as demanding as those in production. Neither do they require the manufacturer to abandon its technology strengths; instead it can build on these to help to ensure long term and sustained benefits. Consequently, there is a growing realisation that such services hold high value potential.

Conventional manufacturers can struggle to appreciate the value of services, seeking such simple explanations of servitization that they fail to appreciate potential benefits. This is often the case with organisational rather than technological innovations. In the early 1980s it was difficult to imagine that ‘Just-in-time’ would endure, and yet today it’s hard to identify a single manufacturing company that has not been touched by Lean techniques in one way or another.

 

Servitization is a similar paradigm shift. The word ‘service’ can be used in different ways. It can refer to how well an action is performed – “that was good service” – or to an activity, like maintenance, spare parts provision and so on. Servitization relates to this second interpretation; activities that a manufacturer can perform to complement its products.

All manufacturers offer services to some extent, but some establish market differentiation through these, following services-led competitive strategies. Servitization is a term given to a transformation. It is about manufacturers increasingly offering services integrated with their products. Of these, some manufacturers choose to servitize by offering an extensive portfolio of relatively conventional services, while some move almost entirely into services, largely independent of their products, by providing offerings like general consulting. Others move to deliver advanced services.

Advanced services are core to servitization. Xerox’s ‘Managed Print Services’ is one example; rather than simply selling equipment, the company offers ‘document solutions’ to customers. For a typical customer, such as BA, Xerox provides project management, implementation of new technology, and management of third parties.

There are various types of advanced services, and a variety of terms is used across industry to describe these (e.g. availability contracting, performance contracting, managed services, solutions). However the outcome of these contracts is, invariably, a capability for a customer to perform a business function or process.

This is distinct from conventional services where the outcome is product ownership and maintenance of an asset’s condition. Particular contracting features are often coupled to advanced services.

There are four key features; the first three of which are relatively widespread: Pay-for-use revenue payment: pay-per click, pay-as-you-go, power-by-the-hour etc. are all terms used to refer to advanced services. For instance, in its contract with Xerox, Islington Borough Council receives a ‘click charge’ each time a document goes through a machine.

Long-term contracts: Contracts of fewer than two years are rare. The Heart of England NHS Foundation Trust has a ten year contract for its pathology laboratory facility, while in power generation, GDF Suez enters into contracts of 20 to 25 years. Risk management: The provider is responsible for ensuring asset availability, condition and performance. If an Alstom train is late, penalties of £600 per minute of delay are incurred if the fault is with the OEM. Commitment to on-going process improvement and cost saving: this features increasingly in advanced services contracts.

 

When these features are coupled with the principle of delivering a capability, contracts become sophisticated and demanding. Many existing contracts are relatively large, which is perhaps part of their appeal to OEMs. MAN Truck and Bus UK has 10,000 vehicles under contract, and expects this to grow by 50% over the next three to five years, to represent £200million of business. The Heart of England NHS Foundation Trust’s five-year contract in its pathology laboratory is valued at £20M per year.

Advanced services are however not only for large organisations. They can hold high-value for manufacturers big and small. They can help strengthen relationships, lock-out competitors, and grow revenues and profits and this is why servitization can be a sustainable business model for manufacturers of all sizes.

 

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Want to know more - why not attend the Servitization Spring Conference in May 18th - 19th Click here for more information

 

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Held at Fujitsu Stevenage, this event brought together 35 service professionals from around the country who listened to and discussed four excellent presentations covering various aspects of Outcome Based Services.

The excellent speaker this time around were:

• Veronica Martinez a globally eminent researcher in the area of Servitisation, presented an overview of the research she has been doing with the Cambridge Service Alliance. She told us how some of the worlds leading brands have approached developing Outcome Based Services, giving an exceedingly deep insight into the change process. Brilliant for any manager working on service transformation!
• Alex Bill gave his perspective of developing Outcome Based Service at the coal face. As a service professional in a major Power Generation OEM, he gave us insights into how the business model to make money is not as simple as just selling a service.
• Des Evans, the Ex CEO of MAN UK gave us the business perspective on servitisation, with insights from his 23 year journey to grow the business from £55M to £550M. It was a must ‘hear’ for anyone selling service concepts to their board.
• Chris Farnath Director International at Allocate Software, shared his own personal journey in leading business change toward outcome based services in the IT/Software world. Again incredibly useful to understand how he is approaching the ‘messy’ challenge of service transformation.

Thanks to all the participants for a great networking and discussion event

For a personal perspective on the event, read Martin Summerhayes’ account below which is also published in his personal blog.

 

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Service Community Conference - Outcome Based Services

[quote]“The purpose of a business is to get and keep a customer. Without customers, no amount of engineering wizardry, clever financing, or operations expertise can keep a company going.” ― Theodore Levitt

 

The first Service Community event for 2015 was held this week. There are two Service Community conferences that are held every year. They were first started by a wonderful consultant and friend, Steve Downton, many years ago and have continued to be popular and thought provoking events. Unfortunately, Steve lost his battle with cancer last year and a number of the core members of the community [including myself] decided to keep the event going - as much in Steve’s memory - as well as it gives a fantastic, open forum to share ideas, the latest thinking and case studies from the world of Services.

One of the key differentiators to other events, is that it brings together service practitioners to discuss and share ideas, changes in markets, share best practices and case studies. It is not an event where people come to try to sell products, services or companies - this is not what the Service Community is about.

So what do we mean by Services? We mean Services in the broadest sense possible. There were delegates from the widest spectrums of industries, including: Cambridge Service Alliance, Power Generation, Aston Business School, Construction, Cancer technology treatment, Sports Goods Technology, Logistics, Digital Photography, Soft Drinks manufacturer and then the traditional IT software and IT Services businesses.

 

What brought us together for this conference? The theme was “Outcome Based Services (OBS)”.

A number of points struck me during the series of four presentations and follow up discussions during the event. Obviously, the first point to mention, is what on earth are Outcome Based Services? The following points highlight the key elements of Outcome Based Services:

1. Predetermined results and predictable costs defined in agreement with the customer and are a reflection of the customers business: 

One example quoted related to the transport industry. The traditional approach is to pay separately for the truck, servicing, tyres, risk certification and then the fuel and driver. The customer then has to try to find the best deals for each of these elements. In addition, something I did not know is that a truck is only productive 25% of the time i.e. actually on the road delivering products and goods and hence making money. The OBS approach is to provide the vehicle and charge the customer on “price per kilometre”.

2. Protection of the client’s investments: 

One of the concepts discussed was leasing the product and having all of the associated services wrapped around it in a single charge. For example, the Rolls Royce model used to lease aero-engines which was shared at a previous event.

3. Short, medium and long-term savings adapted to changing client needs: 

One example was based on the savings from the production of electricity for the national grid using gas turbines. The customer could pay for either short term availability [how quickly you can turn on/off a turbine], medium term savings from the use of fuel, or even longer term savings from the ability to have upgrades build into the outcome based charging model which means the product stays in useful 2-5 years longer.

4. Use of methodologies, tools and processes to deliver outcome commitments and continual productivity improvements: 

The presentation from the University of Cambridge Service Alliance included a Service Strategy model - with examples where different customers had started the journey to “OBS”, In addition, the presenter talked about you might have to segment your customers as only some would be interested in OBS; that Risk Management and how you would deliver exactly what was required [the example given was the tonnage of rock removed by an explosives company] was critical and even giving away low margin services for “free” to be able to maintain a “sticky” relationship with your customers.

5. Operational excellence through the use of best practices, regularly reviewed to ensure their long-term applicability: 

The final example was a software company that realised that the current, traditional approach of implementing software solutions was not meeting the needs of their customers and has started on a journey to change the complete services landscape across their organisation to focus on “Adoption”. They had attended and worked with the leading industry experts, learnt the best practices and were implementing them in their organisation. The key to their success, though, was that the entire Operations Board of the company was behind the move.

My overall definition of Outcome Based Services based on the presentations and examples given would be:

Outcome Based Services are where you as the Service Provider, COMMIT to providing high-quality; customer defined and reflective of THEIR business; services; aligned with predetermined service levels and fixed prices, where there is a Shared Risk and Reward strategy in place for both supplier and customer.

 

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New infographic from ServiceMax shows how the benefits of going on the offence...

Over the past 50 years, manufacturers have focused on efficiently making good products in order to maximise their returns at the moment of sale. However, in a globally competitive market, many products are now commoditised and margins are getting squeezed, diminishing the leverage from such production-centric approaches.

That’s where a service-centric business model comes into its own. Servitization transforms companies from production to service provider, shifting them to delivering advanced services, such as selection, consumables, monitoring, repair, maintenance, disposal, as well as the opportunity to increase service revenues even further by supporting existing third party or competitive products. This creates an ongoing relationship with the customer that effectively locks out competitors.

As a business model, servitisation isn’t a new phenomenon – the origin of the term dates back to the 1960s. However, against the back drop of a global recession, product commoditisation, shrinking product margins, and major technology advances in end-to-end service delivery, servitization is providing companies with an effective hedge against market downturns, and higher barriers of entry for competitors.

As a result, service is shifting from the spotlight to the limelight, becoming a powerful offensive business strategy for top line growth and competitive advantage.

 

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The next event put together by non-profit knowledge sharing organisation The  Service Community is to be held on the 16th April at the Fujitsu's Stevenage office located at:

• 14 Cavendish Road,
• Stevenage,
• Hertfordshire,
• SG1 2DY

Continuing on from the excellent sessions that have been held at previous events the agenda is once again packed with key figures from industry and academia sharing their insights into what makes great service.

The days agenda is as follows:

• 12:00 Arrival, Coffees
• 12.30 Welcome and Introduction: Martin Summerhayes, Fujitsu
• 13:00 Presentation 1:  Dr. Veronica Martinez, Cambridge Service Alliance. "Outcome  Based Service"
• 13:45 Presentation 2: Alex Bill, "Advanced Services in the Power Generation Industry: competing through advanced services" 
• 14:30 Networking break
• 15:15 Presentation 3: Des Evans, Honorary Professor Aston Business School and Former CEO MAN Trucks. "Acheiving 'disruptive' growth in the UK Commercial Vehicle market with outcome based services"
• Presentation 4: Chris Farnarth, Allocate Software. "Customer success and outcome based software services" 

Attendance is free of charge and these events have proved to be highly engaging and thought provoking sessions in the past so attendance is highly recommended. To arrange your attendance email The Service Community on this link.

 

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While many IT experts are predicting further big things in IoT this year, Nick Frank suggests they are missing one more vital letter...

2014 saw an explosion in our societies understanding of the potential for connected devices.

Driven mainly by the SMARTphones and the ease of connection to the internet,just about everyone from your primary school kid to their grandmother is getting connected.

And is it my imagination, but utter the words Big Data, Analytics and IoT and they all seem to nod ‘sagely’? So with all this ‘wisdom’ in the world, it’s not surprising that in their struggle to differentiate, Service IT Solution providers have been falling over themselves to describe capabilities that manage knowledge, bring transparency and leverage big data.And in fairness this is not just talk.

The capabilities on offer are impressive, as Field Service, Parts Management, CRM technologies are increasingly integrated into seamless end to end solutions.

Indeed this trend is driving the next wave of consolidation in the industry. Led by PTC with their acquisition of Axeda and ThingWorx, solution providers are looking to develop the technology platforms to enable Remote Services.

Another example of the big bets being made is GE’s multi million dollar investment in their Predix platform for Machine to Machine (M2M) communications.The effect of this hype has been to dramatically raise the profile of the potential value connected technologies could have on industry.

But I am troubled by this jargon and thinking. In my mind these technologies and capabilities have no value if you do not do anything with the information they create. Yet we are all being told that if you don’t have an Internet of Things (IoT) strategy, you are dead!

But while working on a couple of projects in the area of Analytics and Remote Services, I had a Eureka moment.

It’s about the way we think!

Ok I admit, its probably blindingly obvious to the readers of FSN, but I believe that 2015 will increasingly become the

year of S.

And that is not because it’s now the ‘Chinese year of the Sheep’!

No, I believe we have it all wrong when we talk about IoT. It should be the iotS…

S for Service Thinking!

In simple terms ‘Service Thinking’ is the culture or even passionate belief that value is only created by applying your technical or business knowledge to improve whatever it is your customer is trying to achieve.

But to do this professionals will start to adopt new ways of thinking and I am afraid new jargon.

We will hear more of ‘Co- Creation’ & ‘Service Experience’. Metric will be biased towards outcomes rather than operational inputs. ‘Continuous improvement via learning’, which is a very much part of the service psyche, will enable companies to find new ways to ‘run, transform and innovate’ their business.

Indeed this type of thinking is not just limited to field service. Already most really profitable manufacturing companies have moved away from a product dominant focus to a Service Centric approach.

These companies focus on value creation in their customer’s business leveraging their technology and inherent know how to earn better than average margins.

Indeed this is a concept I will be promoting in 2015 together with the Servitisation guru Professor Tim Baines of Aston Business School, as part of the Manufacturing Services Thought Leadership network initiative to be launched later this year.

But it also dawned on me, that it is our imagination that is now the limiting factor.

Frankly the technology is out there to do more or less what ever you want. The big gap is our understanding of what these technologies can do for our business.

Indeed it is Service Thinking and Imagination, which companies must master if they are to reap the full rewards offered by these new technologies.

Already larger OEM’s are exploring these concepts in a very pragmatic way. We see them building infrastructure that sits between their Service Management System and their devices as they discover the benefits of remote services.

In the coming year, together with FSN, we will explore the progress they are making. So in 2015 if you want to stay ahead, don’t be a sheep…. Be a Service Thinker!

 

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