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Lionel Albert, EMEA Manufacturing and Supply Chain Cloud Director

The delivery of a finished product used to mark the end of your interaction with a customer. Now it marks the beginning. This shift towards service represents a major opportunity for transformation, innovation, and modernization – helping manufacturers drive increased loyalty and open up lucrative revenue streams.

This is where servitization comes in. Instead of selling a product, manufacturers sell what their product delivers. Rolls-Royce, for instance, operates a “power by the hour” service, whereby customers pay for the power their engines deliver rather than the engines the company builds. It’s a managed service where all aftermarket field service is included as required.

For manufacturers looking to seize the servitization opportunity, their transformation could take a number of forms. First, by improving the service delivered to customers, manufacturers could turn service quality into an effective differentiator – new technology like intelligent chatbots and customer service apps have a key role to play here. It’s will be important for businesses to consider exactly who their customers are and what their needs are, as any service investments will likely need to serve a mixture of partners, resellers, and end users.

Second, by packaging aftermarket services in a way that customers can pay for in addition to buying products outright, manufacturers ensure a more consistent and predictable flow of aftermarket revenue. Data gathered remotely through Internet of Things (IoT) sensors, for example, can monitor what is sold remotely and help solve customer issues before their product is interrupted.

The Manufacturers Guide to Digital Connected Service

Third, by delivering products as services – either using subscription or usage-based pricing models – manufacturers can boost revenues while giving customers a modern means of acquiring what they produce. Here, IoT can help monitor product usage remotely and expose new finance models better suited to subscription or usage-based payment.

What servitization success looks like

Servitization yields significant benefits for organization, their aftermarket service teams, and their customers. They include:

  • A choice of engagement channels for customers
  • Tools like live chat and AI-powered chatbots to get answers quickly
  • Discrete devices monitoring product status in real-time to deliver proactive support
  • Field service teams that have access to customer and IoT data — so they can deliver the right service, first time, every time
  • Sensors monitoring product usage, so customers only pay for what they use
  • Data gathered to continuously improve service and product quality
  • Customers building lasting relationships with manufacturers and their field service teams
  • Modern finance systems that support the monetization of your services, providing customers with flexible means of payment

Transform service delivery with a modern, connected platform

New service delivery and monetization innovations offer a range of benefits to both your customers and your organisation. However, if you take a bolt-on approach to data and systems, you’ll lack the connectivity and integration required to support modern connected services.

The Manufacturers Guide to Digital Connected Service

By adopting a unified platform for all of you manufacturing operations, you can create a strong, scalable foundation for service innovation. Developing a connected manufacturing platform can help you deliver innovative service experiences, stay connected to products being used by customers, deliver a superior customer experience, and monetize your products in exciting new ways.

Discover more about how Oracle can help you transform service delivery. Download The Manufacturers Guide to Digital Connected Services today.

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