SERVICE THINKING

Learn how a leading supplier of distributed control systems in oil & gas industries solved the challenge of slowing demand and low margins.

The Challenge

A leading supplier of distributed control systems in oil & gas industries was faced with slowing demand for its engineering projects and low margins.

Existing customers however, needed maintenance and improvement services on installed systems. The service business was keeping the business profitable. However, senior management kept its belief in the old business model depriving the promising service business of the needed investment and senior management attention.

The Challenge was to make service managers aware of the service business opportunities and develop a shared vision of the future business potential.

The Strategy

A strategy was developed to evolve the service business thinking in the company.

Benchmarking with industry peers and a Noventum research explored what customers really wanted. This confirmed there was big demand for high value adding and profitable services.

The Results

As more and more management support emerged, the first new service propositions were developed following a stage gate service design process.

After the initial service business development efforts showed tangible results, with the first high value services being successfully sold, delivered success was shared with board members who endorsed the strategic importance of the service business for the entire company.

A new board member was nominated, dedicated the task of developing and promoting the services business. Recently the company announced to shareholders that it will reposition itself as a “Service and solutions provider" focusing on the high value adding services business.

The Key Insights

Many companies and managers struggle to capture board room attention for vast profit and growth opportunities of high value adding services.

First, deep understanding is needed of what customers really want. Conducting customer research involving experienced service designers is a highly recommended first step. This often goes in tandem with developing a broader awareness at senior management level of the business opportunity. Secondly, a stage gate driven development of new services is needed, by a capable and enthusiastic team.

Only tangible results can transform a technology driven and inward looking culture into becoming a customer-centric and service driven business.