Noventum, Microsoft and HSO collaborate in research initiative ‘Drivers for Growth in Service’

 

8 May 2020 – This spring, research and consultancy firm Noventum in collaboration with Microsoft and IT solution provider HSO, has researched the drivers for digital services business growth of product manufacturers and technical services companies, operating in a data-driven and services-led world. Research participants came from a wide range of industries, and input was collected via in depth personal interviews and an online electronic survey.

 

Over the past decade, there has been a large shift in contribution to revenue amongst manufacturing companies, from product derived revenues to service derived revenues, the so called servitization trend. At the same time, their customers are looking for suppliers to provide more than only products and maintenance services. Customers are moving from large capital investments in products, to pay per use models, with high expectations of service and impact on their business outcomes. This research project was aimed at learning more about how companies grow and prosper in today’s services-led world.

 

The impact of covid-19 on service business growth?

The main part of this research took place just before the European covid-19 outbreak. Many of the companies who participated are involved in battling the virus, such as medical device companies, utility companies and field service providers. For them, this pandemic means an immediate increase in demand for their support services and teams, helping their clients to remain productive and operational. So, for these companies covid-19 is another important driver for growth in digital services.  And for the companies who have been negatively impacted by covid-19, it will be vital to adopt the new ways of working that have been learnt during the crisis and to put in place growth strategies that will ensure the survival and sustainability of the business.

 

Outcome and main conclusions

The main challenge for manufacturers lies in meeting the expectations of their customers. The customers expect suppliers to be solution providers who support them in achieving their business goals, such as increased production, meeting energy efficiency targets, or enhancing innovation and operations. For our research participants, this means they need new business models to deliver outcome based, data driven, pay per use type of services that meet their customers’ demands.

The research showed that 80% of respondents are planning to deliver, or are delivering today, customer business related services, even though less than a third of companies said that they had an IT infrastructure that fully supports these new business models. Managing this transformation therefore requires a digital services strategy that engages and aligns the whole organisation towards delivering a successful and sustainable services-based business.

 

More information and executive summary

The three main questions this research investigated are:

  1. Which are the drivers of success for product manufacturers and technical services companies?
  2. What strategies are being adopted to support these drivers
  3. How do companies organize themselves to take advantage of new opportunities?

 

For more information on our research ‘Drivers for Growth in Service’, and access to our executive summary, please follow this link

For questions about the research, please contact Noventum: Amin Harmak, Business Development Manager at Noventum, amin.harmak@noventum.eu or +31614865565

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