Servitization is an evolution that many companies will need to go through for different reasons. Business trends and practices are changing, and now it is often a prerequisite to doing business that a company can offer a portfolio of services either directly linked with their product offering(s) or which play a broader role in building the overall customer solution.

When we take a look at some of the more recent industry trends, particularly in IT/Telco sector for example it is clear that Services are starting to make a significant impact. This first diagram below shows an example of a hi-tech company who have evolved within the past 10 years from offering basic services around their product, to a position where services are now the majority contributor to overall revenues. This is typical of the trend many companies are experiencing.

 For most businesses the key drivers ( regardless of the level of maturity ) are likely to come from some or all of the following :-

• Revenue Growth
• Margin Enhancement
• Increased Market Share
• Market Differentiation
• Customer Satisfaction/Retention
• Longevity & Sustainability

Servitization offers a route to success in  each of the above areas. At different levels of maturity or at different stages of development the key focus may change from one driver to another but the results can be compelling as illustrated in the example above.

Can your company afford to ignore Servitization or Services Innovation as a key strategy for future growth ?