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 pre-requisite to doing business that a product company can provide suite of services which accompany their product offering(s) and increase the value which their solution can bring to the customer.

Hi-tech industries such as telecoms underwent some significant transformation from 1998 onwards. The diagram below shows how services as a % of overall revenues grew in importance over a 10 year period. This was a fundamental shift and we are now seeing similar trends in other industries where services can often determine the real strength of a business solution.

 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 ?