Insights from Aerospace, Heavy Equipment, Lighting, Document Management, and Wind Power Industries.
Subscription models and servitisation are gaining popularity as companies search for novel approaches to value creation and market differentiation. Businesses can better meet their customers’ demands and increase the predictability of their income with the help of these strategies for providing supplementary solutions and services.
Aerospace sectors heavy hitters like Rolls-Royce, Pratt & Whitney, and General Electric have all adopted a “power-by-the-hour” model that is a prime illustration of servitisation. Using this pricing scheme, clients for products like aeroplane engines pay a set fee per flight hour. Providers handle repairs and upkeep so their clients can concentrate on running their businesses.
Rolls-Royce can be a great example here. Instead of selling aero engines, Rolls-Royce now contracts with customers for the power that the aero engine delivers while also providing maintenance and support services to ensure that the engines can continue to deliver power. This model creates a win-win situation for the company and its customers, as customers receive reliable products and services. At the same time, Rolls-Royce can generate revenue from ongoing support and maintenance.
Philips offering LED lighting-as-a-service to Amsterdam-Schiphol airport is an excellent example of how servitisation can be applied to different industries to create a win-win situation for the provider and the customer.
Caterpillar is a manufacturer of heavy equipment, such as bulldozers and excavators. They have implemented a servitisation model where they sell “power-by-the-hour” contracts to their customers. Under this model, the customer pays for the equipment’s work, and Caterpillar takes care of the maintenance and repairs to ensure the equipment is always in top condition.
Xerox is a company that provides document management solutions. They have shifted their business model from selling printers and copiers to offering managed print services. Under this model, customers pay a monthly fee for Xerox to manage their print needs, including supplying and maintaining the printers and copiers and providing technical support.
Siemens is a global engineering and technology company. They have implemented a servitisation model in their wind power business, offering “Wind Power as a Service” to their customers. Under this model, Siemens owns and operates the wind turbines and sells the power generated to customers under a long-term contract.
Similarly, the subscription-based model offers customers access to products or services on a subscription basis, providing a more predictable revenue stream for the provider while offering customers greater flexibility and cost-effectiveness — ServiceNow is a leading provider of cloud-based software solutions for IT service management and other business operations.
Several features of ServiceNow facilitate an organisation’s transition to a service-based model for conducting business. IT departments can be better managed with tools like ServiceNow’s IT Service Management module. Its Customer Service Management component provides a system for handling customer inquiries and complaints. Human Resources (HR) Service Delivery and Security Operations (SecOps) are two further modules that help with incident management and HR operations, respectively.
ServiceNow’s capabilities can be applied in various industries and use cases, supporting companies to adopt a more service-oriented approach and offer solutions that supplement their traditional product offerings. For example, a manufacturing company providing heavy machinery could offer customers a maintenance and repair service supported by ServiceNow’s IT Service Management capabilities to manage service requests and track asset performance. This way, the company can create a more predictable revenue stream and offer customers a complete solution.
In today’s ever-changing business climate, subscription-based services and servitisation offer a way for companies to produce value and keep their competitive edge. With its platform for managing service requests, tracking asset performance, and delivering a complete solution to clients, ServiceNow may assist organisations during this transition.
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