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Driving Service Provider Success: Service is the new product, bring on “servitisation”


Having spent the last few days digesting an informative report from Pacesetters.pinsentmasons.com on Advanced Manufacturing and Technology (AMT) businesses. It made me step back and think about many businesses, how they partner and every aspect of our lives. We are certainly living in the era of services, those that are successful in commercialising value-adding services look to prosper.


It is great to see that AMT businesses are predicting that services will generate more revenue than products in the future. Bring on “servitisation”, opening up new ways of monetising your capability and delivering client value. In this blog, I have summarised some useful information I hope many you will find informative along with insight as to service-oriented Configure Price Quote (CPQ) innovation that helps you be more successful. A link to the full report is at the end of this blog.


Looking at this research into top performing AMT businesses, the future focus certainly seems to be in the 4 areas below

  1. Driving innovative product/service development

  2. Investing in and using technology effectively

  3. Growth through M&A and geographic expansion

  4. Partner alliances and joint ventures (JVs)


1 - Driving innovative product/service development

Many businesses are reviewing their differentiation while redefining their service offerings and the value they provide, this is being forced by a few things

  • Changes in people’s expectations, they don’t want to be burdened with fixed products and hassle of costly one-time professional services along with the inevitable downstream lifecycle challenges. They want the “value outcome” and continual expert assistance, they want to be better enabled, advised and to focus on what’s important to them.

  • Growth and speed of innovation, driven by continual advancements across all sectors coupled with Moore’s law, improving connectivity, collaboration and cloud services driving exponential advancements in technology enablers.

  • Agile product management, continual deployment of new and improved features, people need value adding services to ensure they are benefiting not costly one-time disruptive engagements.

  • Far-reaching changes in the global economy and how businesses are increasingly a complex ecosystem of specialist partners and alliances.

Let’s look at the profile of technology businesses that are fast growing and outperforming their peers

These are businesses marked out by a determination to innovate, seeking new technology, talent and tools to constantly renew their product and service offering – and even to re-engineer their business models. They are businesses driven by data, making decisions with the use of sophisticated analytics rather than instinct, and monetising their data for further growth. And they are businesses that believe in the power of collaboration, whether through M&A or less formal partnerships.”


“The fastest growing AMT businesses are those that are able to constantly evolve their value propositions, meeting the changing needs of their customers through a continuous process of innovation.”


Successful businesses will have an effective strategy, product and service development teams that are continually delivering value and monetising it. They will have good frameworks but allow for creativity, their people will be clear on what success looks like and be both technically and commercially minded. They will recognise that their success is by best enabling the success of others, they will strive to achieve this.


2 - Investing in and utilising technology effectively

“Investing in new technology, whether directly or via M&A, is only one part of the challenge for these businesses. The fastest-growing AMT firms recognise the imperative to maximise their returns on these investments, generating the business benefits envisaged at the outset. Without such delivery, the business case for investment can start to unravel”.

  • The most successful businesses are automating their business operation, reducing cost and better servicing clients

o To get the best from people, create a working environment that enables them

o Don’t be a leader who blindly just expects the job to be done without consideration for how enabled your people are to get the job done

  • Recognise this pace of technology innovation is both an opportunity and threat and must be acted on

  • Using data to help improve monetisation. Isn’t it funny that many businesses are still yet unable to answer very basic questions? Which product line is making the most profit? What services are never quoted? What is the optimal sales price for x product or service?

3 - Growth through M&A and geographic expansion

Growing businesses typically result in multiple business units coupled with diverse portfolios, sales teams and geographies. In order to perform they need to be able to simply with effective cross and up-selling by enabling and guiding their sales teams. Centralising and consolidating products and services into a digitised portfolio that simplifies and enables quality guided selling while better enabling their people to perform is key to success.

It is also interesting to see that your ability to effectively bring value-adding services to market make you more attractive to investors. Achieving this requires a good business operating model underpinned with a quality service development framework. Such frameworks account for people, process, templates, systems and content.


Business should expect quality and self-sustaining sales launches, not ones in which product managers become sales crutch’s in absence of systemised and guided sales packaging. Product managers should be focusing on their next service release, driving further service value, helping drive more success.


4 - Alliances and joint ventures (JVs)

As a partner provider or consumer, maintaining, understanding and using complex spreadsheets for partner resale can soon become a complex activity requiring expertise that inevitably only a few are able to achieve. I am always fascinated as to how complex, error-prone and costly this method is in comparison to using the latest innovative CPQ technology to simplify the complexity by digitising and guiding users in a common interface.

Online retailers and business to consumer online services would rapidly go out of business if they took the same approach. This challenge is only set to grow with the increase in value-adding services driving growth in alliances, those who will be most successful will be those that can maximise value while simplifying and better enabling their partners in selling.

With the rise and maturity of Configure Price Quote (CPQ) solutions, businesses now have off the shelf software as a service (SaaS) that can help with this challenge. As an example www.servicepath.co begins with helping product managers cost modelling, price managing and packaging their services for simple effective and guided sale. For example, promoting cross and up-sell to existing and future new staff couldn’t be easier. It’s about the sales user experience, include these options as recommended and even default selected within that guided sales packaging.


Our view is that technology service providers must continually measure, refine, protect, improve their methods and tooling, listen to their environment, adhere to regulations and create value differentiation. Imagine getting this right, how more performant will you be? and how long will it be before you have performance issues if you don’t? The most successful will be those that are able to continually evolve with well-articulated value-adding offerings that are packaged for simple and effective sale and service delivery.


At Vendira we help you in effective servitisation, we complement your teams using our expertise, frameworks and use of innovative Configure Price Quote (CPQ) solutions we help you both define your services, as well as help, maximise the return from your investment in services.

We encourage you to read the full pacesetters AMT Feb 2019 report https://pacesetters.pinsentmasons.com/the-future-for-fast-growing-advanced-manufacturing-and-technology-companies-is-in-services

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