Are you ready for 2020?
According to a World Economic Forum prediction, products will have become services by 2030. The servitization is on its way as more and more products are sold as services.
No need to own things. Subscribe for availability. Or pay-per-use.
Forrester predictions 2020 states: "We expect innovative, customer-delighting experiences to come to market that combine technology, creativity, and deep customer understanding."
Traditional product-oriented companies are launching new digital services and digitally enhanced services.
Common to all is that new digital business models need new business systems to monetize successfully.
The servitization trend is easily seen in many different industries. I wanted to share four examples of industries that are on the wave:
1. REAL ESTATE: Shared office spaces with services
Instead of investing in fixed office space, companies can use office space when needed and where needed. The same goes for furniture and equipment, meeting rooms and catering.
Customers get what they need and when they need it, paying only for what they consume. Prices can vary by location, quality, functionality and additional services included.
Read how Technopolis creates value for customers:
2. ICT : SAAS AND CLOUD
IT service providers have been in a digital service business for years selling capacity and solutions in a cloud. Customers are paying for the usage, instead of buying hardware or acquiring perpetual software licenses. Operators are providing many kinds of subscriptions for communication. These business models serve customers’ changing needs. One example is Enfo:
3. Energy sector: Sustainable energy
Customers are requiring sustainable services. This applies also to energy production. Do you know this true story of an energy company that discovered a new business opportunity with changed EU regulations?
EU now allows for horse manure usage as an energy source. Horse stables are now offered subscription-based waste management utilizing the waste in heat production.
This serves both for the horse stable owners and sustainable energy sector bringing value to both. And the service process is automated.
Read more about Fortum HorsePower:
4. TRAFFIC: MObility and sustainability
Reducing emissions is one of the key drivers in traffic. This example is about a city that launched an app and a backend platform for tracking daily trips and the resulting emissions.
The goals of the project were to collect and make available digital data on mobility, reduce emissions from transport, and develop new transport services for citizens.
This again is a customer-oriented new service. A public organization has led the project for reducing transport emissions and involved the community to participate. Results are benefiting all.
Read more https://www.smartlahti.fi/citicap/
The above examples are about new business models that meet new digital era customers’ needs and about companies that have already reacted to digital transformation.
New modern way for customers to buy services has changed
More examples appear month by month. Both in business-to-business and business-to-consumer areas. Just recently, a very highly respected Finnish product brand, Arabia launched a new digital service: Customers can now subscribe to tableware for their choice and pay a monthly fee.
Are you ready for the decade of Servitization?
According to MGI Research, Excel is still the most frequently used billing software. This means that many companies spend hours and hours to match the used services, products, and contracts to each invoice and repeat the effort every month. That is not readiness for Servitization. The benefits of digital services cannot be monetized without proper systems.
This is where we can be of help. Good Sign Software is helping service business to automate monetization end-to-end, from contracting and pricing to service fulfillment, to billing and revenue recognition.
Download the infographics, Decade of Servitization, about interesting research findings affecting service business
Feel free to contact us and let’s have a chat on how we can support your company.
MGI Research, presentation at Monetize 11 event, Amsterdam, 2019