The expected economic benefits of ‘servitization’, a popular trend among durable goods’ manufacturers designed to expand the scope of their offerings from products into through-life-cycle services, have been disputed in light of recent empirical evidence suggesting that hurdles associated with the implementation of services may even result in performance decline.
In a recent study we undertook extensive research into ten sales-and-service subsidiaries of a successfully servitized manufacturing multinational to shed light on this ‘service paradox’. The results showed that success in setting up a service business in a manufacturing firm results from the presence of three operational capabilities that facilitate service performance.
- a skill set capable of extending the relationship with the broad client base;
- the capability to develop sophisticated service offerings that provide better coverage of customers’ needs; and
- the ability to offer all the services efficiently.
Cambridge Service Alliance