Is the movement towards servitization growing?

Is the movement towards servitization growing?

In the opening segment of this report, we looked at the headline finding of the study that the pandemic has had no negative impact on the continuing shift towards servitization. In fact, when we take a closer look at the data, we can see that, if anything, the shift towards servitization has increased since the pandemic.

 

Indeed, amongst the sample set of service organisations involved within this particular study, we have seen a significant increase within the last year amongst those organisations who have stated they now have some servitized element within their service portfolio. 

 

Over two-thirds (38%) of the organisations within the study who stated that they do have such an offering also stated that they have only had been able to offer this solution within the last year. This is compared to just under a fifth of companies (19%) who have had a servitized offering in their portfolio for two years and 14% who have stated that they have had such an offering for more than five years. 

 

 

The fact that we see an increase in the number of companies offering servitized solutions across this reducing time frame certainly suggests that, in general, we are seeing a continuous increase in the number of companies adopting servitization principles within their service operations and wider business. However, if we look at those companies who have been providing servitized offerings for more than five years, we see that almost a third (29%) of these organisations within the study have stated that they have some form of servitized element. 

 

While on the surface, this may seem anomalous, one interpretation of the data that sits comfortably alongside both the findings of earlier industry studies into this area, as well as the anecdotal evidence of industry discussions at large, is that we may be seeing those earlier adopters who were at the forefront of the movement represented here. 

 

These were the organisations that were pioneers within the development of advanced service strategies, and the wider industry is quickly following in their footsteps. This hypothesis is also supported by the weighting these organisations have towards an outcome-based approach to servitization (80% of this group indicated that their pricing was at least somewhat based on outcome-based pricing compared to 71% of the total response set) which could indicate further maturity along the traditional advanced service spectrum.

 

One way to ascertain if this hypothesis is correct will be to understand the maturity of the servitization offering such companies are offering customers – and this is a key area we shall be exploring in the qualitative side phase of this study when we undertake our series of follow-up interviews. 

 

 

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