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5 Steps To Successful Servitization

Simple Steps To Maintaining Your Chromatography System

Servitization is one logical step in the transformative journey of how companies work with customers and generate revenue. In the not-too-distant past, a manufacturing company likely focused on the sale of its products -- say, an industrial-strength drill -- as a standalone offering. Service contracts represented a cost to the company. When products failed, it was considered too expensive for a product-focused company to service its own equipment. Companies allowed third-party vendors to provide the service contracts; while the companies generated revenue solely from the products themselves.

The landscape has shifted, however, and now servitization -- the process of generating revenue from services instead of products -- is opening the door to better customer outcomes, decreased operational costs, and even new innovations.

Take the example of SandvikCoromant, a manufacturer of cutting tools and services for the metal-cutting industry. It sought to take its service-side business to the next level, so the company developed a solution that connects to the Azure IoT cloud to collect data in real-time and get data out of the machining process such as temperature, load, and vibration.

Rolls-Royce wanted to improve aircraft performance, safety, and maintenance for their jet engines. It used an intelligent cloud and machine learning (in the form of Cortana) for three key outcomes: more efficient flight and maintenance plans, targeted and actionable fuel efficiency insights, and quickly generated reports and dashboards that tell compelling stories and deliver high-quality insights.