Spotlight on:
Servitisation Adapting the business model for Industry 4.0 The technologies of the Internet of Things and Industry 4.0 are opening up many different Having witnessed the success of IT-as-a-service, new possibilities for businesses in other sectors businesses. As part of this, are beginning to ask whether one key trend is a move the “as a service” model towards “as a service” could work for them too – delivery models and away and there are compelling from traditional cap-ex reasons for doing so. product sales. We consider what potential the servitisation trend has for British business.
Industry 4.0 has the potential to disrupt the way we work in many different ways. First, in terms of changes to the products we sell. Second, in terms of process, organisation and internal operations. Third, in terms of the business model and go to market strategies we employ. Servitisation falls into this third category. Software was one of the first sectors to successfully transition to a service model. Cloud-based software-as-a-service providers gave SMBs access to previously unattainable enterprise-grade software solutions with a low-risk approach of “pay as you go”. As cloud infrastructure-as-a service further embeds itself commercially, businesses are now moving the hardware portion of their IT expenditure from a cap-ex to an op-ex model.
Having witnessed the success of IT-as-a-service, businesses in other sectors are beginning to ask whether the “as a service” model could work for them too – and there are compelling reasons for doing so. Neil Lewin, who guides organisations through Industry 4.0 discovery days at Festo, makes the point that servitisation enables a business to charge for the service they provide at a rate that brings more value back into the business than the one-time sale of a piece of equipment – and gives the business a continued revenue stream. 13