Changing the Game in Industrial Goods Through Digital Services

Changing the Game in Industrial Goods Through Digital Services

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Changing the Game in Industrial Goods Through Digital Services

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    Digitization has the potential to transform services at industrial goods companies. But the learning curve can be steep, and many companies struggle with the change from the beginning. The digital transformation should start with a clear understanding of how digital services can generate value for the target customer and what that customer journey will look like. This knowledge will clarify the service company’s ambition and long-term vision. It will also define a digital-services roadmap, including an implementation plan.

    Ongoing leadership and management support is essential. A separate business unit or organization that is focused on digitization may be necessary. Whether developed within the existing organization or separately, the initiative should be part of the overall corporate agenda, even at an executive committee level. A high-level manager, or even a chief technology officer or a chief digital officer, may need to spend significant time on the initiative.

    Service companies may also need to acquire new kinds of talent, not only technology experts but also senior managers who can act as catalysts within the organization. The need may be so great that a company decides to acquire a digitally savvy firm, as much for the talent as for the products.

    Finally, service providers will need to shift their overall culture toward agility and innovation. The new digital world is still in the making. Service providers need to embrace fast-paced, iterative processes and pilots that allow for quick testing and learning in controlled environments, with ongoing adjustments as needed. Each successful project will create momentum in the organization, strengthening the vision for digital services.

    Most industrial-goods companies won’t have a choice whether to embrace digital services. Companies that hold back will eventually find themselves squeezed out of the marketplace, either by existing rivals or new disruptive entrants. Others may prepare now but wait to see how peers proceed before moving decisively. Such companies will lower their risk but find themselves playing a catch-up game.

    Digitization gives service providers that act now the chance to lower delivery costs, offer new services, create new business models, and boost sales effectiveness. Providers that seize the opportunity will not only move ahead in digitization but also elevate their customer relationships.