The pandemic was a business-altering event for companies across industries. For leaders looking to future-proof their business, identify new revenue streams, and take advantage of technology to drive operational efficiency, servitization provides a timely and strategic path forward.
Especially when considering recent research from Salesforce in a survey of 750 companies across the globe. A key insight being C-suite leadership priorities have shifted directly as a result of 2020 volatility. In particular, leaders are now more focused on an approach for:
- New service offerings to generate incremental revenue or recover lost revenue
- Moving to the cloud to support unique emerging business models
- Digital transformation as a roadmap for long term success
- ERP upgrades to improve operations, customer satisfaction, and revenue
Read our latest guide called The Beginners Guide to Servitization on Salesforce to learn more about this hot topic in manufacturing. The guide helps leaders with an introduction to:
- What is servitization and equipmentization?
- How to apply it to a business?
- Which technologies are critical for implementing it successfully?
What is Servitization?
Servitization is the process of building new revenue streams from services.
More specifically, servitization is the nexus between hardware-centric companies providing value-added services over pieces of equipment and service providers leveraging specialized hardware for better service delivery. Both business types need a nimble and scalable platform to have full control of the physical hardware they provide to their customers to successfully support these approaches.
Notice the interesting two way street that servitization provides—for service companies to expand further into the value chain via hardware or “equipmentization” and hardware companies to expand into new service offerings. To illustrate this further:
Implications for Management
While adding new services has many benefits, it absolutely comes with potential short term challenges to overcome. However, in a post-pandemic world many leaders have decided the mid to long term benefits greatly outweigh the short term inconveniences.
What are some of the most likely challenges that lie ahead when considering servitization? Check out our guide to see our take which covers HR, operational, and leadership implications.
Not sure how servitization and equipmentization would work on Salesforce? That’s where we come in. Ascent Solutions extends the power of Salesforce with features that enable customers to gain a 360 degree view of their operations which is tailor made for these use cases. Examples include:
- Work Orders. From product inspection, installation to equipment maintenance or repair and other types of service requests, while tracking labor, parts consumption to invoices. Enable users to create and manage work orders for field service operations, view knowledge articles, and track SLA compliance with milestones.
- Demand Planning. Utilize the Master Planner to monitor real time demand from minimum on hand stock by location and orders fulfillment requirements. Receive proper replenishment guidance to quickly create purchase and production work orders.
- Purchasing Management. Create purchase orders to meet stock levels, as well as current and forecasted demand. Drop ship directly to your customer. Select the right supplier based on price and product availability. Receive to a specific location or lot to automatically adjust inventory and establish the cost of goods sold.
- Serial and Lot Management. Monitor inventory by serial, lot and batch to track expiration dates or coordinate quality control for medical supplies, food products or other regulated industrial items. Full lifecycle serial and lot tracking history from receipt to fulfillment, including tracking assets at customer locations and reverse logistics by serial and lot.
- Reverse Logistics. Simplify complex reverse logistics processes including returns from customers and returns to vendors. Returns, swaps and replacement orders are all possible plus access warranty information for decision making, while enabling users to return products or materials to their final destinations.
- Financials & Accounting. Allow users to manage and track financial journals that record the impact of all inventory movements. These journal entries can be exported or directly integrated into the accounting platform for real time end-to-end lead to cash management. Full customer payment cash matching and Accounts Receivable (A/R) management can be done on the Salesforce platform and integrated into the accounting system, or done in the accounting system and shown in Ascent for a full customer 360 degree view of customer account financials.
The pandemic has clearly shown us that inaction on exploring new business models and innovations can be dangerous for the viability of a business. Now is the time to embrace smart change and create a new path forward to be included in the next generation of successful companies.
Make sure to check out our guide for more information about servitization and our Salesforce native apps can be found on the AppExchange: Ascent ERP, Ascent IM, Ascent OM, Label Anything, and Rental or email us at firstname.lastname@example.org.