Content ‘servitization’—what it is and why it matters
27 Oct 2020
6 min read
It may surprise you to know that the Nokia 3310 mobile phone has just turned 20. Launched in September 2000, it quickly became a classic and eventually 126 million were sold worldwide. With a 1.5 inch backlit monochrome graphic LCD screen and a built-in memory of 1KB, its breakthrough technology was that its Instant Message function was three times larger than standard SMS text messages—at 459 characters. And of course it had the enormously popular game Snake.
Much has changed in the last 20 years, and aside from nostalgia, would anyone swap their current smartphone for one now? Of course they wouldn’t. Mobile technology has moved on massively and the Nokia 3310 is now horrendously outdated—its technological prowess swiftly superseded.
Across the board technology continues to advance at such a pace that many products find themselves in the same situation as the Nokia 3310—becoming outdated if not obsolete before long—which is a problem if you are a manufacturer trying to sell them.
Why ‘servitization’ is the future
As products become ever more sophisticated and connected, and customer expectations of what IoT products can do soar, many manufacturers are recognizing the need to adopt a Product-as-a-Service business model.
Pioneered by Rolls Royce in the 1960s with its ‘Power-by-the-hour’ Viper engine, more and more companies can see that a different, more sustainable business model is needed – one that moves away from the idea that ‘we make products’ to ‘we deliver services’.
‘Servitization’ helps extend the operational lifecycle of products and introduces additional services that can be offered throughout the lifetime of the product to add value for the customer—such as Predictive Maintenance (PdM). Servitization not only benefits customers—it also boosts company profits and increases market value. The average EBIT profitability (operating result after depreciation) of services is at many companies 2-5 times higher than just product sales, and a long-lasting US research study shows that stock-listed companies that adopted servitization have a higher market value.
However, although 75% of manufacturing companies expect that servitization will dominate their future, less than 30% of manufacturing companies have a servitization strategy.
So why isn’t every manufacturer doing it?
Walk before you run
The most obvious reason is that it is far from easy and making the changes to your business model, your organization, and the way you operate takes time—you can’t run before you’ve learnt to walk.
Content has a critical role to play in the customer experience and the shift to Products-as-a-Service, but many organizations face significant challenges before they are able to deliver the digital first strategy that is needed.
Many content teams remain rooted in the world of print. Content production processes and workflows that have worked very effectively for print over the decades are struggling to meet the new demands of a digital world. And as the volume of all forms of content that are needed rises, this approach is increasingly becoming unviable.
For many companies, content production is still product-centric, and more often than not, siloed by individual products or product areas—usually with their own processes, systems and ways of doing things.
Content production has understandably mainly been driven by the aim to create, manage, translate and publish content as easily and cheaply as possible. The primary goal is cost reduction rather than the added value approach that is needed if companies are to make the most of the opportunities servitization creates.
So how do companies overcome these challenges and evolve their content production to meet the needs of a Products-as-a-Service company?
Make your content intelligent
Intelligent content forms the bedrock of content production and delivery in organizations that have digitally transformed themselves.
Intelligent content is content that becomes a valuable business asset. It is semantically rich—tagged with information that makes it easy to find and analyze to uncover insights. Intelligent content is modular—written and stored in small chunks (or topics). These modular chunks can be reused in a variety of outputs. Each chunk is its own ‘single source of truth’, thus making it easy to write, reuse and update.
Intelligent content is separate from output format, so you can use the same content in a variety of contexts, display it on a variety of devices, while still maintaining the single source of truth.
And intelligent content shines when it is centralized across the organization—without the barriers of departments.
Align your content processes
To successfully implement content servitization you need to align your content processes to deliver the right information to the right person or machine, and use the right information from the people and machines at the right moment.
The shift to content servitization doesn’t happen overnight, but the more you can close the gap between People, Process and Products, the more efficient you become at providing Products-as-a-Service.
Our solutions help organizations with the journey from making products to delivering services. With our intelligent content systems, we can help speed up multilingual technical content production, and enhance document authoring, management, review, translation and distribution.
You can find out more at tekom, where you can learn more about how our language and content technology can help power your content and localization needs.
André Schlotz
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