To remain competitive, many manufacturers are moving from product models to service models, giving their customers more options with greater flexibility and services. A move from a traditional product-centric delivery model to a more service-centric one enables manufacturers to differentiate themselves through service delivery. This digital transformation, known as servitisation – which covers the bundling of goods, services, support and knowledge – enables manufacturers to realise new revenue streams and to improve customer outcomes.

This servitisation of manufacturing manifests itself in two very distinct ways:

Customers want outcomes, not products

Forward-thinking manufacturers are now selling products with built-in monitoring, support and quick replacements. Customers want products to work all the time and now expect the ability to offer maintenance and support that works intelligently and with quick turn arounds. The challenge for an organisation is setting up the infrastructure and the stream of data from their products to allow intelligent and predictive maintenance to meet growing demands.

Customers expect everything to be online and seamless and they expected it yesterday

Global competition driven by improved infrastructure means your customers now have a wide range of choice when buying almost anything. This leads to raised expectations – many organisations are differentiating themselves with their ability to buy online with rapid delivery timescales, and this isn’t just limited to B2C. To compete in this market, manufacturers need to raise their game and transform their entire production, delivery and ordering processes. They need to be able to quickly gather customer requirements and then deliver the finished product as soon as possible. This inevitably requires high levels of automation, data and streamlined processes.

Technology to enable servitisation

Using technology allows manufacturers to gain greater insight into a product’s performance. The data captured can then be used to drive servitisation, whether it’s modifying the product to ensure greater performance or arranging a replacement for the customer – an Enterprise Resource Planning (ERP) system like Microsoft Dynamics 365 for Finance and Operations is intrinsic to this.

Microsoft Dynamics 365 for Finance and Operations is the first step towards servitisation

Microsoft Dynamics 365 for Finance and Operations is Microsoft’s back-office business application, built on Microsoft Azure cloud services. It unifies financials and business operations across finance, manufacturing, supply chain, warehouse, stock and transportation management with an intelligent and intuitive user interface for running modern global enterprises.

In particular, the ability to connect Dynamics 365 for Finance and Operations with Dynamics 365 for Field Service and Microsoft Azure IoT services, empowers manufacturers to deliver a service-led model.

Learn how connected, intelligent systems are driving the servitisation of manufacturing in our guide The Future of Manufacturing with Microsoft.

Find out more about how Incremental is helping manufacturers understand and exploit today’s Microsoft technology.