How well are companies prepared for changes in the market environment due to digitalization?
Changing customer requirements, new, service-based business models, digitalization and sustainability will be the drivers (not only) for service. The resulting effects on technologies and processes, but also on corporate culture, are opening up new opportunities in service. In terms of service in particular, many OEMs are facing a transformation process. How well prepared are companies for these changes?
For the State of the Market Report 2022, logicline surveyed OEMs, including many mechanical engineering companies of different sizes and industries, on current challenges, expectations and solutions in the service sector. Despite the considerable range of companies surveyed, a surprisingly uniform picture emerged. All participating companies see great potential in the implementation of digital after-sales service offerings.
Specifically, the hope is:
- Optimize processes and offerings with regard to digitalization
- Increase the profitability of service offerings
- Improve customer experience and customer loyalty
- Strengthening your own market position in the long term
However, companies face a number of challenges when implementing these ambitious goals. Like other comprehensive transformation processes, the introduction of digital services can clash with existing structures and cause internal resistance. Setting up sustainable and, above all, scalable systems also requires specialist knowledge and expertise that sometimes still needs to be built up within the company. In addition, there are complex data protection and security requirements, especially in an international context. There is often a lack of an adequately formulated strategy: what concrete (monetary) benefits can the service offering bring for customers and the company itself?
There is often a lack of an adequately formulated strategy: What concrete (monetary) benefits can the service offering bring for customers and the company itself?
Four characteristics are essential for the successful introduction of digital after-sales service offerings
The participants in the State of the Market Report have found or prepared various concrete solutions to these challenges.
However, they all have four characteristics in common that are seen as essential for the successful introduction of digital after-sales service offerings:
- The change project must be supported and driven forward by the management and leadership team
- Digital after-sales service must be embedded in a comprehensive digitalization and data strategy
- Implementation takes place step by step with modular applications that are scalable and also contribute to the corporate vision in the longer term
- Customer requirements and problems are the focus of development and are continuously verified and implemented
If these requirements are met, digital after-sales service offerings have the potential to act as an effective and sustainable counterbalance to shrinking or volatile sales of new hardware products. Especially in times of economic uncertainty, service offerings provide security and stable profit margins far above those of the traditional product business. Sooner or later, digital service solutions will therefore become indispensable for the business models of mechanical engineering companies.
Digital after-sales services enable resilience, strengthen customer loyalty and open up new sources of revenue for the mechanical engineering industry.
