Many services businesses struggle when it comes to monetising advanced services, like you have remote services, predictive maintenance, and other data-driven services.
Now, one of the important insights is that not all critical service innovation indeed is for growth. Some innovations are just necessary to defend your current business.
So, how do you recognise these sustaining innovations in your industry?
Transcript
Hi there, I just wanted to share some insights coming from the Executive Service Roundtable and Peer Group Meetings of the moreMomentum Services Community.
Many services businesses struggle when it comes to monetising advanced services, like you have remote services, predictive maintenance, and other data-driven services.
Now, this is a strategic challenge, as a trend is clear:
Increasing investments and cost levels to build and maintain new digital and data driven capabilities. Now how to get some return on these investments?
Now, one of the important insights is that not all critical service innovation indeed is for growth.
Some innovations are just necessary to defend your current business. Without these sustaining innovations, you run the risk of losing your competitive power, like pricing power, your market share, or your customer retention. This all happens by responding to the developments in your industry, and basically protect your license to operate.
Now, other innovations are indeed aiming for growth. They either targets an increasing market share, or they target to serve other markets or market segments, or they target to solve other customer problems, which might be pretty new.
So, how do you recognise these sustaining innovations in your industry? Now each industry has several trends on improving performance, I like to call the "currency" in your industry.
We all recognise how we get more and more safety features, for example, in your cars, or get more and more functions and features in the software, Office software like Word or Excel, etc. Let's say we get every year 5% or 10% more value from these new features. And the price doesn't necessarily go up.
Maybe they even decrease a few percentage every year.
This is all the expected in your industry. So what are the currencies in your in the service industry? So what is the expected innovation.
That could be more remote with your services, be more predictive in your maintenance, be more predictive in your service offerings and service with your customer interaction, and increasing the uptime of the assets or improving the efficiency of the operations of your customers or improving the overall equipment effectiveness.
So what is really the ongoing trend which all the suppliers are and your competitors are targeting? Which your customers are seeing as the expected and maybe not necessarily want to pay more for, but still expect you to provide it.
What I think we all should do more is to clearly distinguish the innovation for growth versus the innovations to sustain your current business:
- when it comes to your strategic assessment,
- when it comes to defining your strategic objectives,
- when it comes to developing and aligning innovation strategies and approaches,
- • and also when defining the internal messaging, when to do to get people on board for the different innovation initiatives and also to get the funding and the buy in from stakeholders.
So, my two cents coming from the Executive Service Roundtables and our Peer Group Meetings.
Good luck with it and see you on the next one.
Take care
Jan van Veen : Apr 26, 2018 2:52:00 PM
