What are the biggest challenges with servitisation?

Responses: On behalf of Primary - Jim Morrish , Secondary - Bassam Zarkout

The biggest challenges are probably the commercial and organizational challenges associated with converting a ‘capital sale’ to an ‘operating cost service’. Firstly, there is a significant cashflow impact which must be funded. But more importantly, companies that seek to servitise any equipment that they sell will need to introduce new organisational capabilities, such as customer care and support, billing and arrears processing. Supporting an ongoing relationship with a client (including billing) is very different from simply selling hardware. The upsides are significant though, in terms of the opportunity to get closer to the customer and also upsell new and alternative equipment and capabilities, or potentially to upgrade equipment with new software.

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