Thrive during disruption by growing new digital services

Monetising Service | Panel discussion: How to transform your field service into a profit centre?

Panel discussion: How to transform your field service into a profit centre?

by | Nov 12, 2017 | Monetising Service

Success depends on the level of collaboration and support from all stakeholders.The name of the game is establishing a shared concern and goal first.

During the Fields Service Asia in Singapore, Martin Fischer (Carl Zeiss Microscopy), Chistian Schmid (Belimed), Mikael Lindholm (Telenor Group) and myself had a keynote panel discussion on why field service should be a profit centre or not, what are important obstacles in establishing a profit centre and how to overcome these obstacles.

Some key points we touched are:

  • There are profit-centres and profit-centres. Different companies have different not all established the same level of profit-centre. The basic is having a solid profit&loss statement in which all service revenue and cost are recognised and allocated (management accounting). Next is also being accountable for the profit (governance), which requires having the power to control cost and revenue. This doesn’t necessarily mean you need to have a dedicated service sales team, as long as you can drive which services are being sold, how and for which price.By the way, this also means the service team has its budget to invest and innovate.
  • How you design the profit-centre depends on the business strategy. In cases where service is rather insignificant, and the aim is to grow the service coverage on your installed bases and to monetise these services, it makes sense to increase focus and allow more autonomy in the service department to drive this development and preventing it to drop off the table because of other priorities.However, when you’re transitioning to an integrated offering, like pay-per-use, the focus is not any more on building a service profit, but about integration of business.
  • Development of services will become quite visible. Success heavily depends on the level of collaboration and support from the sales, marketing, R&D, the board and others. So the name of the game is establishing a shared concern, a common goal and aligned strategies.We should become equal partners with the other stakeholders, become entrepreneurial business-leaders, be bold and take ownership towards these stakeholders and being “customer obsessed” like Mikael Lindholm advised.
  • Do not discount services. However, service can be part of an integrated, packaged value proposition, in which service is not invoiced separately. One of the challenges is to always articulate the value of service.

Learn more from like-minded peers

Join the moreMomentum Services Community and Fast-Track your Digital Services


Related Articles

Build a Strong Customer Story in 7 Steps

Many service innovations fail because they do not have a substantial and desired impact for clients. Often, customer insights and value propositions are limited to a description of features and benefits, without considering the outcomes clients desire.

Diversify your innovation to boost growth

Leading manufacturers cover a scope of innovations, searching for opportunities to improve the value they promise their clients, how they deliver the value and how they capture part of the value.

Upcoming events

Stay up to date

Receive the latest insights and updates from our articles, interviews with your peers and ongoing research into best practices.

If you liked this article, you may also like the following articles, on the same topic.

Why it is important to monetise services

Value propositions in manufacturing are becoming more data-driven and more service-oriented. It is critical to generate and capture the new value.

Solve Bigger Customer Problems to Monetise Services and Data

A common mistake is to solve small problems of customers. These are necessary improvements, but will not bring any growth or opportunities to monetise.

Better Articulate the Value to Monetise Services and Data

Too often we see that (new) services, solutions or features are promoted without connecting the dots to their bigger problems.

Panel discussion: How to transform your field service into a profit centre?

Success depends on the level of collaboration and support from all stakeholders.The name of the game is establishing a shared concern and goal first.

Panel discussion: Drive service revenue and growth with personalised services

New technologies offer great opportunities to improve customer experience and perceived value. When done in a differentiating way, this can drive revenue.

Remove Obstacles for your Clients to use your New Offerings and Monetise your Services and Data

If your clients fear or experience too many obstacles to use your new offerings, they will not see your offering as a viable and valuable solution. This will block your commercial success.

Build Internal Momentum to Monetise Services and Data

Launching new advanced services is innovating your business model. This requires internal momentum to monetise these services and data-driven solutions.

Build Your Advanced Service Sales Model

Common transactional sales models do not work for advanced services and solutions with a recurring revenue model. Build your advanced sales model.

Stay up to date

Receive the latest insights and updates from our articles, interviews with your peers and ongoing research into best practices.

OUR VISION and MISSION

More and more manufacturers are growing their digital services. This requires strong and repeatable business innovation capabilities.

With our community, we continuously develop, share and apply new best practices for digital services and radical business innovation.

Services innovation enables manufacturers to thrive and solve our global problems.