By Zena Wood and Phil Godsiff
‘Servitisation’ represents a transformation in an organisation’s business model and a major change in how they earn money, as the organisation moves from a product-based offering to one based around services. Digitally Enhanced Advanced Services (DEAS) are enabled by transformative digital technologies such as Artificial Intelligence (AI), Data Analytics and Machine Learning.
The use of servitisation has mainly been found within manufacturing. For example, Rolls-Royce’s ‘Power by the hour’. Rolls-Royce earn ongoing income from the usage of their aero-engines (which provide power and thrust and keep the plane flying), rather than through the sale of the engine to the aircraft manufacturer. However, examples are beginning to be considered in other sectors. Servitisation is a journey, and companies can begin to add service-based offerings to complement current offerings. In 2007, Netflix added a streaming service to its DVD sales and rental business. This allowed customers to pay for the ability to stream media via a subscription, enabling revenue from usage not from sale.
The EPSRC-funded DEAS Network Plus brings together a vibrant community, which will position the UK as the internationally leading research hub for Digitally Enhanced Advanced Services. Over the last two years, the Network has funded collaborative research projects between academia and industry in manufacturing, transportation, charity/voluntary and financial services. For each sector, a research agenda has been produced which highlights the research priorities for each of the relevant sectors. Our charity sector research agenda will be published April.
We are now working to identify the common themes that exist between sectors, to establish sector-agnostic principles of servitisation. These will be important for those organisations making the servitization journey. While servitisation began in the manufacturing sector, and the sector offers a good example of practice, we now understand that this is not the only business model (we will be presenting more work on this at the Spring Servitisation Conference 2021).
To help explore the use of servitisation and DEAS outside manufacturing, the DEAS Network Plus will be hosting a special session at the seventh Competitive Advantage in the Digital Economy (CADE) Conference. CADE 2021 will be an exclusive online two-day event, bringing together academics and practitioners to discuss the challenges of the digital economy and present the latest cutting-edge research. The DEAS special session will focus on the relation between DEAS and the four themes of the conference (resilience, sustainability and trust, and privacy) outside of manufacturing. More information about the session, and the call for papers on the Warwick University website.