AI named #1 Technology Needed to Derive Tangible Business Value from Shift to Servitization
Research reveals that AI (52%), automation (51%) and machine learning (49%), are the foundation for creating business value.
Enterprise Asset Management (EAM), Field Service Management (FSM), and end-to-end business connectivity are seen as further catalysts to making the servitization shift.
IFS, the global cloud enterprise software company, has released the first sets of results of its research* into the role of technology in realizing business benefits and driving value as companies shift to a servitized business model. The research polled 2,000 senior decision-makers – VP and above – in USA, UK, France, Germany, Japan, Nordics, and the UAE – across Manufacturing, Services, Telecoms, Energy, Utilities & Resources, Construction & Engineering, and A&D industries.
43% of respondents stated that the momentum behind shifting their business model to a servitized one remained a clear priority for executives. The research also reveals a divide between the “Leaders” and “Laggards” in completing the move, 19% and 23% respectively. The primary cause for some organizations’ slow progress in building momentum in their organization is the need to clearly define the impact on their workforce, processes, and technology landscape.
Across industries, AI has become the essential technology for accelerating the servitization shift and value realization by improving operational efficiency (28%), capturing new customer segments or targeting new markets (28%), increasing customer satisfaction (27%), improving customer retention (26%), and securing higher profit margins (25%).
The urgency behind building AI capabilities is most prevalent in the Manufacturing and Services sectors (58%), followed by A&D (51%), Telecoms (50%), Construction & Engineering (48%), Energy, Utilities & Resources (48%). Driving innovation and continuously building differentiation within their respective markets continue to be seen as the foundation to increase revenue growth and profitability.
The importance of financial health and driving business resilience are high on the value agenda across the organization, with the CEO (54%) and CFO (49%) leading the charge. The dual leadership behind servitization points to a clear tie between the need to modernize via digital transformation and the financial benefits the board expects to gain from prioritizing customers at the heart of product and/or service design and delivery.
While the executive leadership team is clearly behind the evolution of the business, getting a complete and actionable understanding of the impact of the shift on people and processes (22%) is vital. The CHRO is particularly aware of the potential impact and cites digital technology as fundamental (50%) to managing the change and, specifically, using AI and automation to enhance workflows and processes.
Alex Rumble, SVP of Product Marketing, Analyst Relations and Competitive Intelligence at IFS, commented: “We often hear from customers that digital transformation is not about technology. This research very clearly points to tight alignment between the C-suite when it comes to evolving the business and bringing the organization proactively along the journey.” She added: “Servitization is fundamentally about being customer-driven in the design, manufacturing, delivering and servicing of products and services. The topic has been around several decades, but the technology lacked.”
Rumble concluded: “It is the coming together of servitization and the explosion of digital technologies that has created a perfect storm for companies to harness the power of AI, automation and ML, for example, to re-engineer and streamline their businesses behind customer needs AND deliver business value. That is exciting for IFS.”
*Research of 2,000 senior decision makers across Manufacturing, Service, EUR, C&E, Aerospace & Defense, and Telecoms companies in USA, UK, Germany, UAE, Japan, France and the Nordics, conducted by Censuswide in June 2023.
About IFS
IFS develops and delivers cloud enterprise software for companies around the world who manufacture and distribute goods, build, and maintain assets, and manage service-focused operations. Within our single platform, our industry specific products are innately connected to a single data model and use embedded digital innovation so that our customers can be their best when it really matters to their customers—at the Moment of Service™.
The industry expertise of our people and of our growing ecosystem, together with a commitment to deliver value at every single step, has made IFS a recognized leader and the most recommended supplier in our sector. Our team of over 5,500 employees every day live our values of agility, trustworthiness, and collaboration in how we support thousands of customers.
Learn more about how our enterprise software solutions can help your business today at ifs.com.
CONTRACTOR SUPPLY MAGAZINE
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