From Legacy to Leadership: Why Data Modernization is the Cornerstone of Servitization Success

The Servitization Imperative

Picture this: a technician arrives on-site to perform a critical repair but doesn’t have the right parts or access to the latest service history. It’s not their fault—the company’s outdated data systems failed to flag the issue. The outcome? A missed SLA, an unhappy customer, and a service team scrambling to recover trust.

For many organizations, this scenario is all too familiar.

Servitization—the transformation of standalone products into integrated product-service solutions—has revolutionized industries. While it offers exceptional value for customers and new revenue streams for companies, it also demands precision and efficiency, especially when it comes to data.

“Data modernization is the backbone of all digital transformation,” says Johann Diaz, founder of the Service Revolution Academy. “Servitization is a current opportunity for so many organizations—turning their products into services using new technologies.” Yet, outdated data systems and fragmented processes are holding businesses back from realizing this potential.

How can organizations move past these barriers? And what does it take to modernize effectively?

The Cost of Outdated Systems

Legacy systems, often characterized by silos and limited scalability, struggle to meet the demands of modern service delivery. They obstruct real-time insights, hinder proactive decision-making, and create operational blind spots.

“Traditional data management often doesn’t allow you to see all your growing datasets in one place,” explains Luisa von Kleist, Advisory Solution Consultant at ServiceNow. “This can block your customer service teams from seeing the full picture, making them less able to proactively solve issues that arise.”

For service teams, the impact is tangible. Technicians lack the details they need to complete jobs efficiently, while leaders are left without the data needed to anticipate customer needs or optimize operations. Customers, meanwhile, are increasingly frustrated by delays or missteps in service delivery.

Johann Diaz sees this problem as widespread: “Many, if not most, organizations have not implemented a master data strategy.” Without this strategic foundation, companies struggle to connect data across the customer lifecycle, losing valuable insights and failing to meet customer expectations.

What’s the solution? Modernization—a strategic overhaul of data systems and processes to build the foundation for servitization success.

The Modernization Blueprint

Data modernization isn’t just an IT project—it’s a business transformation. Here’s how organizations can move forward with confidence:

1. Assess Your Current Data Landscape
   Modernization starts with understanding your baseline. Evaluate your current data assets, infrastructure, and processes. Where are the gaps? What’s holding you back? Johann emphasizes, “Conducting a thorough assessment helps identify both risks and opportunities.”
2. Break Down Silos
   Disconnected data sources are a persistent issue. Luisa stresses the importance of integration: “Make sure all your data sources are fully integrated. This allows you to consolidate data from disparate locations and standardize it, improving quality and transparency.”
3. Adopt Modern Platforms
   Outdated systems lack scalability. Transitioning to cloud-based platforms or implementing data brokering solutions can bridge gaps and improve orchestration. Johann notes, “Even if you can’t migrate entirely, over-arching systems can extract and connect siloed data effectively.”
4. Strengthen Data Governance
   Trust and transparency are non-negotiable. Validating data sources, ensuring compliance, and establishing governance frameworks are essential. Luisa adds, “You can’t successfully modernize without understanding your data journey.”
5. Invest in Change Management
   Modern systems need people who understand how to use them. Johann advises, “Educate staff on new data structures, systems, and processes to ensure smooth adoption and utilization.”

Key Insight: “Only with a best-practice approach can you deliver for your customers and retain their trust.” – Luisa von Kleist

A Holistic Approach: Beyond Departmental Silos

One of the most common pitfalls in modernization efforts is tackling the problem in isolation—upgrading systems department by department without a unified strategy. While this approach might yield short-term gains, it falls apart when viewed through the broader demands of servitization.

“All of the above must align to an overarching framework around service transformation,” Johann cautions. Without this alignment, modernization efforts risk becoming fragmented and ineffective.

To succeed, companies must think holistically. Data modernization should align with the entire customer lifecycle, ensuring every data point contributes to a seamless, integrated service experience.

What’s at Stake?

The risks of delaying modernization are clear. Organizations stuck with outdated systems face inefficiencies, frustrated customers, and a competitive disadvantage. Those who address the problem piecemeal risk creating patchwork solutions that fail under the weight of growing customer expectations.

But the rewards of modernization are just as compelling. Real-time insights empower businesses to anticipate customer needs. Integrated systems streamline operations and enable faster, smarter decisions. Most importantly, customers notice—and reward—businesses that deliver seamless, proactive service.

“Data modernization isn’t just an operational upgrade—it’s a strategic necessity,” Johann asserts.

Leading the Way Forward

Servitization is a bold opportunity—but only for organizations willing to modernize their data infrastructure.

Modernization is about more than technology; it’s about rethinking how organizations create value. For service leaders, this moment is a chance to drive transformation and ensure their companies are ready for the demands of tomorrow’s service landscape.

Will you take the lead?