As industries adapt to growing environmental awareness and evolving customer expectations, manufacturers are rethinking their traditional business models. One of the most transformative shifts in recent years has been servitisation, which is a move from selling physical products to providing comprehensive service-based solutions.
Author Nick Saraev
Photo: Freepik
As it prioritises product uptime and performance over one-time sales, servitisation is becoming a main driver of sustainability, profitability, and long-term customer engagement.
Leading manufacturers are already capitalising on this shift, integrating data-driven service models that extend product lifespans, reduce waste, and create more resilient revenue streams.
At the forefront of this transformation is Syncron, whose service lifecycle management (SLM) platform helps manufacturers transition toward servitisation, optimise service operations, and enhance aftermarket profitability.
Sustainability and Profitability Go Hand in Hand
Sustainability is no longer just a corporate responsibility that businesses feel like they have to adopt. It’s now a strategic advantage. According to Syncron’s latest survey of 600 service leaders, nearly 30% of respondents identified sustainability as a top priority in their aftermarket operations.
This growing emphasis reflects the realisation that sustainable practices are not only good for the planet but also good for business.
Servitisation plays a pivotal role in this equation by helping manufacturers maximise resource efficiency, reduce unnecessary production, and offer long-term value to customers.
Instead of promoting a cycle of frequent replacements, servitisation encourages manufacturers to focus on product longevity, repairability, and performance-based outcomes.
Key Drivers of Servitisation
Servitisation is being shaped by a few key factors that are changing the way businesses provide value to customers.
1. Extending Product Lifespan
One of the most significant advantages of servitisation is its ability to extend the lifespan of existing products.
Instead of encouraging customers to replace outdated equipment, manufacturers are now offering preventative maintenance, refurbishment programs, and upgrades that maximise asset value while minimising waste.
Why it Matters
Manufacturers can generate significant revenue from refurbished products. Leading manufacturers testify that up to 30% of their aftermarket revenue comes from refurbishment programs, showcasing the economic viability of extending product lifecycles.
Best Practice
Manufacturers can implement predictive maintenance solutions powered by AI and IoT to proactively detect equipment issues before they lead to costly failures, reducing downtime and unnecessary replacements.
2. Shifting Mindsets: Overcoming Traditional Thinking
The transition to servitisation requires a fundamental shift in mindset, both internally within organisations and externally among customers.
Internal Transformation
Companies must align shareholder expectations with long-term sustainability goals, moving away from a sales-driven approach to a service-based business model.
Customer Adoption
Businesses accustomed to purchasing products outright must adjust to the subscription-based or performance-driven service models introduced by servitisation.
To facilitate this shift, Syncron’s Service Lifecycle Management (SLM) platform enables manufacturers to seamlessly manage service contracts, fostering transparency, efficiency, and alignment between business objectives and customer needs.
3. Data-Driven Optimisation for Efficiency
The success of servitisation hinges on high-quality data and robust measurement systems. Without accurate insights into asset performance, customer usage patterns, and maintenance requirements, it becomes difficult to optimise service offerings.
Why It Matters
Data-driven service models allow manufacturers to fine-tune operations, anticipate service needs, and optimise resource allocation, improving both efficiency and customer satisfaction.
Best Practice
Implementing AI-driven analytics can help companies predict wear-and-tear patterns so maintenance occurs before failures arise.
Syncron’s advanced analytics tools play a major role in service intelligence, enabling companies to proactively reduce costs, improve efficiency, and drive sustainability.
4. Optimising Supply Chains to Minimise Environmental Impact
Efficient supply chain management is key to minimising carbon footprints in servitisation models. Companies that embrace CO2-based inventory optimisation can significantly reduce their reliance on air freight by accurately forecasting demand and strategically placing stock in global warehouses.
Case in Point
Optimising logistics lets manufacturers decrease emissions, reduce operational costs, and improve service reliability.
How Syncron Helps
Syncron’s inventory optimisation tools position spare parts and critical service components exactly where they’re needed, cutting down unnecessary shipments and transportation inefficiencies.
5. Improving First-Time Fix Rates: Enhancing Service Efficiency
In traditional service models, repeat visits from field technicians result in wasted resources, increased costs, and customer dissatisfaction. Improving first-time fix rates is a crucial aspect of servitisation, ensuring that repairs are done right the first time.
Solution
Remote diagnostics and AI-powered technician enablement tools help service teams access the right information instantly, eliminating the need for unnecessary follow-ups.
Industry Best Practice
Companies leveraging technician training platforms, AI-assisted diagnostics, and real-time service knowledge bases see a marked improvement in service efficiency and customer retention.
Through Service Lifecycle Management solutions, Syncron enables service teams to access mission-critical information in real time, allowing for better service execution and increased customer trust.
Overcoming Challenges in Servitisation
While servitisation offers clear benefits, companies face key challenges in adopting this model. Addressing these hurdles requires strategic planning and the right tools.
Resistance to Change
Transitioning from product sales to service models can meet internal pushback.
Solution: Implement training programs and align incentives with service-driven goals to encourage adoption.
Complexity in Service Contracts
Service agreements introduce new operational and pricing complexities.
Solution: Establish clear contractual frameworks with well-defined SLAs to ensure transparency and efficiency.
Data Silos and Fragmentation
Disjointed data across multiple systems can hinder service optimisation.
Solution: Use centralised knowledge platforms to create a single source of truth, improving data accessibility and decision-making.
Once they’ve tackled these challenges head-on, businesses can fully leverage servitisation for long-term growth and customer value.
The Future of Servitisation
The shift toward service-oriented business models is no longer optional—it’s essential for long-term success. As sustainability becomes a regulatory and customer-driven priority, manufacturers must proactively embrace servitisation to stay competitive.
“To be more servitised today is a competitive advantage. In 10 years, not offering it will be a competitive disadvantage,” notes Luke Huckerby, Director of Strategic Business Development at Syncron.
By adopting predictive maintenance, AI-driven service management, and data-centric strategies, companies can enhance customer value, drive profitability, and reduce environmental impact.
With Syncron’s Service Lifecycle Management platform, manufacturers can seamlessly transition to servitisation, ensuring long-term resilience and growth.
Source: “Profit Meets Purpose: How Leading Manufacturers are Driving Sustainability in the Aftermarket”.
