The construction industry has long been defined by hard, manual labour, but with the shift from mechanical systems to data-driven processes and electrified equipment, we’re seeing a transformation in how businesses approach service, maintenance, and operational efficiency.
Author Nick Saraev
Photo: Freepik
This transition isn’t just about adopting new technology—it’s about rethinking entire business models to align with sustainability, productivity, and customer expectations.
At the Sustainability in Service 2024 — Power of 50 event, Holger Pietzsch, Director of Business Development at Moog Construction, explored how electrification, digitalisation, and modular energy solutions are redefining service models in construction.
His keynote addressed the complexities of integrating these advancements and the strategic considerations businesses must navigate to stay ahead.
The Traditional Model of Construction Services
For decades, the construction industry followed a familiar cycle:
Sell machines → Build an installed base → Generate service revenue → Reinvest in better machines
This model was largely mechanical and reactive, with servicing driven by breakdowns rather than predictive insights. Companies relied on an established installed base to sustain long-term profitability, but emerging trends in leasing, rental services, and digitalisation have disrupted this approach.
Today, the industry is shifting towards a more dynamic framework—one that prioritises data, connectivity, and sustainability over traditional ownership and maintenance models.
The Rise of Data-Driven Services
Connectivity has fundamentally changed the role of service in construction. Telematics, IoT sensors, and remote monitoring provide real-time insights into machine health, enabling predictive maintenance and reducing unplanned downtime.
However, Pietzsch highlighted a key challenge: monetising data-driven services remains an uphill battle.
Initially, equipment manufacturers expected customers to pay a premium for access to telematics data. The reality was different. Many saw this data as an expected feature rather than an added-value service.
Instead of generating significant new revenue streams, telematics became an essential enabler for improving internal operations, supply chains, and service efficiency.
The Challenges of Value Capture
Pietzsch underscored a critical lesson from his experience: customers don’t pay for data; they pay for outcomes.
- While telematics improves fleet visibility, many construction firms view it as a cost rather than an investment.
- Predictive maintenance reduces failures and eliminates major repair opportunities that previously generated revenue for service providers.
- Machine control systems improve efficiency, yet they also reduce equipment wear, limiting the need for frequent servicing.
These advancements, while beneficial to customers, have forced equipment manufacturers and service providers to rethink how they capture value in a digital, data-driven ecosystem.
Electrification and Its Impact on Service Models
Electrification is another force reshaping the industry. Transitioning from diesel-powered machinery to electric and modular power solutions offers environmental benefits but also requires a new approach to service and ownership models.
Why Electrification Matters
- Reduced Emissions → Construction sites contribute significantly to global CO₂ emissions. Electrification is a key step toward sustainability.
- Lower Operating Costs → Electricity is often cheaper than diesel, and electric motors require less maintenance.
- Easier Integration with Automation → Electric machines are simpler to program and control, paving the way for autonomous construction sites.
Despite these advantages, adoption has been slower than expected. A major barrier is the lack of supporting infrastructure. Charging stations, modular energy solutions, and regulatory incentives are still developing.
Modular Energy Systems: The Future of Construction Power
To address the challenges of electrification, Pietzsch introduced the concept of modular energy solutions, which is a flexible approach to power management that decouples batteries from individual machines.
Rather than integrating batteries into each vehicle, modular systems allow energy to be shared across multiple applications, increasing utilisation rates and reducing costs.
This concept mirrors the shift from owning a cow to simply buying milk. Contractors don’t need to own batteries anymore, and instead just need reliable access to power.
Key Benefits of Modular Energy Solutions
- Scalability → Batteries can be swapped between different machines as needed.
- Lower upfront costs → Reduces the financial burden of full electrification.
- Higher utilisation → Shared energy modules improve efficiency across multiple projects.
The Roadblocks to Industry Transformation
Despite the clear advantages of data-driven services and electrification, several challenges remain.
1. Resistance to Digitalisation
Many construction firms still operate with analogue workflows. While digital solutions promise efficiency gains, the transition requires significant investment in training, cybersecurity, and infrastructure.
Solution: Provide turnkey digital solutions that integrate seamlessly into existing workflows, minimising adoption frictions.
2. Uncertain Business Models for Electrification
While electric machines offer long-term savings, high initial costs and concerns over battery longevity deter widespread adoption. Customers remain hesitant due to uncertainty around resale value and long-term performance.
Solution: Offer battery-as-a-service models, where customers pay for energy usage rather than owning battery systems outright.
3. Lack of Industry-Wide Coordination
Pietzsch emphasised that electrification cannot succeed in isolation. It requires simultaneous adoption across the entire ecosystem. Without coordinated efforts from government bodies, equipment distributors, and end-users, the transition remains slow.
Charging infrastructure, regulatory support, and financial incentives are all necessary to drive large-scale adoption.
Solution: Policymakers must provide subsidies and tax incentives, distributors must support serviceability for electric machines, and contractors must shift towards modular energy solutions to fully realise the benefits of electrification.
4. Misalignment Between Service Offerings and Customer Needs
Pietzsch stressed that many businesses struggle to align their service models with customer priorities. Equipment providers often focus on product features, while customers care about cost savings, efficiency, and risk reduction.
Solution: Adopt a “Jobs-to-Be-Done” approach, featuring design services that directly address customer pain points rather than simply selling technology.
The Future of Construction Services: A Strategic Shift
As the construction industry evolves, businesses must rethink their value propositions, service models, and revenue strategies.
- Move from selling machines to providing solutions → Service providers should focus on outcomes, not just equipment.
- Embrace modular energy and digital transformation → Scalability and flexibility will be key to long-term sustainability.
- Redefine ownership models → Leasing, rental, and pay-per-use models will replace traditional asset ownership.
Pietzsch’s message was clear: electrification, data, and modular energy systems are the future of the construction industry.
Companies that adapt to this shift will be better positioned to compete in an increasingly digital and sustainability-driven marketplace.
