A division of a German engineering group, that had traditionally produced and sold large machines for the paper making industry, had built a modest service business totalling less than 5% of the division’s total revenue. Their current service offering consisted of providing spare parts, reactive and preventive maintenance service contracts.
Two senior managers were having difficulties in convincing the board
The company was facing several challenges:
Two senior managers saw several opportunities to grow the service business but were having difficulties in convincing the board of directors to strategically invest in the service business in order to develop its potential.
The service director used the knowledge and tools from the Service Transformation Centre to convince the CEO of the company to invest in growing their service business.
The following steps were taken:
The financial results in the past 5 years have been a sustained double-digit growth with profit margins above the industry average.
The result was that the board of directors understood that customers were expecting more help from the company. They expected help addressing their business challenges such as improving their competitive position with smart outcome-based services, industry knowledge, data and information systems that would help customers to lower production cost by integrating several players in the value chain.
The company has started their service transformation journey by implementing the multi-year strategic roadmap. This contains several projects that required substantial investment, organisational change and the development of new capabilities in the company. The financial results in the past 5 years have been a sustained double-digit growth with profit margins above the industry average.
Get buy in from the top management to change the business model to service: Find the steps enabled by methodologies, tools and coaching available through our Service Transformation Centre.
Don't miss the chance to gain access to Noventum's service expertise and best practices, tools and methodologies, all gathered together in the STC!
Contact us today to discuss how we can support your service business development.