Entytle recently had an opportunity to meet with almost 50 EU Aftermarket Service leaders. They came from a variety of industries, domiciles, complexity of product and maturity of Aftermarket Service businesses. These leaders have all been in the manufacturing industry for many years – average tenure was 25+ years! In other words, they’ve “seen a lot of movies” in their professional lives.
Our objective was to understand priorities, motivations and pain points for these leaders. While our area of interest was growth strategies and execution plans, it became very clear that there were 2 other pressing items on their minds: digitization and culture change.
Much like the last big digital disruption- the internet- Service leaders and their CEOs recognize that the emergence of data driven business models, cloud based applications and increased use of analytics across the board is going to change the business as they know it. No longer will their customers be content with “wrench turning” aspect of Aftermarket Service, but instead they are demanding a level and type of service they experience as consumers. And this is going to be possible only with a concerted focus on data and software.
This will require transformation of not just the Service business but the C-Suite as well. Customers are beginning to demand outcome based pricing, on-demand services and sharing of risk. While some of these models have been around for a while, implementation has been spotty at best. Some industries and businesses are more sophisticated and mature, but the vast majority are woefully unprepared for this transformation.
Everyone we spoke to described this as a journey; and make no mistake, it is a multi year journey. Instead of being overwhelmed and daunted by the task at hand, the pragmatic and forward thinking leaders have prioritized a series of “experiments” that they can execute to prototype, learn and rollout across their market.
If there was a single message we took from our discussions, it was this: be clear about your value proposition, develop a digital strategy to deliver it, and start executing today. Every day you wait is a day you allow someone else to disrupt you.