Manufacturers are being challenged to move from once-successful product-centric strategies to approaches that are more service-oriented. When successful, the results include significant, new revenue streams; increased customer engagement and delight; greater efficiency and cost savings; and value-added offerings.

1. #DigitalTransformation
How Machine Builders Can
Transcend the Service Dilemma

2. To better understand the role of digitization in the
manufacturing industry, Cisco Consulting Services
undertook a global survey of 625 senior
IT decision makers in 13 countries.

3. In a climate of digital disruption and global market pressures,
many manufacturers want to differentiate with new
service-oriented revenue models.
86% say the transition from product-centric to service-oriented
revenue models is a core part of their growth strategies.

4. A focus on service has many potential benefits:
• New and significant revenue streams
• Increased customer engagement and delight
• Greater efficiency and cost savings
• Critical value-added offerings
• Disruptive new business models
• Ability to charge for business outcomes

5. However, the transition to service revenue models is not taking
place fast enough. There a disconnect between the size of the
opportunity and how much is being captured.
Only 29% of respondents indicated that services would
grow faster than products in their firm.

6. Complexity and a lack of digital capabilities are
holding firms back, giving rise to a Service Dilemma.
Drive to improve
profitability
New services
increase
complexity
Invest in
new services
Complexity
creates profitability
challenges
1
2
3
4

7. We need to be able to not only manufacture a product, but we
also need to be able to set up the IT solution. We need to combine
manufacturing and IT and we also need to transform the model
from a pure manufacturing model towards an operator model.
Dirk Slama, Director, Business Development,
Bosch Software Innovations

8. Connected Machines can bring services and digital
technologies together. For industrial equipment makers,
digitization enables the creation of new
applications on the plant floor.

9. The top inhibitor to transitioning to a service model is the difficulty
of managing a “two-front war”—products and services
simultaneously. Respondents cited managing existing and new
business simultaneously as their biggest challenge.

10. Beginning the journey from product-centric model to
Digital Transformation will create the most value.

11. Want to learn more?
Download the whitepaper.
The Digital Manufacturer:
Resolving the Service Dilemma