Artificial Intelligence as a Vital Technology for the Transition to Servitization
IFS Research on the Role of Technology in Servitization
IFS, a global Cloud Entreprise Software company which is exclusively represented in Italy by FI Solutions, has released the first results of a research study examining the role of technology in realizing business benefits and creating value in the context of adopting service-based business models.
The IFS research reveals that:
- IFS research reveals that artificial intelligence (52%, automation (51%) and machine learning (49 %) are driving business value creation;
- EAM, FSM and end-to-end connectivity are seen as additional catalysts for the shift to servitization.
In detail, 43% of respondents said that advancing the transition to a services-based model remains a clear priority for managers in the enterprise. The research also found a significant difference between “leading” companies, accounting for 19%, and “lagging” companies, making up 23%, in their ability to complete this transition.
The Importance of AI Across Various Sectors
Across all sectors, AI has emerged as an essential technology for accelerating the shift to servitization and realizing business value by improving operational efficiency (28%), acquiring new customer segments or targeting new markets (28%), increasing customer satisfaction (27%), improving customer loyalty (26%), and delivering higher profit margins (25%).
The urgency in developing new artificial intelligence capabilities is most prevalent in the manufacturing and service sectors (58%), followed by Aerospace and Defense (51%), Telecommunications (50%), Construction and Engineering (48%), and Energy, Utilities, and Resources (48%). The drive for innovation and continued differentiation within their respective markets continue to be seen as the basis for increasing revenue growth and improving profitability.
The Role of Corporate Leadership in Servitization Processes
Financial health and business resilience are among the organization’s top priorities, with the CEO (54%) and CFO (49 %) leading this initiative.
The presence of joint leadership supporting servitization indicates a clear link between the need to modernize through digital transformation and the financial benefits the board expects to achieve by putting customers at the center of product and/or service design and delivery.
Although the executive leadership team is clearly supportive of the company’s evolution, it is essential to obtain a comprehensive and realistic understanding of the impact of change on people and processes (22%).
In this context, the Chief Human Resources Officer (CHRO) is particularly aware of the potential impact and emphasizes the critical importance of technology to manage change (50%) and, in particular, the use of artificial intelligence and automation to improve workflows and business processes.
Comment by Alex Rumble
Alex Rumble, SVP Product Marketing, Analyst Relations and Competitive Intelligence at IFS, commented, “We often hear from clients that digital transformation is not about technology. This research clearly indicates a close alignment within the corporate C-suite when it comes to driving business evolution and proactively pushing the organization along this path.”
Rumble added, “Servitization is fundamentally about customer orientation at every stage, from design to manufacturing to delivery to support of products and services. This concept has been around for decades, but the technology element has been missing. The intersection of servitization and the explosion of digital technologies has created a perfect storm for companies that can harness the power of AI, automation, and ML, for example, to redefine and optimize their operations based on customer needs and to generate value to the business. This is cause for great excitement for IFS.”