Servitisation

According to E&T journal ‘servitisation’ is a term originally coined in the ‘Harvard Business Review’ in 1988. In the same issue as its ‘Are you being served article?’ which discusses the reinvention of product companies as service companies is a major series to co-incide with the sixtieth anniversary of publication of George Orwells’ book ‘1984’. The journal looks at how far his scenario has been realised at least in terms of technology. Of course as with science fiction - Arthur C Clarke’s ‘2001 Space Odessy’ serves to illustrate that to imagine a future is very different from putting a realistic date on when it might happen. Both 1984 and 2001 are already history and some predicted technology inspired products have indeed become commonplace while some have come and gone. I am not sure whether much was predicted about outsourcing or off shoring sixty years ago, but today as a country the UK has outsourced production, call centres, software development, service support and arguably politics and law making. In previous blogs I have noted the problems facing one client where the traditional sales support model through development into volume production is no longer relevant. I have recently received their instructions for the launch of a new product. There is nothing new about the product except that it is produced in China and no doubt costs a whole lot less than making the same item in Birmingham. So while some companies are transforming into service organisations, keeping very close to the customer by consulting during the development phase and putting themselves into a better position to then supply product for volume manufacture others like our client are using low cost sourcing to stay in the game. I suspect the service route will prove more sustainable