1. For a more in-depth look at the Oxford Economics study
proving the service continuum:
To learn more about product and service transformation, go to:
PTC.com/smart-connected-products
To learn more about product and service transformation, go to:
PTC.com/smart-connected-products
For a more in-depth look at the Oxford Economics study
proving the service continuum:
For a more in-depth look at the Oxford Economics study
proving the service continuum:
To learn more about product and service transformation, go to:
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Trane Customers Get Better Air and More Value with Intelligent Services, PTC, blogs.PTC.com/2014/11/10/trane-customers-get-better-air-and-more-value-with-intelligent-services
THE PREDICTABLE JOURNEY OF
SERVICE
INNOVATION
TTTTTTTTTHEHEHEHEHEHEHEHEHEHEHEHEHEHEHEHE PREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OFPREDICTABLE JOURNEY OF
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SERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICESERVICE
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To drive competitive advantage, best-in-class manufacturers are shifting
their business models from producing and selling products to selling
outcomes. Through research with Oxford Economics, PTC validated the
existence of a Service Continuum – a predictable model of service trans-
formation that companies follow as they evolve toward advanced ser-
vices offerings to improve revenue, profit margin, and customer value.
To drive competitive advantage, best-in-class manufacturers are shifting
their business models from producing and selling products to selling
outcomes. Through research with Oxford Economics, PTC validated the
existence of a Service Continuum
that companies follow as they evolve toward advanced ser
vices offerings to improve revenue, profit margin, and customer value.
To drive competitive advantage, best-in-class manufacturers are shifting
their business models from producing and selling products to selling
outcomes. Through research with Oxford Economics, PTC validated the
a predictable model of service trans
that companies follow as they evolve toward advanced ser
vices offerings to improve revenue, profit margin, and customer value.
PRODUCT MODEL SERVICE PARTS
Sale of Products Sale of Outcomes
FIELD SERVICE
Break/Fix Model Cost-plus SLAs
SERVICECONTRACTS OUTCOMES-BASED
SERVICE MODEL
Service Continuum
Oxford Economics surveyed 370 service executives around the globe
North America
102
Asia
97
Europe
161
RESPONDENTS BY MAJOR GEOGRAPHY
INDUSTRIES REPRESENTED
COMPANIES’ ANNUAL
REVENUE IN USD
BUSINESS FUNCTION
RESPONDENTS REPORT TO
We describe our mission, not in internally focused terms of product
quality, profit goals, or market share, but as helping our customers
make their buildings better for life.”
– Dane Taival
Vice President of Building Services and Customer Care, Trane
“
CASE IN POINT: Trane – Delivering more customer value
Use sophisticated tools
and systems
Are equal collaborators,
innovators with engineering
Measure results based on
resolving customer problems
Demonstrate strong, globalized
service leadership
Use disconnected tools
Influence engineering, but are not
equal collaborators
Use mixed measurement
standards/KPIs
Have fragmented service
organization, but beginning to
organize under one umbrella
Isolated information silos
Use basic IT tools and do-it-
yourself programming
Heavy &
Industrial EquipmentWhite Goods
Electronics &
High Tech
Commercial & Cargo
Airlines
Automotive &
Transportation
Medical Equipment Aerospace & Defense
15%
14%
14%
14%
14%
13%
16%
1 bn to
4.9 bn
5 bn to
9.9 bn
10 bn to
14.9 bn
15bnto
19.9bn
20 bn or more
Engineering
Services
OperationsMarketing
Sales
Service Continuum Distribution Today
SERVICE ORGANIZATION - STAGES AT A GLANCE
PRODUCT MODEL SERVICE PARTS FIELD SERVICE
Break/Fix Model Cost-plus SLAs
SERVICECONTRACTS OUTCOMES-BASED
SERVICE MODEL
LAGGING FORMATIVE MODERATE PROGRESSIVE BEST-IN-CLASS
LAGGING
Have limited or non-existent
service leadership
MODERATE BEST-IN-CLASS
Companies were mapped against the stages of the Service
Continuum based on survey scores, determining service
organization and process maturity.
Companies were mapped against the stages of the Service
Continuum based on survey scores, determining service
organization and process maturity.
Companies were mapped against the stages of the Service
Continuum based on survey scores, determining service
Service Innovation
Unstructured and inconsistent
intelligence sharing
Measure service-related activities,
not issue resolution
Tend to be subordinate to
engineering
Share structured intelligence
with enterprise
STAGES WHEN VIEWED IN THE CONTEXT OF SMART, CONNECTED PRODUCTS
LAGGING MODERATE BEST-IN-CLASS
Limited or no connectivity with
products; some new products
are connected and remote
monitoring may occur to watch
for failure trends
More products are connected
and some processes include
remote diagnostics and
service (firmware updates) to
automate service delivery
processes
Smart, connected products
enable install-base product
intelligence to develop and
sustain outcomes-based
contracts as companies
transition to new service
business models
SERVICE INNOVATION AND TRANSFORMATION OBSTACLES THAT RANK HIGHEST BY STAGE
58%
in Lagging stage:
Lack of specialized
technology for service
56%
in Moderate stage:
Company culture is
still product-centric
58%
in Best-in-Class stage:
Service has limited synergy
with sales and marketing
OTHER SERVICE INNOVATION AND TRANSFORMATION OBSTACLES
ECONOMIC BENEFITS OF SERVITIZATION
Lack of centralized
processes
Not enough of
the right resources to
take service in-house
Too many logistical
issues to create
larger strategy
Talent acquisition
and retention
STOP
?
14%
16%
20%23%
27%
30%
27%
21%
13%
9%
+
+
95%
predict they will be
best-in-class in three years.
70% are in the first 3 stages of
the Service Continuum today.
46%
in Lagging stage achieve a profit margin
of 10 points or less
85%
in Best-in-Class stage achieve a profit
margin greater than 10 points