Simon Charlton, sales director at Columbus Global (UK) tells why a service-based model provides endless possibilities for business.
How important is the manufacturing services model to the future of UK manufacturing?
Columbus is a major supporter of UK manufacturing and from a technology perspective, Columbus has seen a huge shift towards the requirements of prospective new partners and customers, particularly in those firms’ servitization needs.
For example, looking after equipment, ensuring it is integrated, and stays efficient and effective, but more predominantly now, the services those businesses can provide their customers to be more proactive and more service focused, as opposed to a reactive-type service call.
What are the immediate benefits for a business looking to adopt a service model?
For customers, it is about providing better customer service, which adds a better rate of retention, potentially increases the customer spend, as well as profitability by acting as a true partner in the servitization of their own customers.
In the past five years, we have witnessed a transition from people being wholly wed to an existing business partnership, to individuals picking up the phone, or searching online to find the services they are not already receiving.
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Negating that requirement and providing the servitization needs of their own customers has become more important, and heightening levels of partnership with their own customers is likely to lead to higher levels of loyalty.
What do you think the wider societal, economic and environmental advantages are of servitization?
From a social perspective, the capabilities of cloud services within healthcare will be life changing beyond our imagination.
For instance, patients with non-life threatening conditions, could be released from hospital and any changes in their condition will be monitored and assessed remotely to establish what further care is necessary.
In other areas, like volumes of transport, levels of pollution in the air, all of these things will be monitored more accurately. The effects on society will be limitless and unthinkable.
What are the major challenges to businesses adopting a service model?
The perceived investment required is always a barrier. We still see companies with systems more than 20 years old and it’s clear that it isn’t company culture to adopt new models. This is also reflected in investment in employees and equipment.
However, the situation is improving, particularly in the past half a decade, where there is a better connection between the people on the ground; middle management; and those individuals at the top, who are actually spending the money.
Previously, when discussing improved servitization of their customers with those at the top, they would understand and support concepts like customer retention, but would think that revolved mainly around price, believing that as long as they remain competitive in price everything else would follow.
How do businesses begin to overcome these challenges?
Firstly, we must examine which systems we can help provide, as well as articulating the knowledge and background that change brings.
We have to start educating business leaders, and making them understand that changing these systems should not be seen as an IT implementation or as an IT spend.
We find that better educated companies now view these changes as a business-led programme that advances every aspect of the business with a shift towards servitization.
When you appeal to their business sense, and move away from an IT perspective, it helps potential clients to understand that this is supporting them.