Twenty-five per cent of the turnover of companies in the sector comes from service activities. The service portfolio offered by companies is rather broad but still generates limited revenues. Large companies appear much more mature with respect to digital service in all its forms. The offer of digital services will be more and more fundamental in the user’s purchasing decisions: almost 70 per cent of companies consider that, within three years, they will be decisive for the sale of machinery.
Recently during the event “The Voice of the Market: the future of digital services for industrial machinery“, the results of the Observatory “Digital Servitization in the machinery sector”, a research project by Digital Industries World, carried out in collaboration with ASAP Service Management Forum (Inter-University Research Centre on Innovation and Service Management in Industrial Enterprises), Acimac, Acimall, Acimit, Aita, Amafond, Amaplast, Siri, Ucima and Ucimu Foundation, were presented.
The meeting – organised by Digital Industries World, the association that brings together multidisciplinary institutions, including leading companies in the industrial sector and research institutes of excellence, with the aim of accelerating the digital transformation of the manufacturing industry, and sponsored by Federmacchine, the federation of the Italian capital goods industry – was attended by around one hundred guests including entrepreneurs and operators from the machinery industry.
The meeting, opened by Giuliano Busetto, president of Digital Industries World, and Bruno Bettelli, president of Federmacchine, was attended by Federico Adrodegari, researcher at the University of Brescia and deputy director of ASAP, who illustrated the results of the survey, Andrea Gozzi, Secretary General of Digital Industries World, Marco Taisch, professor of Digital Manufacturing and Operations Management Politecnico di Milano, Andreas Schroeder, professor of Digital Lead of The Advanced Services Group (UK). The results of the research were commented during the round table by Tiziana Tronci, board member of Amafond (foundry suppliers), Roberto Paltrinieri, vice-president of Ucima (packaging machinery), and Riccardo Rosa, vice-president of Ucimu (metalworking machine tools), representing some of the sectors that are part of Federmacchine.
The study, conducted on a broad panel of machinery companies – around 200 companies responded to the questionnaire – contributes to providing a snapshot of the degree of digital maturity of the capital goods industry in the country.
THE RESULTS OF THE SURVEY
The role of Service for machinery companies.
The turnover of companies in the sector from service business is currently worth around 25 per cent of the total. This shows that the dominant business model of the machinery sector is still the traditional one, centred on the sale of machinery.
This set-up is more pronounced in SMEs. For small companies, in fact, service contributes just under a quarter of the total turnover; for large companies it contributes almost a third.
If it is reasonable to imagine that the business of machinery companies is focused on the production of new goods, it is equally true that the distribution between production and services in relation to revenues is still decidedly unbalanced on the manufacturing side.
More than half of the machinery manufacturers (57 per cent) have implemented a targeted strategy for the development of the service business.
The strategic approach to service appears to be profoundly different in the view of large companies compared to that of small ones. In fact, the definition of a strategy for services concerns 83 per cent of large companies and 48 per cent of SMEs.
More than half of the companies (53 per cent) expect the turnover of the services business to increase significantly in the future. Again, it is large companies that believe more in this statement (70 per cent) than SMEs (47 per cent).
These two indicators confirm the increasing importance that machinery companies attach to this business. However, the translation of the strategy into operational activities is still rather limited. Only 41 per cent have defined roles dedicated to activities related to the service business. Even less: 34 per cent have defined specific roles and responsibilities for the development of new services, and only 29 per cent of respondents have allocated a dedicated budget.
The portfolio of services offered by companies in the sector is quite broad but remains anchored to the more traditional services sold in transactional mode
Widely established services, i.e. offered by more than 80 per cent of the panel of companies surveyed: installation and start-up, training, spare parts sales, reactive technical assistance, but also remote monitoring and support via connection to the machine or use of augmented reality.
Revamping, retrofitting, consulting and optimisation services, maintenance contracts and machine reporting services are considered as widespread services, offered by 50-80 per cent of the total respondents.
On the other hand, customer financial services, 24/7 customer care, predictive maintenance, which is nevertheless beginning to take hold, and services related to machine take-back, modernisation, reconditioning or recycling are less widespread (under 40 per cent).
The role that services can play in terms of reducing environmental impact is still limited, but there is greater sensitivity in this area among large companies.
Looking at the detail of service activity, in relation to turnover the most significant revenues come from transactional services.
With respect to the contribution to turnover, service activity mostly takes the form of transactional services such as the sale of spare parts, consumables and accessories, which, on closer inspection, are similar to the sale of products (16 per cent). After-sales services also include technical assistance, training, upgrades and revamping; these account for 8 per cent of total turnover. Relational and recurring services, such as maintenance contracts, account for 3 per cent.
Digital and related services, such as the sale of software, data and machine connections, account for only 1 per cent of total revenue. Even for large companies, this activity currently has a negligible weight of 2 per cent of the total.
Product ‘as a service’ sales models are still at an embryonic stage of development. They are offered by almost 20 per cent of the surveyed companies, but the resulting revenues are negligible: at the moment, they represent more of an experiment. However, 35 per cent of the respondents say they intend to implement them in the near future.
Looking ahead, the offer of digital services will be increasingly decisive in the purchase decisions of the machinery user: almost 70 per cent of the companies responding to the research consider that, within three years, these services will be decisive in the purchase decisions of a capital goods. This consideration is even stronger among large companies (92 per cent).
How the organisation of machinery companies changes with respect to the adoption of digital technologies
For more than half of the companies in the panel, digital technologies and skills are a determining factor for the development of the services business. In particular, for 55 per cent of them these technologies help to improve the delivery of traditional services. Fifty-three per cent say they are engaged in the development of new services, precisely because of these technologies. Forty per cent have defined a digital services growth strategy.
More than half of the panel of companies involved in the research had to develop new competencies in order to offer digital services, also by activating partnerships with companies outside the company.
Large companies are significantly more mature in terms of developing and offering digital services than SMEs.
However, the adoption of digital technologies for service delivery is still limited. The most widespread are IoT, cybersecurity and cloud computing. They are followed by digital twin, augmented reality, big data analytics, artificial intelligence, and additive manufacturing. Blockchain is far behind.
With respect to size, large enterprises adopt on average 3.5 different types of digital technologies to support their service offerings among those analysed; SMEs only 1.5.
Still on the subject of digital tools, the use of information platforms and systems is a widespread practice among machinery companies for the remote monitoring of machinery installed at client companies (73 per cent) and the management of signals of anomalies/alarms, etc. (76 per cent), widespread among both large and small companies; the management of service requests/customer care (62 per cent); data processing for predictive maintenance of components and products (57 per cent), e-commerce of spare parts (37 per cent), the prerogative only of large companies.
