A change towards an integrated solutions provider requires a wider scope of competences, such as customer business understanding, technology knowledge, auditing, consulting, communications and supply management or partnering. A study by Windahl, Andersson, Berggren and Nehler on “Manufacturing firms and integrated solutions: characteristics and implications” by European Journal of Innovation Management vol 7 iss 3 pp. 218-228 indicates that intelligent technology enables a continuous optimisation of customer operations. Developing services to complement the installed base requires fewer assets, is often counter cyclical and can provide higher margins.
Characteristic in a change process away from hardware or capital intense production is focusing more on customer process throughout the customer journey, including both business planning and operations. Some models may include even possibility for customers to operate equipment or installation without owning, maintaining or operating it.
Within the transformation, a key success factor is to plan how to build the capabilities supporting the customer performance. According to Windahl, Andersson, Berggren and Nehler, some key factors are: pricing models, generating new performance indicators against the traditional manufacturing set-up, increased risk taking and changing the relationship with customers and partners, including increased customer interaction and co-production. In their competence development model, they see a difference of “shaping the market” and a “interacting” as a strategic orientation. Listed key competences of an integrated solutions provider include technical and application competence, systems integration competence, partnering competence, as well as market / business and consulting competence.
It is no wonder companies are currently investing in advanced customer understanding models, CRM systems and continuous sales competence development. All gears towards collecting a flow of information from customers. Not only related to customer business and their needs, but increasingly into customer operational profiles, use data and related analytics. Providing integrated solutions is building a consistent business model with a customer, the solutions provider being an integral part of customers operations on a daily basis.
Not all customers are into ways of risk reduction and differentiating their services to their own customers. Thus a manufacturing company need to consider - and decide - the level of transformation they aim at, how much to build on existing manufacturing capabilities, how much to invest in building service and solutions capabilities – and to which customers to focus on. One way is to separate manufacturing altogether and build a new approach for customer focused solutions business with new metrics, culture and incentives.