According to a recent study conducted by IFS, a global cloud enterprise software company, artificial intelligence (AI) has emerged as the top technology for driving tangible business value in the transition to a servitized business model. The research, which surveyed over 2,000 senior decision-makers across various industries and regions, sheds light on the significance of technology in achieving business benefits during this transformation.
The survey found that 43% of respondents, including executives at the VP level and above, consider the shift to a servitized business model a high priority. Interestingly, the research highlights a division between “Leaders” (19%) and “laggards” (23%) in completing this transition. One key factor slowing down progress for some organizations is the need to clearly define how this shift impacts their workforce, processes, and technology landscape.
Across various industries, AI plays a crucial role in accelerating the servitization process and realizing its benefits. Respondents cited several advantages, including enhancing operational efficiency (28%), reaching new customer segments and markets (28%), increasing customer satisfaction (27%), improving customer retention (26%), and securing higher profit margins (25%).
The sense of urgency to build AI capabilities is most pronounced in the Manufacturing and Services sectors (58%), followed by A&D (51%), Telecoms (50%), Construction and Engineering (48%), and Energy, Utilities, and Resources (48%). These industries view innovation and differentiation as essential strategies for boosting revenue growth and profitability.
Additionally, financial health and business resilience are top priorities throughout organizations, with CEOs (54%) and CFOs (49%) leading the charge. This dual leadership underscores the link between digital transformation and the expected financial benefits derived from prioritizing customer-centric product and service design and delivery.
While the executive leadership team is fully committed to business evolution, understanding the shift’s impact on people and processes (22%) is crucial. CHROs recognize the potential impact and highlight digital technology’s significance (50%) in managing change, particularly through AI and automation to enhance workflows and processes.
Alex Rumble, SVP of Product Marketing, Analyst Relations, and Competitive Intelligence at IFS, emphasized the alignment between the C-suite and the proactive approach to business evolution. Rumble stated that servitization revolves around customer-driven practices in product design, manufacturing, delivery, and service. He noted that while the concept of servitization has been around for decades, recent advances in digital technologies have created an opportune moment for companies to harness the power of AI, automation, and machine learning (ML) to reshape their businesses around customer needs and deliver significant business value.
