New training for service development and digitization

Article · 2020-10-30

At the beginning of October, the pilot round of Automation Region's training Service Business was completed. The training is aimed at product companies that want to develop their service operations and increase the degree of digitization. We have talked to participants from Xylem and Kanthal - two companies that invest heavily in the development of new services.

Elin Asplund, program manager for business development at Automation Region.

- The companies are experiencing a marked pressure for change and they also see great potential benefits from digitization, says Elin Asplund, program manager for business development at Automation Region. The training focuses on preparing and developing the business model so that companies get as much benefit as possible from their investments in automation and digitization.

The initiative for the Service Business training arose through discussions in the Automation Regions Business Development Group. Two of the group members, Bernt Gustin from Cordevo and Christer Nygren from Mälardalen University, lead the training.

- Through six different modules, participants receive help in identifying services, structuring a service portfolio and designing a plan for further development and anchoring in their organization, says Elin Asplund. The theoretical frames of reference that we draw from the research at Mälardalen University are linked to real cases from the industry.

Xylem is preparing for expanded service focus

Gunnar Berg, Xylem: "The training has served as a valuable sounding board in our development work."

One of the participants in the pilot round was Gunnar Berg, business developer in service and aftermarket at Xylem. The company offers products and services for moving, purifying and analyzing water, such as pumps and equipment for treatment plants. The company's existing services mainly consist of service of installed products, but they also develop a range of advanced services where they help customers analyze their infrastructure for water and sewage.

- One example is the fact that about 30 percent of all drinking water distributed within the city of Stockholm leaks before it reaches customers, says Gunnar Berg. This is often the case in large cities where the infrastructure has been expanded during a long period of time. We offer a service where we analyze the customer's management network and recommend measures, how they should prioritize and in what order they should upgrade.

For Xylem, digitization means new opportunities to develop the range of services. For example, they look into how installed equipment can be connected and log operating data to enable predictive maintenance. The company is in an intensive development phase where the challenges include shifting focus from a product-oriented to service-oriented business. The sales organization must manage a more comprehensive supply chain and the business model is upgraded with subscription solutions.

- The education has served as a valuable sounding board in our development work, says Gunnar Berg. Among other things, we have benefited greatly from the discussions about where and how services arise. An important insight is that the services are created at the customer and in the interaction with the customer. This means that our sales people need to be prepared with a theoretical frame of reference in order to be able to understand and describe the benefits of our services.

Kanthal verifies its business model

Linda Uljens Posio, Kanthal: "We attended this training because we wanted to verify and fine-tune our business model."

Automation Region's member company Kanthal builds and installs customized, electrical systems such as industrial furnaces. Linda Uljens Posio is responsible for a global team of production technicians who carry out installations, upgrades, renovations and service at the company's customers. She has followed the training together with two colleagues.

- About five years ago, we started working more strategically with our services, says Linda Uljens Posio. We built a global service organization with internal competencies and we started designing offers. We attended this training because we wanted to verify and fine-tune the business model we have developed.

During the training, theoretical models for service concepts were discussed, which Linda Uljens Posio and her colleagues tested on Kanthal's operations. A starting point in the training was that many companies, regardless of industry and business, experience similar challenges linked to service development. The interaction and exchange between the participants was an important element.

- It has been a great opportunity to be able to share experiences and working methods within the group and get tips on improvements and help to avoid common mistakes, says Linda Uljens Posio. It was a non-prestigious group and everyone generously shared their knowledge and experiences.

More about the Service Business training

The education contains the following modules:

  • Identify services
  • Create business models
  • Structure the portfolio
  • Understand financial models
  • Evaluate the service portfolio
  • Portfolio strategy - the next step

Each module comprises two hours of joint work in the group with the possibility of individual support. The modules are made up of three parts:

  • Introduction, theory
  • Homework linked to your business
  • Reporting of homework, joint discussion

There are ongoing discussions about a broader launch of the training in the Automation Regions Business Development Group, please contact Elin Asplund for more information.