Standards Development

Scope

This document establishes the concepts of servitization and advanced services. It provides a framework that explains the breadth of the organizational transformation process required to develop an advanced services business model. lt also provides guidance on how to envision advanced services and the requirements for their effective delivery through servitization.

Case studies for advanced services and servitization are provided in Annex A and Annex B.

Although the concepts of advanced services and servitization have originated in a manufacturing context the standard is equally applicable to other product-based organizations of any size that seek to provide any type of advanced services.

Purpose

The purpose of the standard is to provide (i) a widely acceptable definition of ‘servitization’ and ‘advanced services’ that supports communication between industry stakeholders, and (ii) guidance on the breadth of the servitization process and facets of advanced services in order to facilitate the scoping processes for industry stakeholders.

Justification

At a high level, advanced services describe a distinct range of value propositions, where manufacturers use product-service bundles to offer capabilities that create value for their customers. For many manufacturers, offering advanced services describes a significant departure from their established product business which is focused on exchanges of goods including warranty or break-fix service commitments. Page 2 of 6

An advanced service offering instead may include aspects of (i) the product the customer will use within its operations, (ii) the customer’s business processes or (iii) the business model of the customer. Accordingly, advanced service outcomes may be expressed in terms of the efficiency and effectiveness of the physical asset, the functional values provided (e.g. regulatory compliance, predictable costs, dependable machine uptime) or the flexibility it offers (e.g. capability to deal with varied consumer demands)

Servitization describes the required transformation that takes place within the manufacturer and its delivery network to develop and deliver these advanced services. At a high level, the transformation will often involve aspects of the product-design, sales-process, digital infrastructure and financing among others.

Although servitization requires significant transformations within the manufacturer and its network there is a strong interest among manufacturers to develop and offer these advanced services.

Offering advanced services has been recognised as a significant economic opportunity and the need for standards to support the realization of these opportunities has been identified 1).

Advanced services has also been recognised as a business model to accelerate the development of the circular and low-carbon economy 2) based on its product innovation implications (e.g. energy efficiency, value chain dematerialisation, component reuse).

To support the development of advanced services it would be important to formalise the terminologies that are being used to describe and categorise the activities manufacturers engage in and provide an understanding of the scope of the activities commonly required.

1) UKGOS. (2018). Services transformed: Growth opportunities for the UK service economy, Government Office for Science. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/695969/services-blackettreport. pdf

2) Karamitsos et al (2020). What is servitisation, and how can it help save the planet? World Economic Forum. https://www.weforum.org/agenda/2020/11/what-is-servitization-and-how-can-it-help-save-the-planet/ 

Note: in case the WI is based on documents from other organizations than ISO/IEC, please specify it here