Servitization - Complex engineering service availability: Is a paradigm shift in the business model and service enterprise required?

In many sectors customers are increasingly seeking service contracts rather than buying products. High tech capital equipment firms attracted by the potential revenue benefits are choosing to move from supplying product only to supplying product and services. The academic literature suggests that business will face challenges in undertaking the transformation from product to service provision and that organisational, cultural, commercial and operational problems have the potential to erode the potential benefits. A better understanding of service business dynamics is required. A case study of a complex engineering service was undertaken. Findings identified multiple challenges associated with the transformation from product to service provision that include strategy, organisation and enterprise management, contracting, risk, culture and operations. Considering these findings holistically it is suggested that a paradigm shift may need to occur, changing both managers perspective and the business models employed to provide service.