Why some companies fail to make the transition
Industrial companies are increasingly defining themselves as "service providers" and offering customers "one-stop solutions". They promise "total customer solutions" thanks to "integrated value chains". But current empirical studies show that the transition from producer to service provider is often unsuccessful. Failure manifests itself in two forms: on the one hand customers complain that they don't receive a solution, just more complex offers, and on the other, the producers complain that their costs outweigh the additional income. In my studies I have identified five challenges that have to be overcome in order to achieve a successful transition.