Research on business-to-business services and servitisation capabilities has significantly benefited two UK-based SMEs.
“Working with Professor Zolkiewski and colleagues from [UoM] allowed us to develop a process for selecting innovative products and services that better met HMG’s customers’ needs and provided HMG with access to a wider market while remaining focussed on the profitability of these innovations”
(Managing Director, HMG Paints)
Research on business-to-business services and servitization capabilities has significantly benefited two UK-based SMEs, HMG Paints and IPEC, enabling both firms to modify their business models and organisational cultures, unlocking the potential for significant revenue growth.
HMG’s partnership led to the implementation of an innovation management system for identifying new products and services, while the partnership with IPEC enabled it to expand into overseas markets in 10 countries, achievements recognized by a Queen’s Award for Export.
Over the past 16 years AMBS has conducted research into business-to-business (B2B) services and servitization. This work addresses the question of how manufacturing firms build capabilities to develop services and solutions that supplement their traditional product-based offerings, thus improving their productivity.
Working in partnership with companies, this research has pioneered a customer-focused approach to understanding servitization in historically product-oriented manufacturing SMEs. The work has used direct knowledge of end users’ needs to enable organisational and cultural changes required to successfully develop a range of service ‘products’ to enhance ongoing B2B relationships.
A key contribution of the research underpinning the impact is that it has improved understanding of the role of customer relationships in developing innovative products and services in B2B markets served by traditional manufacturing firms which often have a product focus. Related work has investigated conceptions of quality of service (in contrast to quality of product), demonstrating that firms and clients have divergent perceptions of what constitutes service excellence.
HMG is a medium-sized, family-owned, industrial surface coatings manufacturer based in Manchester and is the UK’s leading independent manufacturer of bespoke paints and coatings for use in commercial transport, original equipment manufacturing, civil engineering and construction.
The HMG KTP (Knowledge Transfer Partnership) applied the team’s research in B2B marketing, new product and service innovation processes and change management within SME B2B networks. The aim of the KTP was to develop a formalised innovation management process, covering inception, evaluation and bringing the product and service to market.
The KTP helped the company to address a culture whereby product and service innovations that did not have immediate application with the existing customer base failed. In particular, the company lacked a formal process to monitor, manage and control the development and exploitation of innovations.
Drawing on the relational and focal networks approach, the HMG KTP incorporated a customer needs assessment methodology into the process for selecting innovative products and services, which enabled HMG to access a wider market.
One of the first products identified through the new selection processes, implemented under Professor Judy Zolkiewski’s guidance, is “monothane,” a product topcoat that requires no primer. This innovation was shortlisted for Insider Media’s Made in the North West Technology Award and has subsequently become one of the company’s most important products.
IPEC develops world-leading technology for monitoring faults and problems in power networks across the world, and around 90% of its business comes from outside the UK.
Its monitoring systems send data back to secure servers at its head office and the company offers a range of data hosting options. The IPEC KTP aimed to develop a new scalable servitization strategy to allow the company to innovate a range of complimentary services to support its existing business. The researchers helped IPEC move forward in the value chain, from focusing exclusively on manufacturing, to greater involvement in distribution and system servicing.
One of the greatest impacts was changing the company culture from “just shipping hardware to customers” towards a service focus. IPEC used to see its interaction with customers as ending upon the installation of their systems, but the organisation now continue the interaction into servicing and upgrading.
Fundamentally researchers helped IPEC to shift strategically from an upstream manufacturer to a more forwardly integrated company providing products and associated services. For example, the company was able to complement their existing monitoring and instrumentation products with system performance and expert analysis services.
IPEC won the Queens Award for Export in 2016 in recognition of the company’s substantial and sustained increase in export earnings over three consecutive 12-month periods, with the company’s press release around this award explicitly acknowledging the role the KTP played in this achievement.