Breaking Barriers: Implementing IoT-enabled Smart Services for Competitive Advantage
Creators: name: Kaufmann, Jonas
name: Schreiner, Nick
name: Koldewey, Christian
name: Fichtler, Timm
name: Sommer, Franziska
name: Sedlmeier, Joachim
name: Hocken, Christian
name: Rabe, Martin
name: Kühn, Arno
name: :Unav
Publisher: name: Fraunhofer-Gesellschaft
Year: 2025
Subjects: Smart Services

description: The rise of smart services, driven by digitalization and servitization, is fundamentally transforming product-centric businesses. Advanced data capabilities and services are integrated into traditional products. This change is crucial for maintaining global competitiveness as it enhances the value proposition by, for example, implementing virtual commissioning, streamlining processes, and deploying remote and predictive monitoring applications. These services enable companies to become more agile, adaptable, and data-driven. They address critical challenges such as people-centricity, sustainability, and flexibility, making the transition from product-centric to service-centric models essential for sustained competitiveness. Smart services offer a wide range of benefits, including enhanced customer interactions that improve relationships and foster loyalty, as well as continuous product and service optimization through real-time feedback. Financially, they can create new revenue streams and reduce costs while also facilitating the development of new business models. However, there are significant challenges when implementing smart services. Companies often lack the expertise and resources needed to deploy these services effectively. The fundamental role of IoT-enabled products, which enable data exchange throughout the customer lifecycle, increases complexity. This data must be stored, processed, and managed, which leads to notable efforts and expenses. Designing and developing effective smart services requires the integration of new technologies, the adaptation of internal processes, and the development of a supportive culture. That also indicates the emergence of new skills, a new service organization, and the formation of strategic partnerships, which must lead to a change of mindset in traditional or existing companies. To navigate these challenges and embrace the benefits, the acatech Maturity Index Smart Services1 provides a structured approach for assessing and guiding manufacturers through their transition to becoming smart service providers. The index evaluates technical, organizational, cultural, and user-oriented factors across six maturity stages ranging from "digital starter" to "ecosystem leader". It enables companies to assess their current capabilities, set transformation goals, and develop a roadmap for advancing through these stages. Organizations are encouraged to use the acatech Smart Services Maturity Index to implement smart services effectively. This index draws from industry best practices and insights from various assessments to help identify and address gaps in their capabilities. When engaging the transformation, strengthening the technology infrastructure is essential to enhance digital capabilities and data management systems. The organization is advised to prioritize using data to optimize operations and improve performance. Securing robust management support to align organizational structures and objectives with transformation goals is crucial. It is also important to develop the necessary skills and training for employees, improve customer interactions through personalized services, explore innovative business models like subscriptions or performance-based service-level agreements, and establish strategic partnerships with industry experts. In summary, the successful integration of smart services requires a comprehensive approach that aligns with technological advancements, organizational changes, and cultural shifts. Companies that address these areas effectively can position themselves as leaders in the evolving digital ecosystem, achieving a competitive advantage and driving sustainable growth.