Concentrol lays the foundations for a servitization process with a project to consolidate its business model, in terms of the services it offers and the relationship with customers. The initiative, which has been designed and is in the process of being implemented, has received a subsidy for new disruptive initiatives from the Agency for Company Competitiveness (ACCIÓ).
The work plan consists of different phases such as the development of the strategy and the selection of service ideas. Currently, the vast majority of companies in the sector have a product-oriented business model, and in some cases it seems very difficult to incorporate or combine it with a service business model, both because of the process itself and because of the lack of resources or “traditionality” of the sector. The services allow us chemical companies to improve the customer experience, since they can cover the entire life cycle of the product.
ACCIÓ is an agency of the Generalitat de Catalunya that specializes in promoting innovation and business internationalization. Their experience and support will help Concentrol in this optimization process that will result in a more efficient service to customers. The line of aid granted by ACCIÓ wants to encourage the development of new disruptive initiatives.
Lines of action
In this sense, Concentrol is a model to be followed by other companies in the sector, and leads the market in responding to changes in the industry. The company promotes and permanently invests efforts in the research and development of new products and services. The Corporation wants to generate a new service-oriented business model and generate an experience of the organization, to better connect and satisfy the constant emerging demands of the market.
Customers ask for more personalized service, expecting service representatives to solve immediate problems and act as trusted advisors to help them get more value from the products they purchase. Thus, one of the challenges on which Concentrol innovates is the incorporation of a business model based on services; not only sell products, but also offer a wide range of services.
The project will focus on offering product-based services; which can provide additional value such as knowledge and advisory services; resource optimization, to improve process efficiency; and outcome-based, by delivering business results, for example by managing the total cost of the product rather than the sale of the product.
The offer may reduce coordination, transaction, and other costs incurred by the customer if they demand multiple products, services, and activities (for example, chemicals, equipment, purchasing, operations, maintenance, quality assurance, or inventories).
In addition, contracts based on processes and results transfer risk from customers to their suppliers. For customers, the cost of chemicals management ranges from one to three times for every dollar of chemicals purchased (for example, a purchase of $5 million worth of chemicals requires an additional $5 million to $15 million in spending to manage these chemicals). These high costs are related to compliance, security, and disposal.
All-round transformation
This ambitious and innovative shift in the business model cannot be carried out without a change in the customer-centric company culture. This servitization process will strengthen ties with customers, getting to know them better and creating business ties that can add value to both corporations.
Concentrol is already a model to follow when it comes to the products it manufactures, and with this action it will generate its own experience that will also make it stand out in the experience of its professionals.
