Do you still know of people who equates innovation with R&D, products and technologies? Not you – of course, but someone you know. If so, you should let them check out these facts from Vestas, one of the global leaders within wind energy, on their service business.
– Global Service was established as a stand-alone business unit in 2014. It now accounts for more than 1bn EUR annually and thus approx. 15% of the total annual revenues.
– Growth expectations are in the 30% range for the next 3-5 years. The growth is expected to be highly profitable.
– Today, more than 6.000 out of a total workforce of 18.800 works in the Global Service division.
You can see the same picture across many other companies and industries. Here, you can also find other examples of the strategic importance of services as you can find with Vestas, which highlights the service business as their #2 strategic objective in their recent financial report:
2. Capture full potential of the service business
“Having delivered an accumulated amount of more than 69 GW of wind power – a significantly higher amount than the closest competitor – Vestas has a unique platform from which to grow its service business, which today, is already the largest in the wind power industry.
As the majority of Vestas’ wind turbine contracts are sold with service agreements, typically running for five or ten years, the stable revenue stream from the service business is set to continue its growth as the installed base of wind turbines increases.
In 2014, the service business was established as a separate division and a head of Global Service was appointed. Following this appointment, the global service organisation was implemented later in the year and the division is now set to capture the full potential of the service business.
Vestas intends to expand its service business further by offering new and value-adding service solutions and a variety of upgrades of existing wind power plants to its customers. This is made possible through the use of the wind power industry’s most powerful supercomputer and a body of unrivalled wind data.”
You also need to innovate with services – just as you have to do with products, technologies, business models, processes and the organizational structures of an organization.
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