1. SERVITIZATION AT A SMALL ELECTRICAL COMPANY THROUGH A KNOWLEDGE TRANSFER PROJECT Ebi Marandi Carl Eastham Francine Turner-Gros IPEC Ltd Judy Zolkiewski Manchester Business School

2. The purpose was to highlight the challenges faced in both servitization and in the implementation of KTP projects, this is a case study based on a small electrical company's experience of implementing servitization through a Knowledge Transfer Project (KTP) in partnership with a university. BACKGROUND TO THE STUDY

3. CHELLENGES OF SERVITIZATION For many leading engineering companies, the integration of services into product offerings is seen to comprise an important shift in the underlying business model (Raja, Green and Leiringer, 2010). Warnings of generic, implementation issues: marketing new relationships with customers adopting a service culture and supporting processes (Mills, Neaga, Parry and Crute, 2008) This may require manufacturers to develop new internal and external capabilities (Paiola et al. 2012).

4. WHAT IS A KTP? A Knowledge Transfer Project (KTP) - is a three-way project involving academia, a business and a recently qualified person (known as the Associate). KTP works with over 140 universities, further education colleges, and research and technology organisations across the UK, which translates into over 450 university departments.

5. HOW A KTP WORKS A university and company link A proposal is written and an application for grant is made to Innovate UK Duration can vary from 3 months to 3 years Experienced KTP advisor keeps track of the progress of the project Core team: Academic supervisor, work place, supervisor, KTP associate Regular meetings between the core team Regular meetings with KTP advisor, core team and MD

6. COMPANY BACKGROUND The company was established in 1995 It specializes in On-line Partial Discharge testing and monitoring of high voltage assets PD is essentially a series of small sparks that occur in aging or damaged high voltage insulation which can be a sign of imminent failure and therefore poses high health and safety risks as well as the risk of power outages The company are world renowned for their technology

7. COMPANY PROFILE In the past they have provided some services, including, site testing, data analysis and reporting; however, these have been small scale mostly restricted to the UK market Most profitable territories in 2014 were the Far East and the Middle East Main competition: two other UK, and several overseas companies The project was centred around helping the company offer service products in these overseas markets

8. THE PROJECT A proposal was approved by Innovate UK for a servitization project to take place between the company and the University of Manchester. The two year project began in November 2013. In 2013: Turnover- £1.2 Million Profit- £100k Employees- 12 In 2014: Turnover- £1.9 Million Profit- £293k Employees- 20

9. PROBLEMS FACED BY THE COMPANY Reliance on unqualified and inexperienced third parties to sell, install and commission their highly technical and complex products in overseas markets Lack of standardised business model/service offerings within UK and overseas markets The unexploited potential for a service based model due to a lack of direct knowledge of the end user’s needs Limited growth in the UK and overseas

10. PROJECT AIMS Unlock the potential for a significant growth in overseas sales through servitization Review and modify the existing business model/business strategy to support sustainable growth Establish brand/reputation globally – thereby assisting to gain entry onto preferred supplier lists and increase sales of goods and services

11. IMPLEMENTATION Familiarisation Distributor Communications Evaluation of target overseas markets Business and Cultural Familiarisation Servitization, growth & communications model development

12. SERVICE PRODUCTS IMPLEMENTED Annual company conference Training courses Leasing PD testing Remote services (data hosting & data analysis)

13. LESSONS LEARNED First embed a marketing philosophy in the organisation Put in place proper distributorship Involve all your staff and main customers Use every opportunity to develop relationships Regularly evaluate and monitor

14. REFERENCES Raja, Green and Leiringer, 2010 Mills, Neaga, Parry and Crute, 2008 Paiola et al., 2012