Researchers from Lancaster University Management School are helping manufacturing businesses find better ways to adapt their practices to provide more than just products.

The Advanced Services Group, with teams from Lancaster and Aston University, organised a two-day industry roundtable at multi-national electronics company RICOH to explore the challenges servitization creates for the finance function.

The finance function can either be a significant driver or a significant barrier to sustainability-focused business model innovations such as servitization – transforming manufacturers from just offering products to create new revenue streams through providing valuable services.

Only through a tight alignment between service and finance can manufacturers adopt these business models at the scale required to decarbonise the economy.

The event saw business leaders share their experiences, including challenges they faced around revenue recognition, cashflow and value pricing.

Professor Andreas Schroeder, Professor of Information Systems in the Department of Management Science in LUMS and a member of the Advanced Services Group team, said: “The examples and expertise the RICOH team provided were invaluable in helping to clearly map out how challenges can be addressed.

“The key is involving the finance function early on, clearly communicating the business model change and co-developing solutions. Too many servitization leaders delay engagement with the finance function and overlook that the finance team must develop the expertise on how to operationalise these new business models.

“Servitization cuts across the manufacturer’s business in more than one way. Following a systematic approach that helps anticipate these challenges is critical.”

The event provided opportunities for the Advanced Services Group and the businesses involved to work to further advance the understanding of servitization.