Researchers in the Advanced Services Group at Aston Business School are delivering a project which focuses on transforming SMEs to improve their revenues through the adoption of advanced services.
The TRAN-SIP project was funded using European Regional Development Funds and it has been designed to support manufacturers to help improve revenues through the development and provision of ‘advanced services’. In essence, the project helps technology-innovating firms to understand their customers’ pains – in relation to the use of their product or service – and to find novel ways of addressing these pains by providing basic, intermediate or advanced services to make the customer more successful.
Basic services might include spares and consumables, intermediate could include maintenance contracts, and, ultimately, advanced might cover a fully-managed service to ensure the customer receives the maximum capability from the product.
The Advanced Services Group (ASG) at Aston Business School recruited suitable firms and carried out a series of web-enabled ‘gamified’ diagnostics to understand the strategic positioning of each firm viz-a-viz their dominant strategy. The innovation came in the combined recruitment/diagnostic phase; by using ‘gamification’ tools (serious games) to gauge a firm’s readiness to transform, ASG were able to help the firms envisage how the transformation might help them become more sustainable, improve revenues and recruit more staff. This is a unique project and the model does not exist elsewhere in the UK.
ASG partnered with Lloyds Bank plc and Trowers & Hamlins LLP to ensure that professional support was on hand to help the firms change their financial model and legal contracts to match the opportunities offered by new services. An ERDF-funded pilot project delivered by the ASG team (2012-2015) was able to evidence £11.6m Gross Value add (GVA). The new TRAN-SIP project (2016-18) has achieved £13.2m GVA and created 19 jobs to date, with one year of the project still to run.
The main obstacles were addressed early on in the process by designing-in new knowledge (legal and finance) which allowed the TRAN-SIP project team to focus on building relationships with the firms, taking time to understand the core business, assess the opportunities and to create a community of like-minded executives (circa 62 firms). This community can come together to share best practice of business transformation and to work with the academic research community to identify new areas of business research to be explored.
Danny Harrison, Head of Business Development at Nicklin Transit Packaging, has been a beneficiary of both projects and their firm has grown 66% as a result of the changes to their business model, being innovative in the design of their products and understanding their customers better.
As a result, they have moved from being a Tier 2 supplier to a Tier 1 with an automotive original Equipment Manufacturer (OEM) as a result of demonstrating a much higher level of innovation. Danny said “without the ASG team, we would still be trying to sell pallets and cardboard boxes on a price basis, which was becoming a much commoditised sector, but now we are co-creating new value with our customers and improving both revenues and margins”.
This article first appeared in the 2018 State of the Relationship report, commissioned by Research England and compiled and published by NCUB.