Roland Berger and KVD show how a purposefully designed service business stabilizes industrial companies in an era of structural volatility.
Is your service business ready for structural volatility?
Take the Service Resilience Check and identify where your organization stands
Industrial companies have long treated service as operational support. That assumption no longer holds. The operating environment has shifted from cyclical fluctuation to structural volatility – geopolitical fragmentation, unpredictable input costs, stalling CapEx, and persistent labor shortages are compounding, not passing. For most industrial companies, the single largest untapped source of resilience sits in their service business.
In this environment, resilience is no longer a comfortable abstraction. It is an operational requirement – the capacity to sustain margin, retain customers, and adapt delivery when conditions deteriorate. For most industrial companies, the single largest untapped source of that resilience sits in their service business. The question is no longer whether service matters strategically, but whether organizations have built it to absorb the shocks that are already here.
Our research across industrial companies reveals a stark execution gap: while 84% of leaders view service as strategically important, only 62% have translated this belief into a formal strategy. This misalignment leaves service reactive and underpowered at exactly the moment when resilience has become a strategic imperative.
"Installed base revenues follow technical lifecycles rather than investment sentiment. For many industrial companies, this makes service one of the most stable revenue streams – and one with significant untapped potential."
Where service resilience is actually built
Strategic recognition alone does not explain which service organizations actually absorb shocks. Our research points to a more specific answer: resilience tracks operating model choices – how service is sold, how work is structured, and how deeply digital capabilities are embedded. Two findings stand out.
The execution gap: Where strategy meets reality
Service typically contributes a quarter of total revenue – yet the investment it receives in operational budgets and R&D is a fraction of that share. The result is a business expected to stabilize earnings during downturns without the tools or capabilities to do so at scale.
Nowhere is this more visible than in the service sales model. Organizations still operating reactively – waiting for the phone to ring – carry administrative overhead roughly three times higher than their proactive counterparts. The performance gap is equally stark: proactive models deliver EBIT contributions that are multiples of what reactive setups achieve. These are not market-driven differences. They are the direct consequence of operating model choices – how work is structured, how teams are equipped, and how value is sold.
"Many leadership teams have a good intuition for where service can improve. A structured benchmark helps confirm those priorities and sequence the steps that will have the greatest impact."
The digital dimension: Automation and AI as resilience multipliers
The second differentiator is digital maturity – an area where industry is still in the early stages. Nine out of ten industrial service organizations have not yet reached operational AI readiness. But the minority that have moved beyond pilots already operate with fundamentally different economics: leaner overhead, faster response times, and the ability to scale capacity without proportional headcount growth.
Automation tells a similar story. Companies that have embedded it deeply into service workflows run at a fraction of the administrative cost of those that have not. When automation is combined with AI – predictive maintenance, intelligent scheduling – service begins to shift from reacting to failures toward anticipating them. That shift changes the entire cost and value equation.
Across these dimensions, the pattern is consistent: resilience results from systematic organizational design, not strategic recognition alone. Companies that formalize strategy, invest proportionally, and build operational capabilities turn volatility into advantage. The rest leave resilience to chance.
Assess your organization's resilience position
Our Service Resilience Check provides a structured diagnosis across five areas: strategy and investment alignment, organizational governance, operational maturity, digital capabilities, and portfolio diversification.
The assessment delivers:
- Specific insights – Compare your organization against our benchmarks
- Actionable priorities – Identify critical gaps and targeted improvement pathways
Further readings
