By Sebastian Feldmann and Markus Fournell

Industrial companies face permanent structural volatility – yet one of their most powerful stabilizing assets remains systematically underused. Based on a survey of DACH industrial companies, Roland Berger and KVD show that a purposefully designed service business is a decisive driver of corporate resilience. When product sales fall 30%, service revenue drops by only 5-8%. The study diagnoses service maturity across five pillars and provides a five-point management playbook to close the gap between strategic intent and performance.

Industrial companies are navigating a convergence of structural pressures – from unpredictable demand and supply chain fragmentation to rising financing costs, regulatory complexity, and accelerating third-party competition. In this environment, resilience has moved from a contingency concept to a core strategic requirement. Yet for many companies, the most powerful stabilizing force available to them remains systematically underused. Based on a survey of industrial companies in Germany, Austria, and Switzerland, Roland Berger and KVD analyzed how service organizations contribute to corporate resilience – and what separates high performers from the rest.

When volatility hits, service holds

The financial case for service is well established but persistently underweighted. When product sales decline by 30% during economic downturns, service revenue typically drops by only 5-8%. The installed base continues generating predictable demand through mandatory maintenance, wear-based replacement, and efficiency upgrades that deliver measurable payback even when capital budgets are constrained. Companies with mature service operations demonstrate measurably lower earnings volatility, preserve more working capital during downturns, and maintain margins more effectively than product-dependent peers.

Counter-cyclical service stability also creates operational flexibility – through modular workforce structures and remote diagnostic capabilities – and strategic freedom, as service-generated cash flows enable counter-cyclical investment and pricing discipline without the pressure to pursue product orders at any cost. Each installed asset generates service opportunities across a lifecycle that can extend from 10 to 50 years. Companies that sustain service excellence through disruptions lock in customer relationships and the full lifetime value that flows from them.

The five pillars of service resilience

Roland Berger's house of service resilience model diagnoses service maturity across five pillars: strategy, organization & governance, operations, technology, and service offering. The survey data reveals a consistent pattern: resilient companies do not excel in a single dimension – they align all five pillars into a self-reinforcing system.

On strategy, the gap between intent and execution is striking. While 84% of companies assign strategic importance to service, only 62% have formalized this in a documented strategy. Service contributes more than 25% of total revenue on average, yet receives just 7% of total investment and only 3% for service R&D. The financial consequences are measurable: companies that execute service as a dedicated business achieve superior EBIT margins; those that treat it as aftersales support leave significant value uncaptured.

On operations, the data is equally instructive. On average, 23% of service time is non-billable and unproductive – a figure that ranges from under 5% in top-quartile organizations to over 50% in laggards. Fully proactive service sales organizations contribute an average of 48% of EBIT, roughly triple the levels seen in reactive setups. Even incremental investments in automation deliver measurable results: administrative overhead drops from 40% with no automation to 15% with partial automation.

Closing the gap between ambition and execution

Technology is the critical enabler – and the most underdeveloped. Only 9% of surveyed companies have achieved high levels of service automation. AI adoption lags still further behind: 44% have identified only first use cases, and just 10% have moved beyond pilots to productive deployment. In the context of structural skilled-labor shortages, AI functions not as a cost-reduction mechanism but as a capacity multiplier – enabling smaller teams to cover larger installed bases without compromising service quality.

Digital services reflect the same pattern of underexploited potential. Despite reaching only 52% adoption on average – 35 percentage points behind traditional services – digital offerings represent the most scalable and margin-resilient growth path available. Companies that fail to develop data-driven, digitally delivered service models risk commoditization and the erosion of pricing power as traditional revenue bases face mounting competitive pressure.

The full study outlines five strategic decisions that distinguish resilient service organizations from vulnerable ones – from anchoring service in corporate strategy with proportionate investment, to transforming critical operational functions and building installed-base excellence through contract-based recurring revenue models. For C-level leaders and service executives, it offers both a rigorous diagnosis of where their organization stands and a clear management playbook for what to prioritize next.

KVD (Kundendienst-Verband Deutschland e.V.) is a co-publisher of this study.