AGCO Finance advocates for more servitized business in the agriculture industry

AGCO Finance, a global provider of financing solutions for agricultural equipment, today launched its white paper on the potential of Servitization for the agriculture industry. Despite Servitization has already settled within several industries and showcased numerous advantages, its maturity level within agriculture is still low. AGCO Finance however, firmly believes in the value of this concept and bundled its observations and own experiences into a white paper. Through this report the company aims to support its customers to optimally prepare their businesses for this trend and to leverage the benefits it can provide.

Answering market needs
While the idea of Servitization came into being in the 1990’s, it is only now starting to gain real momentum. Basically, Servitization is an answer to the changing customer needs evolving from equipment ownership to ‘just in time’ access to equipment at the moment it is needed. Today’s customer wants access to equipment without carrying the responsibilities of ownership. Servitization entails the shift from producing and selling products to providing and selling bundled packages, or a combination of products, services, and sometimes consumables.

Servitization allows to focus on core business
Farmers these days need to spend a lot of their time dealing with regulations, environmental concerns and quality issues – which basically distract them from their core business, producing great crops. There is an urgent need to free up more time to safeguard a commercial healthy business. AGCO Finance concludes that more servitized business can enable farmers to focus on their field, attain cost transparency and flexibility and have access to state-of-the-art equipment and services. In fact, Servitization can reduce time and worry involved in purchasing and maintaining agricultural equipment.

Achieving more business value
A product that is highly servitized bundles a variety of elements (services, consumables etc.) into a single value proposition, service and contract. Rob van den Heuvel, Managing Director AGCO Finance adds: “The agriculture and food industry operate under enormous pressure, from environmental regulations to market concentration and financial instability. We believe Servitization can help farmers adapt to some of the most pressing trends and concerns they face in their business. In fact, Servitization has huge potential for this sector, including its ability to help optimize costs and achieve more business value. We hope that through our white paper we further enthuse the industry to embark on this road and leverage its strengths. AGCO finance is fully committed to support its customers throughout this transition."

The white paper is available in English and can be found here.