01. Copperberg Podcast
Episode 13
Making Servitization Stick: Lessons on Alignment, Value, and Trust with Umayal Palaniappan
Running a smart and agile manufacturing operation
“Servitization succeeds when the product becomes a subset of service.” That is Umayal Palaniappan’s bold take on what it truly means for manufacturers to embrace a service-led business model.
02. CONTENT
This episode explores the human, operational, and commercial shifts driving servitization, providing leaders with practical insights to scale with confidence.
Drawing on two decades of shaping services strategy in a global engineering company, Umayal joins Copperberg Conversations to unpack what it takes to move from product to outcome, and why AI should be seen as a helpful enabler rather than the headline.
Inside the Episode:
- Origins and Curiosity: How early influences and a systems-first mindset carried Umayal across continents and functions.
- AI as a Supporting Tool: Why AI is not a magic wand, where it supports smarter service models, and why adoption often falters without operating model change.
- Scaling Servitization: Clear routes to value, early KPI signals that pilots are ready to scale, and the role of modular offerings in balancing personalization with efficiency.
- Cross-Functional Collaboration: The lived-experience empathy needed to bring engineering, service, and business teams together.
- Leading Change: What a penguin colony on a melting iceberg can teach us about urgency, alignment, and the humility to pilot, fail fast, and iterate.
Servitization is not won on strategy alone. As Umayal points out, it is clarity, collaboration, and trust that carry transformation across an organization. For leaders, the challenge is less about technology and more about bringing people along the journey.
03. Speakers
Copperberg Conversations on Manufacturing Matters is your go-to podcast for candid discussions with the industry’s top thinkers and innovators.
04. Listen now
Making Servitization Stick: Lessons on Alignment, Value, and Trust with Umayal Palaniappan
05. Transcript
Nina Roper Yearwood (00:35)
Hello and welcome to a new episode of Copperberg Conversations on Manufacturing Matters! I’m your host, Nina Roper Yearwood from Copperberg. Whether you’re listening during your morning commute or winding down after work, I’m so glad you’re here. Joining us today is Umayal Palaniappan or Uma, someone whose journey reflects both technical depth and strategic breadth needed in driving change in services and digital.
Uma’s journey started in Malaysia with early software engineering and human factors engineering roles before she found herself at Rolls-Royce, where she spent two decades growing from a curious manufacturing graduate trainee into a servitization strategist. She thrives in solving complex puzzles, whether that’s transforming how a company approaches services strategy or streamlining processes across multiple continents.
Outside the boardroom, she’s passionate about building bridges, connecting business functions, fostering international partnerships, or helping the next generation find their voice. Uma is currently exploring different sectors through board advisory and mentoring before seeking her next career move. In her spare time, she enjoys spending time with her husband and their spaniel in Derby.
Uma, welcome and thank you so much for being here! So excited to pick your brain today!
Uma Palaniappan (02:12)
Thank you so much for having me, Nina! I’m super excited too! It’s great to be doing a podcast. Who knew these kinds of things existed, you know, when we were kids and now it’s like all the rage.
Nina Roper Yearwood (02:21)
I know, it’s like a radio show, but online, essentially. And we kind of get to be our own radio hosts. So, I’d love to go back a bit to start. Could you give us an overview of what brought you into the world of engineering and technology?
Uma Palaniappan (02:26)
I think if I go all the way back, it’s probably Lego and a BBC computer. It’s what I was exposed to, right? As a child. My dad had great interest in sort of tech and computer and IT and everything in general. And so it made me curious.
I was exposed to engineering growing up in Malaysia as well. There’s a lot of focus on the sciences. And so it’s very easy to get involved in engineering and technology. It’s encouraged and I had an aptitude towards it. So I studied computer science and I have a master’s in ergonomics, which is otherwise known as human factors engineering. And that has given me the foundation and credibility to understand not only technically how things work, but the human and machine interaction, how people play into change and how systems and everything really works together and that you can’t have one without the other.
Nina Roper Yearwood (03:52)
You have worn so many hats over the years and moved across continents, essentially. What’s kept you curious over the years?
Uma Palaniappan (04:03)
That’s a great question. I think it’s the fact that systems exist in any type of function or area. It’s not exclusive to just one particular company or one particular industry. And so the ability to constantly change and challenge myself in different sort of areas from purchasing to manufacturing to services to transformation. It means that you can always apply your learning and you can always find new ways to solve problems. And that’s probably what’s kept me curious.
Nina Roper Yearwood (04:43)
Okay, I will jump right in. By the end of 2023, there was a great buzz around generative AI and people outside of tech circles were excited about it. In manufacturing, I’ve heard it being talked about in the context, linking it almost to advanced services, smarter services, and as well as outcome-based models. So really big promises, shiny promises. So, from a Copperberg perspective that’s looking at it from, you know, outside looking in and you from within a highly technical industrial environment. How did you see AI developing around those times?
Uma Palaniappan (05:33)
I think the difference is that AI has been around for a while. Artificial intelligence has been around for a while and it’s been used very effectively by many organizations, including the one I worked at, Rolls-Royce, in terms of determining different service intervals or how total care contracts are constructed and managed. And so it’s not something that was new, the capability around artificial intelligence or investing in artificial intelligence wasn’t unusual.
But the difference is generative AI, which is large language models became mainstream. And there’s always the hype curve. And, if you Google the hype curve that exists everywhere. So it became an interesting dichotomy where it was exciting, everybody who then understood what it could be got super excited about it. And then you had very practical, seasoned people who understood the technology and the structure going whoa, whoa, whoa, yes, it’s interesting. Yes, it’s super cool, it has a lot of potential, but it’s not a magic wand that’s going to solve all your problems.
And that’s settled a bit more. And now you’ve got, you know, agentic AI that’s come around. I think that’s how you say it. And that has, you know, got leaps and bounds ahead of it as well.
Nina Roper Yearwood (07:11)
So now that, like you said, we’ve settled, where do you think engineering companies, manufacturing companies are making great progress in making that AI into something that can be really useful and they can derive value from in supporting their shift towards servitization? And where are they still getting stuck?
Uma Palaniappan (07:45)
I think a lot of the time people get stuck in the change. So there’s a very little amount of sometimes appreciation that this is a massive change program and that change accounts for 50% of implementation of anything, especially when it’s something like artificial intelligence. Because you can no longer operate in the way you used to operate. Because if you did that, then the take up of the AI would be ineffective. You have to account for how people’s roles are going to change. Yes, it augments the role, it’s not meant to replace the human. But how that happens, and that whole change program is where I think organizations get stuck because they just think, here’s the tool, the tool’s great, the tool’s gonna give us all of this benefit. Well, why aren’t, why isn’t it being used effectively? Why aren’t we getting the results that we want to see? And it’s because the operating model hasn’t necessarily changed. The buy-in isn’t necessarily there. People haven’t been brought along on the journey to show how this enhances what they do to bring about more value. All of that has changed.
Nina Roper Yearwood (09:09)
Fantastic! That really made me think about zooming out now and looking at servitization as a broader strategic imperative for companies.
Nina Roper Yearwood (09:39)
So I will ask you a very stupid question and tell me what you think about this. So, generative AI, AI has been around for many-many years as you said. But now I see from a media perspective, from coverage perspective essentially, there’s this momentum, there’s this general excitement, there’s this, you know, people are suddenly becoming AI experts in matter of years. And so, why do you think, what is driving this momentum now? What is, why is this so timely and crucial?
Uma Palaniappan (10:13)
I don’t think that’s a stupid question at all, Nina. In fact, I don’t know if I’ve got the right answer for the question. It’s a good question. Why now?
So this is obviously my opinion. Products have always existed, right? Like companies offer products and if you look between competitors, sometimes the differentiation within the product isn’t always very stark. And that’s because there’s a standard everyone needs to adhere to for a customer to want to buy a product, right?
Then, it’s the Kano model, almost becomes this is commonplace, so what – what’s new, what’s extra, what’s different? And then I can tie that into servitization to go that’s where companies can differentiate themselves, right? So they’re able to provide something beyond just the product. So generative AI, because it has so much power and it is powerful, right? It has the ability to and has fundamentally disrupted how things work and change. And it’s almost like when the computer first came into offices, it was capability and technology and it allowed you to do so much more.
So now is the time because if you capitalize on something when it’s in its early days or when it’s, you know, has so much impact, then you are making yourself or differentiating yourself and putting yourself in a position of being ahead of your competitors or being able to offer something that is more meaningful to your customer in terms of value. And also you get better return on investment. And so all of this in a long-winded way is I think why things are important now and why generative AI is having so much of a center stage spotlight at present. Does that make sense?
Nina Roper Yearwood (12:33)
Yeah, it does make sense! I’m just going back to what you said about servitization initiatives and change being fundamentally hard.
Nina Roper Yearwood (12:56)
I would ask you a very broad question now. What do you think does it take for a company to successfully scale their servitization initiatives? So from early pilots and to impactful, sustainable business models.
Uma Palaniappan (13:08)
So I touched on this earlier and I think that principle sort of applies. It’s the clear route to value. So it has to be clear route to value for the customer and also then route to value internally for the organization offering the service, right? Cause it doesn’t make sense if you’re the only one who makes money in it because then realistically, I don’t think your customer necessarily is going to buy the product. They need to see value in it. And what you think is value for your customer isn’t necessarily true. You have to understand what the customer deems to be valuable.
Nina Roper Yearwood (13:49)
So in paving that route to value, it’s essentially, you know, paving the way to your servitization journey, what critical capabilities, skill sets, for example, or mindsets should companies prioritize to prepare themselves for this?
Uma Palaniappan (14:13)
So we talked about pilot earlier. So I think piloting, being agile, failing fast, iteration, those are key sort of skills that need to be considered.
In terms of capability, it would be a cross section within the organization. So you need almost your full value chain in that sort of change team so that you understand all aspects and you build a product that makes sense because you can’t have just your engineering team design your service and you can’t just have your service team sort of design what the product needs to look like, right? They have to work together. So you have to have all the different elements in your value chain working together. And that is one way of ensuring that business model will work and that your operating model will work because both are key for successful pilots to then become offerings.
Nina Roper Yearwood (15:22)
So now my question is, for engineering-driven cultures, transforming, I mean, it all sounds nice, right? It almost sounds like a pipe dream, working together, cross-functional collaboration. It all sounds very ideal but of course when it comes down to rolling up your sleeves and the reality, it doesn’t always look very pretty like that. Why? Why is it so challenging for engineering-driven cultures to collaborate cross-functionally?
Uma Palaniappan (16:02)
So, to collaborate cross-functionally, I think it’s because they don’t understand each other’s lived experience. Right? So someone who is in engineering doesn’t necessarily understand how difficult it is for someone in service. And someone in service doesn’t necessarily understand how complex or how much time it particularly takes for an issue, a technical issue to be solved.
And so pulling people together and getting them to work together is a change. This is why the change takes time. You can accelerate it by creating environments that allow for that, right? So you pull them in together, you give them away, you give them a common goal, you ensure that the vision is clear and that they all buy into that vision. And all of these different change steps helps with making sure that collaboration is possible. And it is, it’s hard, change is hard and, you need them to work together and you need them to understand, how things are for one another.
It’s an interesting thing I remember Rolls-Royce doing at one point. They used to have these secondments where engineers would go and do an airline secondment. So it gave them a real understanding of how the customer worked, how their product behaved in service, and how the customer viewed and valued what was being offered. Because there’s nothing like experience to ground you in what’s happening.
Nina Roper Yearwood (17:48)
Okay, I can see that you have your penguin with you behind. Yes, I can see his little beak. Yeah, peeking out. So what’s the story behind that? Why is he here?
Uma Palaniappan (17:52)
Yes, Hero, Hero is my penguin. Hero is here because Hero for me is a reminder of how to lead change. Hero is a characterization from Kotter’s My Iceberg is Melting. So it talks about how a colony of penguins discovered that their iceberg is melting and how they manage that change and what they need to do about it.
And it’s based on Kotter’s eight steps for leading change. And one of the keys, it constantly reminds me that change lands differently with each individual. And so some people, some of these penguins believe that the iceberg was melting, some of them didn’t believe in it at all. And so how do you glue people together? There are steps. You create a sense of urgency, and then everyone likely bands together, some more reluctantly than others. But then you work towards how you solve that.
And the future state is going to be different. And you need everybody along the journey, you need the naysayers as well. You need the people who are more conservative and you need the people who are going to go, but well, what about this? But that won’t work because then it allows for you to address issues because it’s important because it’s important to someone and it’s important to some part of the program that you may not necessarily have appreciated because we have interdependencies in processes in data or in the way that something has been operating model has been designed that you need to be aware of.
And I know this all sounds very utopian but this is why failing fast having pilots constantly having the humility to admit, right, this doesn’t work, we need to do things differently, helps in making sure that this kind of change will stick.
Nina Roper Yearwood (20:01)
It’s a very big undertaking, right? Because it forces people, servitization, it forces people to rethink from product to outcome and from product to customer and how the customer uses an equipment or a certain machine that you provide them. What does it take to make it stick when it comes to alignment? From leadership to the shop floor, the front lines, how do you make that stick?
Uma Palaniappan (20:35)
So to start with, you need a very clear vision, right? You need to know what is it that we’re trying to achieve. And then it needs to resonate with each individual. They need to know how what they’re doing affects the outcome. They need to see themselves in that ecosystem to understand the importance of what they’re doing, the importance of the change, and therefore how that affects the customer. Because if you have that customer focus or customer first mentality, then you’re all aligned in the same direction. And then change sticks because you know that what you’re doing and the role you play is going to have an impact.
Nina Roper Yearwood (21:24)
How do you actually define as a large organization value for the customer? Because I think servitization and value are kind of tied together as well.
Uma Palaniappan (21:38)
Yes, so, you have to understand what the customer’s outcomes are, right? So what is it that the customer wants to do. For the customer your product is just a tool in them achieving their outcomes, right? So that is where the value lies, and that’s where you understand what it is that the customer thinks is important and you almost make yourself a subset and you are a subset of their outcome.
And that’s what I mean by value because if we just created products in a vacuum and then chose to sell them, somebody would buy them because somebody would find value in them but you don’t necessarily know what about your product is providing them value. The closer relationship you have with your customer, having a servitization model brings you closer to your customer because then you’re in partnership with your customer to help them deliver their outcomes, you will therefore then have an understanding of what is valuable to them.
And then internally, anything you create needs to be modular. And the reason it needs to be modular is because then you’re able to provide that personalization to your customers. So if you think about your organization and you’ve got multiple customers, different customers will value different things. So, you can’t have – well, you can, I suppose, but it becomes difficult to scale – you can’t have a personalized offering that’s so individual that you then have multiple, you have to almost run multiple businesses because you’re trying to tailor that to every single one of your customers. But the reality is your customer needs personalization. So how do you create that personalization without creating multiple businesses within your business? You have modular offerings.
So for you, module A, B and C is probably what’s going to give you the personalization you require. For another customer, modules B, F and G is what is going to give them the personalization they need. So that way you’re able to scale your business accurately with the types of modules that are used most often. And then whether or not, and sometimes you need to make a judgment call. I can’t offer that particular element of the service because it’s not my, it wouldn’t work for my business, right? Because you’re the only customer asking for it. And maybe if you’re a strategic customer, I might invest in it and then see if other customers will buy it. But if not, I may not be able to offer it to you, or I may partner with somebody else who could offer you just that section, so then you do get a far more personalized offering.
Nina Roper Yearwood (25:04)
Going a little bit off tangent here, because I imagine that that requires a lot of feedback from the one who offers the service and to the customer. So, of course, feedback could be in the form of what can be improved in terms of the product and what could also be improved as a consequence to the services that are offered. And so just to also be aware of the booby traps when it comes to this, what should we be aware of as companies when it comes to essentially being open to receiving the feedback?
Uma Palaniappan (25:55)
I think it’s having good relationships with your customer, finding a customer that is willing to experiment with you with the focus of them receiving a better outcome as a result and that you are able to then provide insights and you’re able to help them with their outcomes better.
So, it’s getting closer to your customer and building that. So it does take some iterations of relationship to get to that point. If you’re a brand new company and you’re starting out and you don’t have those established relationships, then I think it’s hard to, you have to create trust first. And then you’re able to work with them to be able to find out whether or not the feedback that you’re receiving and whether your product is being well received, whether your service is functioning in the way that it needs to. And this is why you have KPIs, you have a relationship manager, you have sort of infrastructure around your offerings to constantly get that feedback. Is that the answer to your question or not?
Nina Roper Yearwood (27:18)
Well, a little bit. I mean, I’m always interested about KPI because KPIs are at least absolute. So you kind of have something to cross reference and I think you cannot improve what you cannot measure, right?
Nina Roper Yearwood (27:39)
So just going back to that, KPIs, what KPIs should you start with?
Uma Palaniappan (27:46)
You should start with the KPIs that affect your customer the most. And then you also need to have KPIs that have to do with your financial basis, right? So the route to value, we spoke about that earlier. So you quantify that route to value for the customer and for your company. You need both. Generally, I think if the finance guys are happy, it is usually a good thing for the organisation.
Nina Roper Yearwood (28:18)
Okay, so it’s always trying to, I think, consolidate those different KPIs for different people.
So as we’re about to close and I just have a couple of final reflections to ask you, Umayal. This has been really interesting. So as engineering companies begin or revisit their servitization journey, what key issues should leaders prioritize?
Uma Palaniappan (28:49)
Clear communication. I mean, everybody always says this, but it’s very important in terms of clarifying why we’re changing to a servitization model. What’s the benefits of it? What’s the strategy of the organization? Where are we going? How are we positioning ourselves in the market? And ensuring that that message is understood all the levels through the organization and people understand how their role can have an impact and help the organization succeed because the individual success is the organization’s success. And so a people-centric focus internally and then the people having a customer-centric focus will allow for success all around.
Nina Roper Yearwood (29:42)
I’ll open up the next question for you with something like a slum book type of thing. Complete this sentence for me: “Servitization succeeds when…
Uma Palaniappan (29:49)
… product becomes a subset of service”.
Nina Roper Yearwood (30:03)
Wow! Do you want to elaborate on that?
Uma Palaniappan (30:07)
I can elaborate on that. So if you think about servitization as a journey, first you have a product and then you offer services alongside the product. And then you, so then your product and service is almost on equal footing. And for me, the future is where the product is a subset of the service and you’re able to offer services and it’s agnostic of product. And in that case, your servitization model has truly transformed to the next level in that journey or next evolution in that journey because you’re able to then offer your services on products that are not your own.
Nina Roper Yearwood (30:49)
So for people, for our listeners who want to continue this conversation with you or want to connect with you on this topic, where’s the best place for them to find you?
Uma Palaniappan (31:03)
Well, in this day and age, the best place is always LinkedIn. So I’m always open to having conversations about what kind of services challenges people are facing in their organizations or having a sounding board to go. This is how we’re approaching things. Do you have a different point of view? Or, and I’m always interested in keeping a finger on the pulse of the challenges that companies are facing. Because let’s face it, a lot of the things that we talked about are quite utopian. And you’re right, it’s, you know, the reality is hard. And sometimes the only way to get through things that are difficult is by talking to other experienced people in the same space and considering either trying something differently or just the support that you’re doing the right thing. It just takes time sometimes to get through. We often want instant gratification or we expect things to succeed on the first go and the reality is iteration is important and having people just talk to you about that is also valuable.
Nina Roper Yearwood (32:09)
Yeah, never preemptively throw in the towel. Okay, so Uma, this has been such a thoughtful and eye-opening conversation with you. Really a lot of conceptual things to also take home. Thank you for your insights, your stories, especially the penguin, Hero, and for spending the time with us today. We wish you all the best in what’s next and we’ll be following along.
Uma Palaniappan (32:13)
Thank you very much, Nina! I really appreciate the opportunity. I had a great time at the Copperberg event earlier this year and it’s a wonderful community. You’re doing great stuff. And it’s lovely to be on this podcast and have the opportunity to talk about a subject that I am passionate about.
Nina Roper Yearwood (32:57)
Fantastic! To our listeners, you will find Uma’s contacts where you can find her on LinkedIn in our show description.
06. Related resources