The risks of servitization and September regulatory deadlines

It is a well-known fact that servitization comes with a heavy cash flow cost. This is why many SMEs view it with suspicion: shifting from "I sell a machine and get paid upfront" to "I provide a subscription service and get paid over 24 months" means tying up capital for months. In the first year, working capital can double, and cash flow risks turning negative. A real risk, certainly, but one that should not block the transition: it is simply all the more reason to tackle it with the right tools.

In this edition, we explore how to face this transition without risking a liquidity crunch, we talk with an innovation expert in the SME sector, and we take stock of the September regulatory deadlines that every machine manufacturer must know.

Servitization and Cash Flow: how to Avoid Cash Crunches

The shift to as-a-service models is often painted as a panacea for customer loyalty and stabilizing cash flows. However, the operational reality hides deep financial pitfalls.

In our latest article, we analyze the critical points of this evolution:

• The liquidity paradox: The company immediately covers 100% of the machine's production costs, but recovers the investment over 18-24 months through monthly fees, generating a sharp drop in cash flows.
• The explosion of hidden costs: Fixed and recurring expenses (maintenance, spare parts, IoT software, personnel) erode margins if they are not calculated in advance across the entire contract duration.
• The gradual roadmap: The transition must be progressive. You start by leveraging After-Sales services, move on to scheduled maintenance contracts, use IoT to cut costs, and only at the end do you land on complex models like Pay-Per-Use.
• Hedging financial solutions: You don't need to act as a "bank" for your customers. The article shows how to use advanced formulas and tools to outsource credit risk, relieve financial tension, and recoup production costs immediately.

An essential read to calculate the impact on working capital, correctly price long-term fees, protect cash flow, and prevent an excess of subscription contracts from turning into a liquidity crisis.

Read the article

Expert Talks with Alessandra Gruppi: managing Innovation in SMEs

When talking about servitization and digitization in SMEs, the real bottleneck is cultural resistance to change.

In one of the latest episodes of our Expert Talks podcast, we explored this topic with Alessandra Gruppi (president and founding partner of Strategia e Controllo, a consulting firm for innovation and SME transformation). During the interview, we discuss how a traditional company reorganizes its way of thinking about costs, revenues, and customer relationships when shifting from a "sell a product" model to a "guarantee a result" model.

With her, we analyzed how to overcome organizational silos, align management's strategic vision, and turn innovation into a structured and sustainable process for business growth.

Watch the full episode on the Things5 YouTube channel to discover how to successfully manage the digital transition in your company (the interview is in Italian, with English subtitles available).

September Deadlines: compliance, CRA, and Data Act

September brings two crucial regulatory deadlines for connected machine manufacturers:

• From September 11, 2026, the Cyber Resilience Act (CRA) introduces the obligation to report vulnerabilities and security incidents on digital products.
• From September 12, 2026, the Data Act requires connected products and related services placed on the market to be designed according to the access-by-design principle, allowing users to easily and securely access data generated by product usage.

Servitization works when you manage to know the real cost of serving each customer, identify who represents a risk due to underutilization of the machine, and reduce operating costs while maintaining support quality.

These answers come from real machine data. Things5 provides exactly this: a platform that collects real data from your connected machines, analytics that help you turn data into operational insights, and AI agents integrable into your products that optimize support and maintenance interventions.