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Have you adopted IoT and are looking to increase aftermarket services revenue or control cost-of-service visits? Leveraging smart field services can improve productivity, reduce downtime, and turn data from connected "things" into predictive actions and new business initiatives.
The pandemic reshaped the entire service landscape and accelerated digital transformation as enterprises looked for smarter, safer ways of supporting customers. However, rapidly changing technologies and the unpredictable nature of customer demands make the market unsettled. Many enterprises are still struggling with fix times due to supply chain delays resulting in challenges to finding effective ways to boost aftermarket revenue.
This is a massive issue for enterprises as service is critical to both customer retention and the bottom line. According to the Harvard Business School, increasing customer retention rates by only 5% can increase a company's profits by 25%-95%.1
Data is driving the move to servitization
The field service market is highly competitive, and enterprises must look to innovative servitization models to improve efficiencies, deliver more personalized service, and stay ahead of the competition. Servitization is a proactive approach to field service management built around a subscription model and creating new customer relationships. This isn't a new model, however. Rolls Royce is a well-quoted example, moving from selling jet engines to a power-by-the-hour basis, continually monitoring engine performance. Smart field services enable predictive and preventative maintenance, which is central to most servitization models.
According to IDC, the growth in connected "things" is expected to generate a gargantuan 79.9 zettabytes of data by 2023.2 Much of this will come from business-to-business and business-to-customer interactions. This data is fueling a move to servitization as customers increasingly demand always-on, robust, reliable devices tailored to their requirements. It is unsurprising that the global field service management industry, which generated $5.2 billion in 2021, is estimated to hit $29 billion by 2031.3
Delivering IoT services enables an enterprise to compete for projects more effectively and starting relationships with services also positions an enterprise for large deals when its customers replace or upgrade equipment.
Interconnectivity is changing the service model
Equipment manufacturers are facing growing challenges in terms of managing costs and maintaining high service levels within aftermarket services in an increasingly aggressive marketplace. In addition, over the past two years, supply chain issues have caused major inventory headaches.
Aftermarket services are becoming imperative for manufacturers. According to Deloitte, many manufacturers generate between 40 and 50 percent of their overall profits from services. Some generate all their earnings from services, with devices sold not to yield profit, but to drive after-sales in a large installed base.5 In addition, manufacturers that focus on services have approximately 80% of their installed base under service agreements, which allows them to continue to innovate while delivering constant revenue streams.
Smart field services also enable manufacturers to capture a bigger share of aftermarket revenue and work closely with customers that may otherwise migrate to cheaper competitors, such as searching for discounted spare parts online. It also provides better insight into equipment in the field, enabling optimized spare part management. Having this knowledge in advance also ensures the right technicians and parts are dispatched should a site visit be required, expediating any fixes.
From an installation and maintenance perspective, smart field services can significantly reduce the time to install and commission equipment at the customer site while ensuring firmware and software updates are done. These updates can help to fix any security vulnerabilities and are essential building blocks in securing IoT devices and their lifecycle management.
Remote monitoring in action
Sensor-Technik Wiedmann (STW) has implemented a solution powered by Software AG's Cumulocity IoT platform for remote condition monitoring of exhaust gas treatment systems that have been retrofitted to London buses. It is part of the city's ambitious plan to create an ultra-low emission zone.
Cumulocity, which STW has rebranded "STW machines cloud," harvests data from on-board telematics modules, which can be monitored and analyzed in real-time. In this predictive maintenance scenario, big data can be examined to detect patterns that alert to problems in the retrofitted systems or bus engines.
WAINS Gmbh uses smart field services capabilities to hunt down pests in a very different use case. Insects destroy between 5% and 20% of the global harvest, and the problem is worsening.
The company's solution, dubbed "trapice," enables users to detect pest infestations early in the cycle and implement the necessary countermeasures. Trapice uses Software AG's Cumulocity IoT platform to digitize pest control. Cameras are used to monitor when pests get caught in traps remotely. Sensors capture additional data on environmental variables that may trigger an infestation, such as humidity. Data is sent to the Cumulocity IoT platform, where users can access data on their dashboards to take any protective action necessary.
Selling solutions to customers' problems
Smart manufacturers are creating more value by focusing on long-term business partnerships and solving their customer's problems as seamlessly and efficiently as possible. This is a win-win situation for both the manufacturer and the customer alike.
Manufacturers who fail to adopt IoT field services will see their markets rapidly shrink as they lose market share to these smart manufacturers and trailblazers. At the same time, customer relations and loyalty will weaken and crack.
The manufacturers that can use IoT to differentiate themselves and make a difference when a customer wants a new device will be the ones that survive and thrive. IoT smart field services are a great way to build a stronger relationship with your customers by ensuring they get the most uptime and output from their production assets.
