At PTC Live Service Exchange in Boston this past June, service leaders from major manufacturers told of their companies’ increasing investments in service transformation.
Presenters from manufacturers as diverse as Dell, EMC, and Unisys in IT, and JLG (access devices), Joy Global (mining equipment), Sikorsky (military aircraft), and Trane (HVAC equipment) – in older-line industries – attested to their companies’ cultural shifts from the product-centric strategies of the past to a new focus on superior service.
All spoke of how this service transformation promises to deliver, not just greater value to their customers, but also higher revenue and profits for their own companies.
For these service leaders, along with most in the Service Exchange 2014 audience, service processes are rapidly changing from traditional break/fix scenarios and service level agreements to true Service Lifecycle Management. They are counting on smart connected products – through the technology commonly called the Internet of Things – to help them plan for, proactively perform, and even predict the best service outcomes for their customers.
Products designed for service? Yes, this vision grows closer to becoming reality. As smart connected products collect critical performance data – continually, in real time – the insights gained from service processes are contributing more and more to product design and engineering. Some manufacturers now even talk of the product as a service.
Yet obstacles remain on the journey to service transformation. Success, as Service Exchange speakers asserted, depends on having a complete SLM system – comprehensive in capabilities, and connected to all corners of the enterprise. Two factors, in particular, make this difficult:
- Both the products being serviced (more versions, more personalization, more embedded software) and the service organizations themselves (more countries, more languages, more regional distinctions) have grown far harder to manage.
- Companies can zero in on individual processes – for anything from service parts planning to field service management. But when they implement point solutions, silos form – and service teams fail to work together for high efficiency.
Bottom line, the impact from a complete SLM system can be huge. Today a sophisticated new product for industry, the office, or the home can last for 10, 20, or even 30 years. Revenue and profit from ongoing service may be many times the product’s original sale price. A manufacturer who stays product-centric – i.e., “sell the product and leave the service to others” – misses the chance to significantly add value for the customer, and significantly add to their own return on investment, throughout the product’s lifecycle.
The promise of service transformation is true SLM. And with software and connectivity as the enabling technologies, smart connected products help make this goal achievable. The path to a complete, connected SLM system takes three fundamental steps:
- Bring the SLM pieces together. Best-in-class solutions for key service functions can be tightly integrated. These tools help plan and manage parts supplies and pricing, field service activities, warranties and contracts, technical information, and more.
- Connect processes to the product. Connected products put services at the center of a cloud-based network linking people, products, and processes. Remote monitoring and diagnostics allow effective deployment of resources with minimal errors and waste.
- Make smart use of the data. Now, with performance data so readily collected from smart connected products, just what to do with all of this new information? Well, to start with: forecast needs for service parts and people, reduce inventories, minimize unnecessary dispatches, increase first-time fixes, cut overall service costs …
In addition, a complete product-smart, service-smart SLM system can coordinate service processes with Product Lifecycle Management and other enterprise applications – CRM, ERP, and more. The result: a continuous loop of product and service improvement.
Yet the complete SLM system doesn’t stop there. The opportunity goes beyond service transformation. What’s happening today can rightly be called a service revolution.
At Service Exchange, we considered the examples of Borders and Amazon. One retailer was quick to grasp the web as an opportunity to change how consumers buy and read books. The other was fatally slow to see and meet this challenge. We all know how it turned out.
Now, in manufacturing’s own world of service, as the Internet of Things steadily and inevitably takes hold, which will your organization resemble more? Borders or Amazon?
If that’s your smart connected product … continually feeding vital performance data to your connected service and product development processes … in a complete SLM system, integral to your extended enterprise network … here’s a not-so-bold prediction:
The revolution will be yours. You’ll be an Amazon of your industry. You’ll maintain your lead – and even stretch it – in the race for product and service advantage.
Brian Lindauer is PTC’s Senior Vice President of Solutions Development. He currently leads global strategy and go-to-market development for the company’s SLM solutions.