The real deal: How edge and IoT technologies boost business
Powerful computing is getting things done – even with no people around. How? Most credit goes to the use of edge and IoT technologies.
As consumers, we’re used to the as-a-service model in our everyday lives. When was the last time you bought a CD or DVD? I can’t remember because my whole family streams everything. My sons and I even get my razor blades and shaving cream as-a-service. Of course, I still seem to be paying for everything, but that’s a different story!
What is servitization?
Servitization is a concept of selling an “outcome as a service” as opposed to one-off sale. With a servitization business model, customers pay a fixed cost per-unit of service consumed, while the ownership of the system remains with the technology provider, who is also responsible for all operational costs.
Servitization was popular in manufacturing dating back to the 1980’s as a way for manufacturers to differentiate themselves from their competition and find ways of getting closer to their customers. It’s increasingly expanding from a consumer model to a broader business approach when the capital expense of a piece of equipment is often a barrier to buyers.
Manufacturers are attracting customers by providing access to equipment and billing monthly based on usage metrics like hours of usage, or throughput.
They do this by creating an ongoing relationship based on a monthly transaction monetarized by such things as usage, uptime or utilization rather than a one-time transaction or sale.
When you turn services into a growing, vibrant part of your business, you can open new sources of revenue and improve margins while simultaneously staving off commoditization and making sustainability a differentiator.
Servitization requires smarter products
To enable servitization, equipment manufacturers must create more intelligent products to capture the information required to bill the customer accurately.
They also need to ensure the equipment is always working and have the data available to predict required maintenance before it breaks down.
Embedded internet of things (IoT) enables sensors to capture pertinent information such as usage, throughput and equipment performance to drive the as-a-service business process.
By creating a digital twin of the equipment, both the manufacturer and customer can monitor the performance and leverage machine learning algorithms to identify how efficiently it is being used.
The customer experience in manufacturing: Taking cues from utilities
Manufacturers can improve CX taking lessons from utility companies, which have leveraged innovative technologies to meet customer needs.
Reinventing service models
Let’s use a fictional example of a company that manufactures washing machines and wants to introduce a “wash-as-a-service” model, where they bill customers based on the number of washes the machine performs monthly.
If the customer is a family of five that uses the washing machine daily, they would pay more than a single person who uses it once a week. But the common denominator is that the washing machine must work at peak performance whenever it’s needed.
This new service offering requires outcome-based contracts that include performance measurements of wash cycles and Service Level Agreements (SLAs) with 100% availability.
To build an immersive customer experience, an app could provide real-time data about their wash cycle: when it’s finished, how many have been run that month, cost, carbon footprint and how well the machine has performed.
This information is leveraged by the manufacturer and a third-party maintenance organization to manage the end-to-end service lifecycle by integrating all aspects, from installation management, warranty, service ticketing, field service, in-house repairs, billing, and finance.
The service will also reduce the overall environmental impact of the machine by tracking energy and water consumption, as well as managing de-commissioning and recycling to keep the equipment within the circular economy.
Discover your path to future profitability through servitization NOW.
Service precision reduces costs and improves CX
The availability of machine data helps the manufacturer and service partner rethink service management operations by leveraging AI-enabled advanced scheduling to prioritize engagements, improve resource utilization, and reduce travel times.
When a service technician is sent to repair a machine, they have all the necessary parts and the breakdown information at their fingertips on a mobile device. They can even be walked through the repair by using augmented reality glasses.
This means the problem can be resolved in one sitting without lengthy delays caused by ordering replacement parts after the appointment.
Three step model to digital transformation: An IoT and field service story
As demands for energy increase and natural resources deplete, digitization creates opportunities.
Servitization: Revolutionizing equipment ROI
With improved visibility from IoT sensors designed into the washing machine, the manufacturer can now continuously monitor the performance of all equipment in use. This enables them to track the health, and performance against the SLAs.
They can also leverage the data from across all machines and use artificial intelligence algorithms to identify trends and predict risk of failure. They can then propose preventative maintenance approaches to reduce breakdowns and boost customer service.
This information can also be fed back into the R&D teams to design out any common issues in the next iteration of the machine.
It’s clear that the as-a-service business model is here to stay both in our personal lives, and increasingly, to drive across-the-board gains for today’s businesses.
Regain control of your business.
From manufacturers to high tech,
innovation drives B2B success.
And it starts HERE.
