To stay ahead of the competition, businesses need to think beyond delivering the best product at the best price. As competition intensifies, enterprises innovate to differentiate and add value to customers. More and more enterprises explore servitization to further such ends.
Servitization entails a fundamental change to the entrenched sell-break-fix business model. The new model demands selling service instead of the product.
At one end of the servitization, manufacturers sell machinery and offer after-market support. On the other end, the manufacturer installs machinery at the customer’s location and charges based on usage. For example, a compressor manufacturer charges for cubic feet of compressed air consumed instead of the cost of the equipment. Either way, the field service business monitors and services the equipment at the customer’s location. The field technicians work to pre-empt downtime and improve performance.
Servitization has made big strides in recent years, to offer some valuable benchmarks and working models worthy of emulation.
Rolls-Royce, the popular luxury automobile maker adopted servitization as early as 1962, by offering its engines on a service-mode. Rolls-Royce’s “TotalCare” aero engine program allows customers to pay based on the number of flight hours. Rolls-Royce monitors engines remotely make pre-emptive repairs and replace broken parts.
Philips’ “Light-as-a-Service” lights up the Amsterdam-Schiphol Airport. Philips installs the lights at the airport and retains product ownership, while ENGIE (a French-based electric utility company) serves as a strategic partner to upkeep the lights. The Schiphol group pays for the services consumed. This servitization model reduced energy consumption at the airport by 50%. It also frees the airport company from upfront costs and maintenance concerns.
Trane, a subsidiary of Ingersoll Rand® proposes Trane PACT™ (A Performance Agreement for Comfort from Trane) which offers air-conditioners a “comfort-as-a-service” model. According to Salesforce, 74% of manufacturing executives believe that such services will become their primary revenue source within the next ten years.
Servitization works through remote asset monitoring and predictive maintenance. The successful adoption of the model requires a well-oiled field service platform. The pre-requisites are IoT and analytics, orchestrated through service management software.
Read more: 7 Reasons Why You Should Use a Field Service Management Software
The best field service management software helps in the following ways:
A paper or Excel-based coordination can breed silos and information blocks, inhibiting timely interventions. Servitization requires a 360-degree view of customer interactions across channels. A field management software integrates information from different touchpoints into a customizable and integrated dashboard.
IoT sensors exchange data from the machinery. AI models use such data to predict machinery behavior without explicit pre-programmed rules. The insights enable troubleshooting even before customers realize the problem. When the device emits signs of trouble, the algorithm schedules a technician.
Read more: How IoT and AI Drive Field Service Innovation
A good field service management software matches technicians to work-orders. The algorithm considers expertise, location, urgency or work, and other relevant factors.
When the connected product reports the fault, field technicians get an insight on what is wrong and can come prepared. Novice field technicians may contact a remote expert and improve first-time fix rates. Caterpillar Inc. for instance, leverages Augmented Reality to repair portable generators fast. The field technician uses an AR-enabled tablet to receive relevant guidance and information on the screen.
Read more: 5 Good Reasons to Adopt a Service Management Software for Remote Work
A service management software offers the scheduler access to inventory levels, to ensure dispatch with adequate spares. Auto-sync of inventory levels with work completed enables timely reorder of spare parts and prevents hold-ups.
Servitization depends on regular inspections. The best field service management software auto-generates inspection forms and checklists, to ensure field agents do the right thing and file the correct reports.
Field management software enables onsite invoicing, enabling contactless delivery of invoices, and reducing the time to pay. A laser company plagued with unpredictable invoicing switched over to charging by the number of laser pulses. The switch over streamlined invoicing, increased overall revenue, and improved customer satisfaction. Servitization also offered customers a predictable cost model, allowing them to plan the pulses they would use.
Servitization works when the enterprise turns data into a strategic tool that improves the customer experience. The data collected by an integrated field service management platform and subject to analytics will generate insights that become the basis for new business and pricing models. Integrating analytics and reporting to the operational dashboard improves overall control and identifies trouble at the earliest.
One of the frequently underestimated aspects of servitization success is the human element. The success of servitization depends on an army of field agents ready to service the machinery. The younger generations (Gen Y and Gen Z), however, are not field service inspired. Managing field service through a tech-enabled service management software will enable seamless operations and inspire the tech-savvy youth to join the workforce.
54% of field service enterprises use dedicated field service management software to power their businesses. With the rise of servitization, FSM software becomes a vital cog in the very existence of a business.
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