Transforming SERVICE in the Digital Age
Catching the wave of seamless engagement and connected service in manufacturing.
It’s here. This is the time I’ve been waiting for since I was responsible for the Parts and Service business segment of a major global manufacturer. Like all of us who have managed what was once referred to as “The Aftermarket”, I found it sort of maddening that we devoted so little investment and attention to becoming excellent at keeping our customers’ expensive equipment serviceable and under our care as the original equipment manufacturer. Instead, we left too much to chance and opened the door for third-party parts and service providers, and at times even our own channel partners, to compete with us for this valuable segment of business. Why? There are a few key factors that needed to be addressed, and some of these needed a level of investment that was simply out of reach at the time. That’s what has changed over the past decade, and more rapidly in the past year or two.
This series is written for those of you who are focused on maximizing your SERVICE potential, starting now with a new generation of solutions that are both available and affordable.
The Voice of the Customer
First, as always it’s best to have direct insight into the real world. Many of the blogs, articles and ads for the new SERVICE economy are speaking about the early adopters and limited successes with the Internet of Things (IoT). It’s on the minds of every executive team as they plan strategies – but still very much in its infancy compared to the inevitable growth over the next decade. What I did recently is to speak directly with senior leaders in the industrial equipment sector about their current SERVICE capabilities and limitations; and more importantly, what they were planning and doing. These are all large-scale global manufacturers with significant leadership positions in customer markets and product technologies.
I was surprised to learn that not much had changed yet in the SERVICE segments of these businesses. What I found is a growing demand from these leaders for clear guidance and practical solutions that are within their organizational and financial reach. In general, the challenges remain in maintaining talent, maximizing the value of service teams, and connecting an array of business processes and systems to have a complete, efficient environment for service delivery. Of particular note, none of these leaders had yet developed a solid strategy and plan for the emerging IoT opportunities – but all acknowledged the importance of getting started and building economically viable responses.
The New Model for Integrated SERVICE
Similar to the digital commerce business transformations that started in the dotcom era, there is a technology driver that is reshaping SERVICE for the future. It will prove futile for companies to attempt to maximize the power of their service without upgrading their technology foundations. This will require a mix of new capabilities coupled with integration of the embedded enterprise applications. Fortunately this digital transformation can deliver a powerful ROI due to the untapped SERVICE revenue and margin that is only accessible through this new model.
As we look at a fully capable set of services, the basic needs fall into three major categories:
1. Customer Care and Support – The Digital Economy and The Age of the Customer are megatrends that have disoriented and reshaped what is needed to be Easy to Do Business With. This is where SERVICE meets the customer on multiple fronts. First of all, everyone who influences the demand for your products and services, shapes or controls access to your products and services, or directly purchases these is THE CUSTOMER. Care and Service have become a multi-faceted capability that requires a seamless set of ways to interact with all of these customers. Self-service that is backed up by responsive agents with efficient and intelligent responses have become essential. Making these affordable and accessible is a key to realizing this capability.
2. Technical/Field Service – This is the basic blocking and tackling of equipment installation, maintenance, upgrade, retirement and support with parts and service provided by knowledgeable experts. It’s an essential part of every manufacturers’ quality image and customer satisfaction profile. When optimized it keeps parts and service in the OEM’s control and maximizes the life cycle profitability, wallet share, and market share. Left to third-party providers it opens the door to eroding lifecycle margins and even to competitors within your customer base. Because it is a knowledge-based, technically centered part of your business it is an area where productivity, efficiency and effectiveness of service team members pays big dividends.
3. Connected Service – The IoT. It’s early stages for most manufacturers, but the future is clear. Once the device costs, connectivity, security/privacy, and organizational inertia are overcome, this is the next game-changer for most manufacturers. What is most important in these early days is to find practical entry points that fit your customer base and budget.