There have been numerous articles, keynote presentations, and discussions about Servitization and/or Outcome-Based Services. While the concept of Servitization has been around for over a century, in manufacturing terms, the idea has really taken flight in the last 20 years. This has happened in conjunction with the explosion of digital capabilities and technological advances in communication and data transfer.
Where really impactful efforts at Servitization occur, technology lends itself to digitally-enabled Advanced Services. According to Professor Tim Baines, from Aston University,
“Advanced services are core to Servitization. Xerox’s ‘Managed Print Services’ is one example. Rather than simply selling equipment, the company offers ‘document solutions’ to customers.”
The distinction with advanced services is that the outcome is the ability for a customer to perform a business function or process. This is different from conventional services where the outcome is product ownership and maintenance of an asset’s condition.
The Transition to Outcome-Based Services
As someone who has spent a great deal of time managing print and document solutions globally, I was fortunate to see this transition in real time. The key to the transition from selling copiers and maintenance contracts to providing outcome-based document solutions was wholly dependent on the ability to remotely monitor and track the condition of the print assets.
The print industry adopted remote monitoring decades before most other industries. Back in the day, in order for copiers and printers to function correctly, they required dozens of sensors and switches to track the paper through the paper path. It was relatively easy to assign error codes to sensors and switches to inform the technician where the paper was stuck, when the fuser oil or toner was low, or when the fuser temperature was too high or low. Once it was possible to connect and communicate with these devices over telephone landlines, the sensors and associated error codes were already in place.
The key is to know the condition of the equipment at all times. By understanding the profile of a well-performing piece of equipment, service leaders can see when that performance begins to degrade and is about to fail. Over time, engineers can learn what the indications of device failure are in advance of the actual failure. The better they know the equipment, the further in advance they can “predict” the failure. Therefore, the intimate knowledge of asset data, service history, parts utilization, performance indicators, and the environment that the asset operates in are all crucial to understanding how it is currently performing and how and when it may fail in the future.
As equipment companies start to sell outcomes—conditioned air for HVAC providers, flight hours for aircraft engine manufacturers, electricity for the makers of solar power systems—they need to have a level of confidence in the current and future performance of the assets that deliver those outcomes. They need to know how their equipment is performing and be able to intervene with service before that service is required. They have to do as much as they can to eliminate unplanned or corrective maintenance.
SAP Digital Supply Chain Strategy Developer Dirk Ammermann noted, “Monitoring of equipment conditions combined with predictive models allows providers to reduce warranty cost and unplanned customer downtime while accelerating service response. Detailed insights into issues support service technicians to be better prepared and equipped with the right work instructions, tools, and parts. Manufacturers use additional information to refine their SLAs, create customer-specific service plans and offerings, and optimize spare parts and service technician planning.”
A New Tool for Monitoring Assets: Asset 360
This is where ServiceMax’s Asset 360 for Salesforce comes to the aid of organizations looking to make the transformation to outcome-based services. ServiceMax Asset 360 provides the system of record for all asset performance data. What differentiates Asset 360 from typical ERP systems is that Asset 360 records the Bill of Material (BOM) as received, and then, over the life of the asset, collects and saves all of the service history to create and maintain a BOM As Maintained.
Every work order, PM, and record of a part replacement is saved against the asset record. If that asset is connected and providing performance data from the field, Asset 360 will record and maintain that asset data for generating service calls for preventive maintenance (based on utilization, cycle counts, or other performance data), predictive maintenance (based on performance profiles), or corrective maintenance work orders when there is an outright asset failure.
Asset 360 will collect, maintain, and present that data based on the needs of the user. For example, the sales organization may need a different view of asset data than the engineering team, as does finance and customer success.
Companies are moving to outcome-based services as a way to develop closer relationships with their customers, become more strategic, have a far better ability to manage their own destiny, and fend off competition. In order to deliver this complex capability, they need to have intimate, timely, and accurate information about their assets in the field. Asset 360 for Salesforce delivers the asset-centric data and insights required to successfully make this transition and thrive in the world of outcome-based services.