After following TSIA’s research, analysts, and publications for a long time, I finally had the opportunity to attend and speak alongside my colleague Sam Neva at their annual Envision conference a few weeks ago. We also recorded a session that is available at the virtual version of their conference starting November 7, which you can access here.
I appreciate TSIA’s research lean on highlighting the move to Everything-as-a-Service (XaaS), a theme that is relevant and timely even for the most industrial companies. Peppered into the keynotes around digital transformation and as-a-service topics, there were also wonderful breakouts on field service and supply chain topics from the likes of Dell, HPE, IBM, and more. For those customers and interested parties listening in, I would recommend TSIA’s research and content as it presents a perspective not typically seen at traditional field service conferences.
There were way too many sessions to attend and even consume online, but I did manage to snag a seat in some of the keynotes. Here were the primary takeaways.
Economic Reality and Margins
TSIA predicts that organizations are going to be extremely margin-focused to weather the current period of economic uncertainty and will spend an increasing amount of scrutiny on the placement and effectiveness of their sales and marketing resources. This doesn’t mean that significant investment cutbacks are guaranteed, but more so that organizations are going to be very analytical in how they invest and place their sales and marketing resources.
To support this, TSIA is augmenting their already popular LAER (Land, Adopt, Expand, Renew) framework for customer and business growth with Analyze and Place to form APLAER. Analyze refers to the review and tracking of critical data to determine the cost and effectiveness of investments while Place refers to the utilization of the right resource for the sales or customer growth motion. We see this greater scrutiny being applied by service leaders when it comes to monitoring their service and installed base revenue opportunities. Margin analysis at the customer, asset, and contract level is becoming extremely vital for service leaders as they determine which customers and contracts require the attention of their sales and customer success resources.
Digital Hesitation
Earlier this year, the TSIA research team published a book on ‘Digital Hesitation’ that highlighted the common struggles of Business-to-Business companies in achieving the promise of their digital transformations. For one, those that have been unsuccessful have approached their transformations in a siloed nature with a very limited view of digital customer experience and customer outcomes. These organizations have also lacked the rigor of end-to-end data across the customer experience to make the best use of their internal resources. The book is an interesting read and summarizes that companies at the forefront of their digital transformations have a focus on four capabilities:
- Low-friction land and product-led growth – Making it easier for customers to get started
- Transform data into insights – Data is widely available via telemetry and mind to determine product usage and consumption gaps
- A fully digital Customer Experience (DC) – The ability for customers to engage with their suppliers across the lifecycle
- Clear links between Product and Service Capabilities and Business Outcomes – Having data to clearly articulate the value and impact of their offers (product + service + services)
While we didn’t use the exact term ‘Digital Hesitation’, we observed a very similar phenomenon in the research conducted with Harvard Business Review Analytics Services earlier this year. Organizations are pausing their siloed digital initiatives and looking for a common thread to build and deliver business outcomes.
The Pathway to As-a-Service
While hesitation is real, organizations across the TSIA research base (both high-tech and industrial) are making progress toward the as-a-service future. By all estimates, only 1 in 5 or even less have made a significant transformation in the business models, but the path to accomplishing this is clearer than before. The likes of TSIA and Bain & Company have wonderful frameworks to guide organizations considering their pathway to Equipment-as-a-Service or Product-as-a-Service models and they typically start with establishing a better line of sight into your assets and installed base. Once that is done, organizations have the foundations of an asset-centric thread that can then begin to deliver the commercial and business insight necessary to accelerate the transformation. We strongly believe in the value and power of asset centricity and shared our vision of how an asset-centric framework can help manufacturers move towards as-a-service futures.
If interested in listening to our session at Envision Virtual, please visit TSIA’s event page. Our research on asset centricity can also be found here. As always, I’d be glad to walk anyone interested through our presentation or our point of view on XaaS.
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