If you are a service professional working for a manufacturer of equipment, machines or components that require service, you (or your management) may have asked:
“How can my business leverage the Internet of Things to drive more revenue?”
This was the central question discussed during a roundtable session held recently outside Austin, Texas at Field Service Connect, sponsored by WBR Events. The group that joined me for this conversation represented a variety of reputable companies, including Honeywell Aerospace, Ingersoll-Rand, Hill-Rom, Cymer, Lenovo, Perkin Elmer and a few others. Following introductions, I kicked off the conversation with a hypothesis that the Internet of Things (IoT) has the potential to deliver business benefits and drive revenue for both the manufacturer/service provider as well as the end customer. Going into the discussion, I was thinking that it’s a no-brainer to consider IoT as a major driver of business results and revenue for both users and sellers of equipment. I even created this little table to capture the key points associated with my hypothesis.
The Benefits of IoT in Field Service
|What’s in it for the Service Provider?||What’s in it for the End Customer?|
As we went around the table, there was a mix of responses from attendees on where their companies are in the adoption of IoT and its role in driving service revenue for their organizations. Some companies already manufacture their products with embedded sensors that send mounds of useful data back to the manufacturer. Others were earlier in the adoption cycle and still trying to understand how they might retrofit installed equipment with Internet sensing devices. Some were wondering how their service operations would change if they were able to capture real-time measurements.
Notably, round-table participants representing companies in the aerospace and medical device industries acknowledged that they are already using sensor data on their products. The data collected by these companies is used primarily by their manufacturing departments to better understand product performance characteristics. That data is then shared with the service teams to trigger replacement of parts or service when components may be reaching the end of their productive life. Customers of this high-value, high-margin, mission-critical equipment are willing to pay for this level of service.
On the flip side, the group ventured to discuss the situation with lower value, lower margin products. For these manufacturers, there is real value in connecting products to enable predictive service, but the impact on profitability may make this level of service impossible to justify. First, the product margins are such that replacing a component or machine that “may” fail will increase the cost of delivering service. Second, the users of lower value, less mission-critical products may not be willing to pay a premium for a higher level of predictive service.
The conclusion our Field Service Connect discussion group came to was that there is clear value and opportunity to drive additional revenue and customer satisfaction by tapping into the Internet of Things for connected field service. The caveat is that the higher cost associated with IoT deployment is often better suited for higher margin, higher value products operating in a more mission-critical environment.
I want to thank the folks that joined the important discussion at Field Service Connect. Now, I’d love to hear what you think. How can your company transform your service offerings and service revenues with a connected field service strategy?