Connected Field Service: A Means to Increase Service Contract Renewals

The following is a guest blog from ServiceMax partner PTC. For more information, visit them in the ServiceMax Marketplace. 

Blumberg Advisory Group and Giuntini & Company recently conducted a study to determine which factors encourage businesses to renew service contracts and sign up for extended warranties.

The researchers discovered that companies offering extensive value-added services (preventative maintenance, inspections, etc.) generated higher contract renewals than organizations that only offered basic services such as corrective failure.

This finding should serve as a call to action. Only 50.4 percent of companies include preventive maintenance in their service contracts. So, going one step further and offering predictive maintenance would give your organization a considerable advantage in the marketplace.

In order to deliver predictive maintenance, you need to integrate connected field service into your operations. Connected field service is an operational model with connected products as its foundation (industrial equipment, medical devices, etc.). These assets send performance data to customer support personnel who then act on that information to prevent unplanned downtime.

An example of connected field service in practice

Suppose you work at a construction equipment manufacturer. As part of a new business strategy, the company integrates sensors into new product designs to collect data on asset performance.

One of your most valuable customers, a multimillion-dollar site development contractor in North Carolina, purchases a connected excavator and agrees to a four-year service contract with your company.

A year later, the contractor uses one of your connected excavators on a $300 million commercial construction project. The site developer agrees to a lump sum agreement that stipulates the contractor will be liable for any cost overruns associated with the work for which it is responsible.

Four weeks into the project, a sensor registers abnormal vibration on the excavator’s final drive. The gearbox is also overheating. The sensor sends this information to a data analysis program, which concludes there’s a problem with the main bearing, which will fail in approximately five days, and in the middle of the work week.

The data analysis program notifies a customer support center of the issue, and a representative takes the following actions:

  • Finds a technician who has either worked on the excavator in question, or serviced similar models.
  • Confirms whether the installed main bearing was superseded by an updated part.
  • Locates the part that needs to be replaced.
  • Schedules a time for the chosen technician to replace the bearing outside of working hours.
  • Notifies the customer of what’s about to break and when the main bearing will be replaced.

As a result of this coordination, much of which is automated, your company not only prevents a failure from happening but also ensures the site developer does not have to suspend operations to accommodate the technician.

If your organization had not been able to predict when the failure would occur, the excavator would have failed, and the site developer would have incurred the costs of unplanned downtime. You saved the company money, and the site developer will remember that when it comes to renew your service contract.

While the aforementioned situation is just an example to illustrate the possibilities of connected service, one real-world example is Elekta, a medical device manufacturer that uses connected field service to support predictive maintenance. The company services equipment in more than 6,000 medical facilities across the world, and has also developed a process to service those assets remotely. Today, they can solve about 20 percent of service issues without physically dispatching technicians.

ABOUT Alex Dorian

With over three years of experience writing for tech companies, Alex Dorian ideates, manages, produces and measures the success of PTC’s Service blog content. Curious as to how software works, he frequently consults industry experts and researches spare parts logistics practices to discover how new technologies will impact the aftermarket sector.