The field service industry is constantly evolving. It has to. Because as the needs of their customers change, field service organizations must also change to meet those needs quickly and efficiently. Indeed, the top companies in field service are constantly innovating to serve their customers better.
How do they do that? They don’t trail the field service trends. They monitor them as they emerge, then make effective innovations to take advantage of them. Here are four field service trends your company should expect and leverage in 2023.
1. OpEx spending will take precedence over CapEx
Supply chain issues and the price of materials will continue to grow in 2023. This will drive delays in the execution of capital projects and put pressure on organizations to keep their existing equipment up and running. In 2023, traditional CapEx players with cost-intensive, mission-critical assets will look increasingly to OpEx spending to ensure that those assets are well maintained and optimized. This will help them sustain profitability and ride out supply chain problems.
It will also enable CapEx players to limit their borrowing and avoid high-interest rates. The last thing they want is to have cash-flow issues if the economic landscape further deteriorates. The reality is that rising interest rates are impacting the liquidity of lenders, making them more selective about the capital-intensive projects they’re willing to finance. Many of the Capex-intensive companies also fund their own investments. So instead of investing in capital equipment, they have greater levels of liquidity to work with and will be able to return more cash to shareholders. Heading into 2023, asset-intensive companies will increasingly leverage Opex spending as a means of delivering asset-centric outcomes, while freeing up cash to drive strategic objectives.
2. The rental model will expand
The age-old question of renting versus buying will take center stage in 2023. We’ll see more traditional equipment vendors get into the business of renting or leasing their assets. Industrial customers are pushing for this model because, in the current economic environment, they’re reluctant to commit to a long-term investment cycle. This could also lead to the rise of third-party companies, similar to car rental agencies, that buy capital-intensive assets from the OEMs, then rent or lease them out to end users.
But this business model comes with its own set of challenges: If you’re leasing or renting out your assets, you need to know where they are, when they’re coming back, what condition they’re in and what’s the turnaround time before you can get them into the field again. To address these questions, firms specializing in equipment rentals are increasingly turning to enterprise asset-management solutions to gain full visibility into the lifecycle of their assets and help them ensure the maximum efficiency of those assets.
3. Digital transformation will be increasingly intentional
In 2023, disruption caused by continued global upheaval and new competitive entrants will continue to impact every sector. Speed and agility in decision-making, enabled by good data, will determine who the winners and losers are. Companies are increasingly recognizing that it’s not enough to transform digitally to sustain continued growth, but the transformation must be “intentional”. Intentional transformation means taking a purpose-driven approach that shuns “one size fits all” technology and instead embraces “best of breed” solutions that drive value through operational excellence, agility and best-in-class process enablement.
Also critical to intentional digital transformation is the human aspect. In an environment of workforce shortages, employers are putting more thought into the change management aspects of digital transformation to ensure that digital technology enhances the work experience for their employees so they can do their job in the most effective and hassle-free way.
4. The Energy Transition Will Help The circular economy take off
Many companies continue to struggle when it comes to meeting their targets for carbon neutrality. They’re looking at every possible initiative to help them meet their climate goals and reduce their carbon footprint. That’s why the circular economy will finally start to take hold in 2023.
The circular economy is a framework that tackles global challenges like climate change and pollution through the reuse, remanufacturing, and recycling of materials and equipment. For example, oil and gas companies are using the same technology they have developed to explore and produce wells to leverage depleted wells for carbon recapture purposes.
In 2023, companies will explore innovative ways to participate in the circular economy and even use it to drive new revenue streams. Companies that participate in the circular economy will also have a competitive edge in attracting and retaining talent. The younger generation of workers want “jobs with a greater purpose”, and they are more likely to be attracted to organizations that make a positive contribution to a sustainable future.
Final takeaway: field service trends
In 2023, disruption caused by ongoing economic upheaval, supply chain constraints, and new competitive entrants will continue to impact every industry. The field service sector is no exception. Speed and agility in decision-making, as well as the ability to gain full visibility into the lifecycle of an asset, will determine who the winners and losers are. Companies that are able to control their costs and guarantee the best outcome for their customers are the ones who will remain relevant and vibrant in the year ahead.