Research Report: IoT, Servitization and Field Service (part four)

Nov 06, 2016 • Features • research • Research • IoT • servicemax • Servitization

In 2015 Field Service News and leading FSM software provider ServiceMax teamed up on a research project to assess the appetite for IoT as a tool for improving field service delivery.

One year on we followed up with a fresh research project into the area to see what trends have emerged and now in a four part series we bring you the findings of this latest research. In part One of this series we explored the headline findings of this year’s research against the context of the previous year’s results.

In part two we dug deeper into the study to explore what additional technologies are sitting amongst companies either planning to, or actively using IoT as a tool for field service delivery as well as what the cultural impacts of implementing IoT are and whether these are being considered by organisations.

In part three of this exclusive series we looked at the impact of servitization as a key driver for the adoption of IoT.

Now in the final part of this series we look at best practice for IoT implementation and some concluding thoughts on the research findings as well as hearing expert views on this research from Athani Krishna, Co-founder and Chief Strategy Officer and Dave Hart, Senior Vice President, Customer Success, ServiceMax...

Click here to download the full, exclusive research report now...

Best practice for IoT implementation:

Finally, let’s look at what we can learn from the group of respondents who have either actually already undertaken an implementation of an IoT solution as part of their field service management operations, or were currently actively in the process of doing so.

We asked respondents in this group to identify which steps they would take and in what order to make an IoT implementation as simple as possible whilst avoiding any common pitfalls.

The general consensus led to the following best practice steps:

Research the concept - including attending trade-shows, reading relevant trade journals such as field service news etc
Developing a business plan for how your service division will operate once IoT is implemented
Identify relevant providers
Seek professional advice (from either solution providers or consultants)
Gain backing for the project from the executive board
Select a solution provider
Establish new business processes and role these out internally
Connect assets in the field

What is particularly interesting about this set of findings is that the collected wisdom of those who have either gone through or are currently going through the implementation process is that there is a lot of work devising strategy and a sensible roadmap ahead of actually connecting assets out in the field.

Conclusions:

For those companies still not considering IoT there are some clear warnings here.

The general consensus is that those companies that fail to adopt IoT and adapt to a more proactive means of working are at risk of falling behind.

Indeed, even procrastination could be a risky game to play when we consider that there is a long suggested process in terms of best-practice implementations of which connecting assets (which could in itself be a considerable task depending on the size of your install base) sits right at the end of the road map.

78% of field service professionals believe there will be significant competitive gains for those companies who become early adopters of IoT as a field service tool

And with 78% of field service professionals believing there will be significant competitive gains for those companies who become early adopters of IoT as a field service tool, with increased efficiency, customer satisfaction and profits being the three most anticipated benefits (each are expected by over 75% of respondents with 98% of respondents expecting increased efficiency) the rewards certainly appear to be widely accepted as both tangible and genuine.

IoT seems like a clear destination for field service operations. It seems it is now just a matter of who can get there first.

Expert View: Athani Krishna, Co-founder and Chief Strategy Officer, ServiceMax

The Internet of Things as a concept is nothing new. I’d wager most people have been familiar with the novel applications of IoT since Cisco started championing the “Internet of Everything” ads several years ago. Nowadays, IoT is infusing itself into just about anything, from oil rigs and proton therapy machines to municipal trash cans and elevators.

But novelties aside, we’ve had a front-row seat to where IoT is truly proving its value – field service. And in this survey gauging the IoT appetite among largely UK-based manufacturing leaders, we’re seeing clear hunger.

It makes perfect sense – in a world where manufacturers face stagnant product-centric margins and pressures to grow their businesses, service is the natural next place to look. But we’re not talking about selling mere warranties and service plans – the stuff of yesterday. We’re talking about investing in IoT to remotely diagnose machine issues, guarantee uptimes and move to an outcomes-based selling model. That gives manufacturers more predictability in revenues and customers predictability in uptime of equipment.

“In a world where manufacturers face stagnant product-centric margins and pressures to grow their businesses, service is the natural next place to look...”

This isn’t a future dream. Our customers such as Elekta, McKinley Equipment and Medivators have all demonstrated real business results using our Connected Field Service solution to unlock new revenue streams and improve customer satisfaction. These companies are moving their service operations from a reactive scenario, where technicians are dispatched once a customer calls, to one where the customer never even needs to call.

But what’s interesting is that while connectivity is the greatest benefit, it’s also one of the greatest hurdles. For companies, opening up systems for a connection to equipment vendors can pose security challenges. Networking & IoT technology companies understand these hurdles very well, and are working to make security better everyday. For this new reality of outcome-based services model to proliferate, companies need to understand that this is all a partnership.

As technology gets better, and early adopters embrace this new business model, I do expect this increasingly become industry standard – companies won’t see customers & vendors anymore; they will only see partners.

Expert View: Dave Hart, Senior Vice President, Customer Success, ServiceMax

Moving from a product-focused business to a service-centric operation can unlock growth potential like never before. But getting there indeed requires a cultural shift.

Just about half of those surveyed here admit that servitization - that is, delivering a service component as an added value when providing products – will have a disruptive influence on company culture. Now, understand there’s a spectrum when evolving service. Sometimes it’s limited to selling more warranties and contracts; that’s less what we’re talking about. What we’re talking about is leveraging IoT to get to an outcomes-based service model; indeed many of our customers have taken this approach or are starting to do. That’s where things get more complex.

From where I stand, having spent nearly three decades as both a field service technician as well as a service leader, the cultural impacts of infusing IoT are real and they are significant – and it’s likely, according to this survey, the impact will be greater than expected.

“Having spent nearly three decades as both a field service technician as well as a service leader, the cultural impacts of infusing IoT are real and they are significant...”

Think about it: an outcomes-based service model affects the finance team in the sense they need to plan for recurring revenue streams versus the days of on-premises software sold as a hard good once. Marketing and sales teams need to shift their focus from pitching product to selling the idea of service. Field service engineers themselves now can work with R&D teams more intimately to share specs on how products are performing – or not – in the field. And with IoT-laced infrastructures, it obviously has huge implications for IT departments as well.

All of this means the C-suite must be intimately involved in an outcomes-based approach. Migrating to this business model equates to effectively turning the organisation on its head, and that is a very difficult exercise that needs a holistic approach from the top.

Our customer IBA, which manufacturers proton therapy machines for cancer treatments, has noted it doesn’t necessarily expect its field engineers to become R&D professionals but that it envisions a reality where on-site technicians efficiently share product performance knowledge with those teams. That will require a shift in thinking and process.

At the end of the day, too, managers, directors and VP’s need to consult those actually performing the services – the field technicians. Thankfully, 80 percent of those surveyed said they are already consulting with their service engineers with regards to this transition. That’s a good first step.

Servitization is not necessarily and easy plug-and-play journey. Change is hard, but taking the right steps to align prior to implementation will save hurt down the road.