Momentum IoT was named the winner at the 2019 CompassIntel Spring Awards in the category of Connected Solution Leadership: Fleet Tracking Management for IoT and M2M.
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Jul 12, 2019 • Fleet Technology • News • Momentum • fleet • IoT
Momentum IoT was named the winner at the 2019 CompassIntel Spring Awards in the category of Connected Solution Leadership: Fleet Tracking Management for IoT and M2M.
The awards are voted on by over 40 industry-leading press, editors, journalists, thought leaders and analysts who identify the best in three primary categories: Mobile & Wireless, IoT (Internet of Things), and Emerging Tech, along with CompassIntel.com selected “of the Year” awards.
“We’re excited to recognize the innovation that Momentum IoT has introduced to connecting assets with ease and simplicity,” says Stephanie Atkinson, CEO and Founder of Compass Intelligence. “Momentum IoT has made fleet tracking affordable and achievable for small to medium sized businesses.”
Momentum IoT disrupted the fleet tracking model by utilizing a SaaS payment model, so there are no contracts or upfront fees to use the platform. The tracker is cloud-based and does not require customization, so users can plug the device into their asset and view them on one screen. Additionally, the company also offers a free trial of its products.
“We’re honored to receive this award,” says Justin Silva, CEO of Momentum IoT. “We’ve set ourselves apart through the ease of use and ruggedness of our design coupled with providing the highest level of security available with no contracts. We want to make telematics accessible to everyone and will continue to be a solutions-based leader in our field.”
Jul 04, 2019 • Future Technology • News • future of field service • manufacturing • cloud • IoT
Manufacturers will more than double Multicloud use in the next two years, a new report predicts.
Manufacturers will more than double Multicloud use in the next two years, a new report predicts.
Nutanix has announced the findings of its Enterprise Cloud Index results report for the manufacturing sector, measuring manufacturing companies’ plans for adopting private, public and hybrid clouds.
The report revealed that the manufacturing industry’s hybrid cloud usage and plans outpace the global average across industries. The deployment of hybrid clouds in manufacturing and production companies has currently reached 19% penetration, slightly ahead of the global average. Moreover, manufacturers plan to more than double their hybrid cloud deployments to 45% penetration in two years; outpacing the global average by 4 percent.
The manufacturing industry is at an “innovation impasse,” 1 meaning manufacturers have a desire to innovate and drive transformation, but legacy IT systems have the potential to constrain their ability to do so. The opportunity for manufacturers to embrace digitization efforts including “Industry 4.0” initiatives can break the impasse, but executives must focus on new opportunities to create value and not only prioritize traditional business operations. Manufacturing organizations face the constant challenge of trade-offs: they are under pressure to meet current productivity and operational goals in an increasingly global and highly competitive marketplace, but they also need to invest in future growth.
This challenge has created a demand for new technology solutions that can help balance the trade-off between current and future goals. IT leaders in manufacturing must avoid the beaten path of finding short-term fixes for increasing revenue; instead, they should look to long-term solutions that enable automation, enhanced use of data and improvements in customer experience. The Enterprise Cloud Index findings indicate that manufacturing leaders are aggressively adopting new technology to embrace modernization instead of getting left behind with legacy systems. The distributed cloud model offers a solution that delivers speed, flexibility, and localization, allowing manufacturers to improve efficiency without compromising quality.
While 91% of survey respondents reported hybrid cloud as the ideal IT model, today’s global average hybrid cloud penetration level is at 18.5% — the disparity due in part to challenges of transitioning to the hybrid cloud model. Manufacturing industries reported barriers to adopting hybrid cloud that mirrored global roadblocks, including limitations in application mobility, data security/compliance, performance, management and a shortage of IT talent. Compared to other industries, manufacturers reported greater IT talent deficits in AI/ML, hybrid cloud, blockchain, and edge computing/IoT.
Other key findings of the report include:
- 43% of manufacturers surveyed are currently using a traditional data center as their primary IT infrastructure, slightly outpacing the global average of 41%;
- However, manufacturers currently use a single public cloud service more often than any other industry. 20% of manufacturing companies reported using a single cloud service, compared to the global average of 12% — a testament to the fact that manufacturers are starting to turn to the cloud as a solution, given that they deal with legacy IT systems and cannot handle workloads on-prem;
- Manufacturers are also advancing the movement to private cloud: 56% of manufacturers surveyed said that they run enterprise applications in a private cloud, outpacing the global average by 7%;
- Manufacturers are struggling to control cloud spend. One motivation for deploying hybrid clouds is enterprises’ need to gain control over their IT spend. Organizations that use public cloud spend 26% of their annual IT budget on public cloud, with this percentage predicted to increase to 35% in two years’ time. Most notable, however, is that more than a third (36%) of organizations using public clouds said their spending has exceeded their budgets;
- Manufacturers chose security and compliance slightly more often than companies in other industries as the top factor in deciding where to run workloads: while 31% of respondents across all industries and geographies named security and compliance as the number one decision criterion, 34% of manufacturing organizations chose security and compliance as the top factor.
The bullish outlook for hybrid cloud adoption globally and across industries is reflective of an IT landscape growing increasingly automated and flexible enough that enterprises have the choice to buy, build, or rent their IT infrastructure resources based on fast transforming application requirements.
“Manufacturers are investing in modernizing their IT stack, and adopting industry 4.0 solutions to keep up with ever-changing business demands in areas like production and supply chain management,” said Chris Kozup, SVP of Global Marketing at Nutanix. “A hybrid cloud infrastructure gives manufacturers a fresh approach to modernizing legacy applications and services, enabling manufacturing IT leaders to focus on their long-term investments in big data, IoT, and next-generation enterprise applications. While the manufacturing industry is still facing obstacles in transitioning to multi-cloud use, this study shows us that manufacturing organizations are ready to accelerate growth and take the lead in IT innovation in the future.”
To create this report, Nutanix commissioned Vanson Bourne to survey more than 2,300 IT decision makers, including 337 worldwide manufacturing and production organizations, about where they are running their business applications today, where they plan to run them in the future, what their cloud challenges are and how their cloud initiatives stack up against other IT projects and priorities. The survey included respondents from multiple industries, business sizes and geographies in the Americas; Europe, the Middle East, Africa (EMEA); and Asia-Pacific and Japan (APJ) regions.
1 IDC FutureScape: Worldwide Operations Technology 2018 Predictions, doc #US42126317, October 2017
Jul 03, 2019 • News • future of field service • research report • Berg Insight • IoT • cellular
Growth was driven by exceptional adoption in China, which accounted for 63 percent of the global installed base. By 2023, Berg Insight's research now projects that there will be 9.0 billion IoT devices connected to cellular networks worldwide.
“China is deploying cellular IoT technology at a monumental scale”, said Tobias Ryberg, Principal Analyst and author of the report. “According to data from the Chinese mobile operators, the installed base in the country grew by 124 percent year-on-year to reach 767 million at the end of 2018. The country has now surpassed Europe and North America in terms of penetration rate with 54.7 IoT connections per 100 inhabitants.”
The Chinese government is actively driving adoption as a tool for achieving domestic and economic policy goals, at the same time as the private sector implements IoT technology to improve efficiency and drive innovation. Berg Insight believes that the role of the government is the main explanation for why China is ahead of the rest of the world in the adoption of IoT. Like other advanced economies, the country has widespread adoption of connected cars, fleet management, smart metering, asset monitoring and other traditional applications for cellular IoT. It has also given rise to new consumer services enabled by connectivity like bike sharing. The most distinctive characteristic of the Chinese IoT market is however the way that the government is systematically using new technology to implement its vision for urban life in the 21st century.
In the report, Berg Insight also analyses the IoT business KPIs released by mobile operators in different parts of the world and found significant regional differences. The monthly ARPU for cellular IoT connectivity services in China was only € 0.22, compared to € 0.70 in Europe. Global revenues from cellular IoT connectivity services increased by 19 percent in 2018 to reach € 6.7 billion. The ten largest players had a combined revenue share of around 80 percent.
Jul 03, 2019 • Features • future of field service • IoT
The Internet of Things (IoT), another buzz world (and acronym!) is a crucial element of Industry 4.0, or the fourth industrial revolution as it’s also called; the use of data automation and data exchange in modern manufacturing. Loosely described, IoT is everything that is connected to the internet.
However, it’s the increasing ability of devices such as laptops, phone, watches, cars and fridges to “talk” to each other that is coming to define what it actually is. But how does it work? The blood of this digital eco-system is data, and its oxygen is automation. When combined, information is gathered, analysed and acted on producing an outcome. We’ve all probably got an Alexa-type smart device blinking in the corner of our living room or kitchen, our TV knows when to record Game of Thrones and our thermostat remembers when we’re coming home from work so the living room is nice and toasty but as much as your fridge sending you a text to tell you you’re out of milk is handy, it’s in the realm of service that IoT can really make an impact.
On the surface, its potential is enormous. I often write about the asset becoming more important than the engineer and enjoy the debate that comes from such a statement. Yet, with machine learning, AI and in particular IoT it’s looking more and more likely that eventually, at some point, the role of the human in service could go all together. The smart asset – a wind turbine, for example – could flag-up a fault through a sensor, communicate with another turbine about the failure, who could respond with a solution, without the need for an on-site engineer.
This, example, I admit is rather woolly, but you get the idea; the potential is huge and in the industrial sector its impact is starting to be felt. Research conducted by PwC on US manufacturers’ attitudes towards digitization revealed 70% of those surveyed predict to be at a stage of digital advancement by 2020, compared with 33% currently. Furthermore, those firms are investing $907 billion annually on greater connectivity and smart factories suggesting, firms are realising the financial benefits of such technology. However, with all disruptions there comes challenges.
"On the surface, its potential is enormous..."
A report from Gartner in 2014, around the time the IoT enthusiasm was building, checked the momentum slightly by highlighting issues around security and consumer privacy. Given the vast amount of data being shared by the possibility of a breach could have severe consequences. On the flip-side data collected on consumers and their behaviour is another area for concern. And while data collection can enhance a company’s ability to provide better services, any sort of mis-hap can in-turn, be just as damaging to firm’s image and the market in general.
Furthermore, as the number of connected devices increase real-time processses could be affected as storage and security requirements widen Five years on, where are we with IoT governance? Gartner’s 2018 report Top Strategic IoT Trends and Technologies Through 2023 suggested that some sort of protocol was essential. “As the IoT continues to expand,” the report’s summary read, “the need for a governance framework that ensures appropriate behaviour in the creation, storage, use and deletion of information related to IoT projects will become increasingly important.
Governance ranges from simple technical tasks such as device audits and firmware updates to more complex issues such as the control of devices and the usage of the information they generate. CIOs must take on the role of educating their organizations on governance issues and in some cases invest in staff and technologies to tackle governance.” There’s no doubting the potential of IoT. As mentioned, it can truly change the way service is delivered.
However, citing the statistic in the standfirst of this article, 75 billion devices are projected to be connected by 2025 and with that, the potential for. It’s the role of all firms, from the top-down to ensure they’re ring-fenced accordingly.
* https://www.statista.com/statistics/471264/iot-number-of-connected-devices-worldwide/
Jun 25, 2019 • News • 5G • future of field service • Berg Insight • IoT
Berg Insight estimates that global cellular IoT module shipments increased by 16 percent in 2018 to a new record level of 221 million.
Berg Insight estimates that global cellular IoT module shipments increased by 16 percent in 2018 to a new record level of 221 million.
Annual revenues grew faster at 24 percent, reversing the previous trend of decreasing average module prices. The 3GPP standards for LTE – Cat M and NB-IoT – will contribute substantially to growth in the next coming five years.
These new standards are designed to be less complex to limit power consumption and are priced more favourably to address the mass market and make it viable to connect entirely new applications. In the first half of 2019, several vendors announced 5G NR modules that will become available to developers in the second half of the year. Early adopters will include companies active in the PC, networking and OEM automotive segments.
The results of Berg Insight’s latest cellular IoT module vendor market share assessment show that the four largest module vendors have 61 percent of the market in terms of revenues. “Annual module revenues for the four largest market players Sierra Wireless, Sunsea AIoT, Gemalto and Telit increased by 13 percent to US$ 1.85 billion, with the total market value reaching approximately US$ 3.0 billion”, says Fredrik Stalbrand, Senior Analyst at Sweden-based IoT analyst firm Berg Insight. Sierra Wireless leads IoT module revenues, followed by Sunsea AIoT and Gemalto. Sunsea AIoT leads in shipments and Quectel is number two in terms of volumes and in fifth place in terms of revenues. Fibocom reported the highest growth of 122 percent during the year, reaching US$ 189 million in cellular module sales.
The year marks the first in which a China-based vendor ranks as high as the second largest cellular IoT module vendor by revenue and six of the top ten vendors were from China in 2018. Sunsea AIoT emerged as a new major industry player in 2017 through the acquisitions of Longsung and SIMCom, which had been the market leader by volume for three consecutive years. While there has been some consolidation among the larger suppliers, the long tail of companies with activities in the cellular IoT module market is growing. A number of new players have been attracted to the market, particularly in the emerging NB-IoT and LTE-M segment. Notable examples include the major Bluetooth LE SoC vendor Nordic Semiconductor and the Japanese electronics company Murata.
Jun 19, 2019 • News • future of field service • IoT • Narrow band
According to a new research report from IoT analyst firm Berg Insight, global shipments of NB-IoT devices reached 53 million units in 2018.
Annual shipments are expected to almost triple in 2019 reaching 142 million units. Commercial deployments are essentially confined to China, where the semiconductor companies HiSilicon and MediaTek account for a large part of the NB-IoT modem volume.
“NB-IoT device shipments will ramp up quickly on the European and North American market in the next 18 months”, says Fredrik Stalbrand, Senior Analyst, Berg Insight. “While early deployments have so far been focused on traditional verticals such as smart metering, we expect to see NB-IoT being integrated into a broader set of products in 2019–2020, including home appliances, door locks and smoke detectors”. Combining low power consumption and the inherent security of cellular connectivity, the NB-IoT standard provides multiple benefits to the connected home and building segment.
The transition from 2G to 4G is a global trend, accelerated by NB-IoT. The major North American carriers were late adopters of the technology but are now adding or trialling NB-IoT in their networks as a complement to LTE-M. T-Mobile was the first to launch an NB-IoT service in 2018 and was followed by Verizon and AT&T in the first half of 2019.
In Europe, the leading mobile operators are making good progress towards ubiquitous NB-IoT coverage. Vodafone has been among the leaders in the development of NB-IoT and will roll out commercial services across all its networks until 2020. At the end of 2018, the operator had live NB-IoT services in eleven countries, including Germany, Italy, UK, Spain and the Netherlands. Deutsche Telekom launched in Germany and the Netherlands in mid-2017 and offered coverage in five additional countries at the end of 2018. Telefónica has launched its first NB-IoT networks in Spain and Germany.
Other mobile operators offering NB-IoT in the region include Orange in Belgium, TIM in Italy, MTS in Russia, Telia and Telenor in the Nordics, along with a number of national mobile operators. Australia, Singapore, South Africa, South Korea, Japan, Indonesia, Brazil, Turkey and the UAE are other examples of countries where network services are available.
Jun 17, 2019 • Features • Management • future of field service • IoT
I’ve written and spoken about the importance of IoT in field service for many years now. In the past I’ve often compared it to the
mobile revolution, outlining my case for why I think IoT will ultimately have a far bigger impact in our sector than mobile. Now this is not to underplay the importance of mobile in field service.
Mobile was undoubtedly a huge leap forwards in terms of how field service companies were able to deliver efficient field service maintenance. The streamlining of workflows that mobile allowed has seen field service companies be able to do more with the same or even less field service technicians than they could have even imagined possible in the days of triplicate paper documentation and the mighty pen.
Equally, the introduction of increasingly intelligent mobile applications has given field service engineers greater insight into each job they undertake, better support options for when they face an unusual fix and the easy processing of job completion and on site customer feedback.
All of which have seen field service companies become able to truly leverage the often untapped potential of the field service technician as a genuine, trusted, brand ambassador. In many respects the introduction of mobile was a true revolution. That is until we compare it to the potential of IoT.
In this context, actually what mobile brought to the table was the ability to do the things that we always knew were important in terms of service efficiency and customer satisfaction, better. We didn’t revolutionise our fundamental approach to field service when we introduced mobile into the mix.
We just did things exponentially more efficiently. However, whilst the advent of IoT will bring even more efficiency gains, as our engineers become forearmed with the knowledge of exactly which parameters of the asset they are about to work upon are falling outside of acceptable norms, there is the opportunity for a much more radical shift in thinking that IoT presents in addition to this. This is of course, the shift away from traditional break-fix, service level agreement-based service contracts and into the brave new world of guarantees of uptime, truly predictive maintenance and advanced services. This is the true revolution.
However, IoT alone is not enough for us to harness the disruptive force of such a revolution. Much like Cloud before it, it is perhaps the foundational technology upon which we can build even greater innovations.
Machine Learning Is Crucial For Iot Success
One of the throw away phrases that you will invariably hear at conferences, read in articles and discuss in board rooms in pretty much any industry vertical right now ,is that ‘data is the new oil or gold’. I politely disagree with that assertion. Data, as an entity in it’s own right, is quite frankly almost worthless. It has no use-value.
It is without agency and it is without utility. Insight that can be found from mining such data however, is something of truly massive value. When people comment that data is the new currency, they are generally referring to insight. This is why the data scientist was widely posited to become the ‘rock star’ of the twentieth first century not too long ago.
The ability to not only know how to surface insight from data, but more importantly understand exactly which direction your interrogation of that data should go to discover insights that yields true competitive advantage , is a fairly uncommon skill set that blends the analytical and the creative thought processes into one holistic discipline. Yet, as machine learning matures, I see a world where the role of the data scientist will be much more of an initial consultant, someone to make sure a business understands the methodology of data science.
Someone who outlines to them, the whys and the hows, basically lining up the ducks into a row, before setting the AI to do it’s thing. The technology is improving so rapidly now that the actual implementation of such data interrogation programs is likely to sit with senior business execs, rather than senior IT execs driving it.
The value of the human input will not be within the data analysis itself, but in guiding what areas of the business performance should be being measured. The reality is that the sheer volume of data and the speed at which it is generated means that truly utilising and embracing IoT means simultaneously adopting a machine learning strategy at the same time.
Augmenting Augmented Reality
Another technology I have championed for some time now is Augmented Reality (AR) which offers up in the short term at least, a very realistic solution to both the ageing workforce crisis and also the need for field service organisations to reduce the time and costs of training new field service engineers and get them being productive parts of the field workforce as swiftly as possible.
For a long time I have posited the benefits of being able to hold onto the tribal knowledge of an older engineer by allowing them a more convenient support role where their experience can be ‘dialled into’ by the less experienced, newly qualified engineers. This ability to provide ‘see-what-I-see’ over the shoulder remote support is an obvious solution to the two issues I mention above, and I am somewhat surprised that as yet we haven’t seen as large a take up as I would have anticipated - although I do feel we are pushing at an open door in this regard and such developments will inevitably become common place eventually.
"When people comment that data is the new currency, they are generally referring to insight..."
However, this I feel is just the very tip of the iceberg in terms of AR in field service and it is when we add into the system a feed of real-time data from an asset, that we will see AR truly flourish. Imagine a field service technician being able to simply look at a device and to get a visual overlay of how that device is performing in real time. The engineer would be able to identify fault, pull up asset history, and access a knowledge bank of the most suitable action for maintenance within just a few moments.
Comparative Analysis Across The Fleet
Perhaps one of the most exciting potential applications of IoT with respect to maintenance and service, is the ability to offer additional layers of advanced services, which could yield newly created revenue streams. One such example could be the application of asset data analysis across a fleet of assets to allow your organisation to provide corrective changes to settings either at the individual asset level, the individual component level or even at the macro level across the whole fleet.
Take this a step further and through the anonymisation of key data sets across an entire install base of your assets, and then the analysis of the operational performance of the install base as a whole - you could be in a position to offer your customers a solution update that could improve productivity by X%. Whilst, admittedly we are still getting our heads around the practical regulatory challenges and big questions around who owns what data, with the waters becoming infinitely more muddied by ill thought out and poorly defined legislation such as GDPR or the Californian Consumer Privacy Act, there are already examples of companies leveraging data from across their whole install base to be able to provide just such intelligence to their customers for an additional cost.
Such solutions are dependent on high level operational performance analytics, which have evolved from the world of Big Data. Don’t Forget To Make It Safe Of course, it is always more preferable to talk about opportunity, but it must be remembered that with whilst in every great challenge we can find opportunity, so to does every new opportunity present a new threat - and the biggest threat of all in a world of data-breaches and connected assets is cyber-security.
The shift to the Cloud reinvigorated the discussion of cyber-security hugely. Many were initially reluctant to make such a move despite all the various benefits of doing so, because the Cloud felt just so much more penetrable and vulnerable than an On Premise solution that had the advantage of being visible, tactile and ‘real’.
The truth is the amount of resources cloud providers like AWS, IBM and Microsoft spend on protecting their cloud offerings are so mind blowing that no on premise solution could be as risk free. Microsoft for example spend over a $1Billion dollars a year and operate 3,500 professional security engineers plus a highly sophisticated AI to thwart the incredible 1.5Million attacks they get every day.
For this reason, I’ve always felt comfortable with the Cloud as being as close as we can get to secure - whilst nothing is ever 100% safe, choosing any of the big three Cloud providers gives you as good protection as your likely to get. However, with IoT at the moment I would hesitate to be just so confident in my prediction. A large part of this is down to the technology still being in something of a ‘wild-west-phase’ with protocols still being ironed out and at the same time a huge surge in consumer appetite for IoT products has driven costs of components down, with many coming out of China which adds an additional question around security against the global geopolitical landscape we find ourselves in.
Not only can IoT components be a weak point of entry to gain access to a wider network, but should the unthinkable happen, they also pose a huge risk in terms of cyber terrorism. If a device can be hacked and it plays a role in wider ecosystem of a factory - could it be conceivable that a cyber criminal could hold a business to ransom shutting them down until they pay up? As with anything the pros and cons of a new solution need to be weighed up, and for me the benefits of IoT in field service do still outweigh the cons, but it is certainly worth putting security at the top of a list of priorities when scoping out the potential of any IoT strategy.
Rubbish In, Rubbish Out.
Finally, just a quick point on building such a strategy. As mentioned earlier, it is important to think of IoT not as an IT project and it is too engrained within business to be viewed in such a way. However, it should equally not be seen as solely as a business solution either. Digital transformation is a significant focus for many companies right now, and if done correctly this should be a platform for embracing IoT - so it is important that your IT leaders within the business also play a major part in such endeavours. But the one thought I would put at the top of any strategy planning meeting would be to ask - what is it we are trying to achieve? I would then go one level deeper and ask ‘What is it that our customers are trying to achieve?’ Then ask the most crucial question that any business has in its arsenal - why?
That should give you the right path to tread down and from there the various different layers of technology that are suitable for the goal you are trying to reach will become apparent and you can plan accordingly. Skip this process though and you may as well go right back to the old adage of the computer - put rubbish in, get rubbish out.
The IoT does offer true revolution within field service, but every revolution requires planning.
Jun 14, 2019 • Features • Augmented Reality • Cognito iQ • Data Analystics • Future of FIeld Service • GDPR • Mobile Technology • Video • wearables • Cloud computing • IoT • David Bochenski
The world of field service and the world of technology have been intertwined for a long time now. In today's world of IoT, Artificial Intelligence and machine learning it could be put forwards that Data is not the fundamental building block of field...
The world of field service and the world of technology have been intertwined for a long time now. In today's world of IoT, Artificial Intelligence and machine learning it could be put forwards that Data is not the fundamental building block of field service excellence. Field Service News and Cognito iQ have explored this concept in a new series and here in this first instalment David Bochenski, CTO Cognito iQ outlines how field service companies can the data within the organisation and why they should be doing so.
Want to know more? There is a video with Konica Minolta's Head of Direct Service, Ged Crannny outlining how they have revolutionised their business through data analytics available exclusively to fieldservicenews.com subscribers on the link below...
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"Being told these days by a provider that someone may arrive between 8 am and 6 pm and "by the way can you make sure someone will be around to let them in" is not even close to an acceptable level of service..."
"Field service companies were putting mobile devices into the hands of their engineers and receiving real-time data live from the field long before Steve Jobs, and Apple had put the Internet in everyone's hands.."
Want to know more? There is a video with Konica Minolta's Head of Direct Service, Ged Crannny outlining how they have revolutionised their business through data analytics available exclusively to fieldservicenews.com subscribers on the link below...
sponsored by:
Data usage note: By accessing this content you consent to the contact details submitted when you registered as a subscriber to fieldservicenews.com to be shared with the listed sponsor of this premium content who may contact you for legitimate business reasons to discuss the content of this content...
Jun 13, 2019 • Features • future of field service • IoT • Servitization
“The world once seemed simple; manufacturers made things and services companies did things for us. Today, increasing numbers of manufacturers compete through a portfolio of integrated products and services.”
This is how Professor Tim Baines, someone I consider to be something of a mentor to me as well as a friend, and who also happens to be one of the worlds leading academics within the field of servitization once described servitization to me, having been asked to do so in basic terms that I as a lay person could comprehend.
Of course servitization is much more than simply adding services to existing products within a few large multi-national companies as Professor Baines went on to explain. “It’s about viewing the manufacturer as a service provider that sets out to improve the processes of its customers through a business model, rather than product-based, innovation. The manufacturer exploits its design and production competencies to deliver improvements in efficiency and effectiveness to the customer.”
In context of the traditional product-centric viewpoint of manufacturers, this is of course a radical and seismic shift. A fact that Baines himself can never be accused of underplaying, often referring to us as living through the fourth industrial paradigm - the previous three coming via mechanisation and steam power, followed by the mass production line, and then computing and automation.
The fourth paradigm that we are currently adapting to is a world of cyber-physical products. Or to put it in more familiar terms perhaps, a world of IoT and connected assets. If you have spent anything more than 5 minutes talking about servitization, then you will most likely already know that as the inventors of ‘powerby-the-hour’ some 57 years ago, Rolls Royce are something of a Poster Boy for the movement.
But wait! I here you cry. If Rolls Royce managed to pioneer their own brand of servitization so long ago, when we hadn’t even established an internet, let alone one built literally just for ‘things’, then how can you say IoT is fundamental to servitization? It is of course a hugely valid point.
Servitization has been demonstrably proven to be possible prior to the age of IoT. However, there are a few core factors shared amongst Rolls Royce and the other early pioneers of servitization such as Caterpillar, Alstom, and MAN UK. Firstly, there is a layer of innovation within their leadership and organisational DNA. This is true of all pioneers, some companies are prepared to take the greater risks and push boundaries past what is the current normal. However, in many cases, those servitization pioneers also had strong other revenue streams that gave them the opportunity to fail if needs be without sinking the whole business.
It is certainly a luxury that not all companies have but cross sector organisations such as Swiss heavy manufacturing giant ABB, have proven to be an excellent example of how to leverage reputation, cross industry learnings but also how having the additional breathing space of being a multi-vertical, mutli national organisation allowed them to drive their own servitization strategies.
But the one thing that almost all of these companies in the early vanguard of servitization also shared, was that they were relatively advanced in telematics and that they could see not only the potential value of the data they were able to take from their assets but also, more importantly how they could take that data and build it into meaningful insights for their customers.
Crucially, they understood they could utilise the information on how their assets were performing to help guide their customers to a far more effective understanding of their challenges, and then step in to offer further, more complex solutions that were specifically in line with their customers’ desired outcomes. They were able to take the data and become integral partners within their customers’ business ecosystems rather than just one of many transactional relationships - and whilst I am by no means an expert on the topic myself, I’ve spent enough time with Professor Baines and many of his academic peers over the last few years to understand that this is at the core of why servitization is such an attractive proposition for supplier and customer alike.
Deeper relationships provide greater output, stability and effectiveness for the customer and deeper customer loyalty, greater profits and longer term contracts for the supplier. And now as the IoT, and even more importantly it’s enterprise equivalent the Industrial Internet, begin to mature into something more meaningful than connected toasters, and as we begin to see companies start to at least acknowledge, if not yet truly harness the potential of IoT, what we are seeing is the democratization of servitization.
"Servitization has been demonstrably proven to be possible prior to the age of IoT..."
It is no longer just those companies who can afford to be innovative, that can now embrace servitization. It is not just those companies who already have access to, or deep enough pockets to be able to invest in connected assets that can explore the numerous advantages of adopting an advanced services strategy. It is also not just manufacturers either. In fact, the rapid rise of IoT has enabled many smaller, third party service providers to capitalise on gaps within original equipment manufacturers, or in some cases even utility providers, service offerings.
This has allowed them to carve out service-centric businesses that were frankly, missed opportunites for the slow to react enterprise organisations whose sector they disrupted. For example, there is the French start-up who were able to make significant inroads into the Liquid Petroleum Gas (LPG) hospitality sector by offering to fit their clients gas tanks with cheap but effective sensors so they could offer guarantees of uptime instead of the old model of a restaurant always buying surplus to avoid running out of gas mid shift. Or the company that provided sensors for heavy industrial bins, which allowed them to disrupt the refuse collection in their local market by offering a collection service based on need rather than schedule - again a start up that utilised outsourcing, innovation and IoT to disrupt an established market. Or the third party service provider that specialises in coffee vending machines that was able to create an additional revenue stream for their organisation by identifying buying trends within specific store locations and translating that data into insights for their customers who could in turn leverage local population preferences with focused promotional campaigns.
Each of these examples, were driven by use of and an understanding of how IoT can offer additional value to the end customer. Each of the above examples is also a demonstration of a company identifying the additional revenue for advanced services beyond the traditional scope of the service provider.
The essence here is that they are all based on an understanding of the desired outcomes of their customers. So whilst field service companies should absolutely be looking to explore how best they can improve the efficiency of their service delivery through IoT, the real gold is in understanding how you can improve your effectiveness in helping you customers achieve their goals.
That is in a nutshell is servitization and that is exactly where the greatest value of the IoT will surely exist.
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