Resource Type: White Paper
Published by: IFS
Title: The IFS Digital Change Survey
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Synopsis:
When a car leaves a factory, this no longer signifies the end of the relationship between manufacturer and vehicle. The car goes into the next stage of its lifecycle, where it must be maintained and serviced. Businesses are realising that this servicing offers a significant revenue stream. For example, automotive manufacturer margins on new vehicle sales range from eight to 14 per cent, whereas servicing a brake disc carries around a 65 per cent margin.
As businesses become service-oriented, digital transformation gives them the tools to change.
By enabling visibility of an asset using the Internet of Things (IoT), the provider can better understand its use in the real world and feed that back into its research and development (R&D) process. Any issues from the manufacturing process that affect usage and failure rates of equipment can be managed via the IoT feedback loop. Data analysis using business intelligence or big data and analytical tools can derive value from that data.
Historically, companies have seen service as a cost centre and a necessary evil. Now, Digital Transformation is enabling more organisations to realise the potential that service has as a profit centre. Yet there is considerable variation in maturity across the sector globally. This exclusive white paper by IFS offers key insights into their research of Digital Transformation and how it is being implemented.
Overview:
Service: Leading the Way
Across many industries, manufacturing and products have become commoditised; service is now the differentiator. The winners in the service sector are those able to stand apart through their ability to support a product across its lifecycle, or support a client whose services they manage.
When set against other sectors, service organisations are leading the field in innovation and transformation
The top five factors behind digital transformation reflect this potential, with four of the five being sales, innovation and customer relationship-driven. Chief among these is ‘growth opportunities in new markets’. In reality, these growth opportunities are not new but have been expanding for some 20+ years. What is changing is recognition of these opportunities. Many organisations have been slow to recognise service as being a key driver to their overall business success.
A New Hope:
The service industry is reaching a critical point with its ageing workforce. An enormous level of knowledge, possessed by the veterans and gurus of the industry, is walking out of the door as these workers reach retirement, or are no longer effectively supported by the business. This can have more of an impact in service than anywhere else, as the level and quality of service on offer can be directly impacted by the individual that performs the service.
In developing and recruiting talent, DT has a significant role to play. Intelligent knowledge management systems can enable a six-month recruit to perform those maintenance or repair services that would have previously been the [quote float="right"]Where firms operate a service within a service, such as an elevator in a hotel, it is in the interest of both the hotel operator and the elevator service organisation to create the optimum customer experience, because they share the same end consumer
domain of a 10+ year veteran. Technologies such as augmented reality (in the form of Google Glass or Microsoft HoloLens), can be usedto virtually project onto the physical equipment an animated disassembly procedure for swapping out a part onto the physical equipment.
The greatest talent gaps reported by service providers are in the areas of business intelligence (BI) and cybersecurity, with the former particularly keenly felt in North America.
Big data/analytics and BI are crucial in supporting a quantifiable business, and unlike many other industries, service is very easy to measure. Metrics such as first-time fix rate, mean time to repair, mean time between services, and service level agreements are commonplace. It is crucial when marketing a service that the provider is able to cite a percentage level of service and agree that level with customers in their SLA.
Joining Forces:
The need for collaboration is higher in the services sector than in any other, based on the IFS cross-industry research. At a sector-wide level, the delta between desired levels of collaboration and actual levels of collaboration is 2.7 points on a ten-point scale, meaning there is a desire to increase levels of collaboration by 49 per cent.
Where firms operate a service within a service, such as an elevator in a hotel, it is in the interest of both the hotel operator and the elevator service organisation to create the optimum customer experience, because they share the same end consumer
The demand for close collaboration is not surprising – firms such as Dell have a fully outsourced service provision for their field technicians, which means a considerable source of potential revenue is in the hands of trusted third parties.
Where firms operate a service within a service, such as an elevator in a hotel, it is in the interest of both the hotel operator and the elevator service organisation to create the optimum customer experience, because they share the same end consumer, who is jointly judging the product and judging the service.
Given the delta, many firms are clearly still not optimised in their digital transformation and will need to achieve a stronger bond between their partners and their internal teams to realise the full value of servitization.
Want to know more? Access to this resource is available to Field Service News subscribers only - but if you are a Field Service Professional you may qualify for a complimentary industry practitioner subscription!
If you are a field service professional you can apply for a complimentary industry practitioner subscription and we will send you a copy of this white paper along instantly.
(Please note that by applying for your subscription via this link you accept the terms and conditions here and a plain english version is available from our main subscriptions page here)
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