The Role of Data in the Servitization Journey

Data is becoming more important as we consider one of the most significant trends impacting the technology industry, "Servitization".

Several years ago, Blumberg Advisory Group worked with a company that provided hardware maintenance on film based photo labs found in big box retail outlets. Their service revenues and profits were declining because digital photography was replacing the need for film based photo labs. Although the client offered a new digital based technology to replace film based photo-labs, these systems were not being installed at the same rate as the older systems were being phased out.   Digital systems didn’t require as much service and support. They were less complex and easier to maintain than their film-based cousins.

Our client required a new strategy to offset their declining revenues and profits.  They needed a solution urgently or the parent company would shut down this division.  If we did not know the importance of data or the concept of managing the capability to serve, we would have probably recommended that the client lay off some of its field service workforce to reduce costs and improve profits.  This could have led to a downward spiral of layoffs, company morale and growth.

So what steps did we take?  We analyzed their data.  We reviewed their field engineer utilization rates, customer response times, field engineer skill levels, and the equipment on customers’ premises.  In conclusion, we found that their field engineers were not being completely utilized.  We found out that these engineers had further knowledge and expertise in supporting other types of equipment found on the customer site.  They were typically able to respond to a customer request within four hours even though the guarantee was for eight.  

Based on our analysis, we recommended that they expand their service footprint to other types of equipment located on the customers’ premises, i.e. electronic cash registers and point of sale equipment.  We also recommended that they charge a premium price to customers who required faster (e.g., 4 hour) response time.  As a result, this client went from losing 20% of their profits per year to a 50% increase in new business within 24 months of implementing our recommendations.

Ultimately, the key to our client’s success lied within the data.  Data is becoming more important as we consider one of the most significant trends impacting the Technology Industry, “Servitization”.  This trend describes the transformation that many companies are undertaking as they move from primarily selling products to generating a sizable portion of revenue and profits from services.   Ultimately, the path toward Servitization leads companies toward offering anything as a service (XaaS).  In other words, their business has reached the stage of development where they are no longer selling products or solutions to their customers, but outcomes.   For example, instead of selling a copier machine they are selling their customer the right to use the machine to produce a certain number of copies over a specific period or time.

To deliver on this promise, the provider must not only have great people, process, and technology but access to data related in terms of machine condition and performance (e.g., alerts and notifications), parts availability, field engineer location and skill sets, diagnostics, etc.  With this data in hand, the provider can ensure resources are available when needed and that the customer receives the outcome it purchased.  The data is made available through technologies like the Internet of Things, Artificial Intelligence, Virtual Reality, etc.   Examples of companies that are along the servitization journey are Rolls Royce, ABB, Siemens, Kone, and General Electric. They have generated profitable income and know that a truly exceptional service business is built on four foundations – people, process, technology, and data.

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What to Expect from AI in the Field Service Industry for the Next Decade

Sarah Jacobs is an experienced writer who loves creating articles that can benefit others. She has worked as a freelance writer in the past making informative articles and fascinating stories. She has extensive knowledge in a variety of fields such as technology, business, finance, marketing, personal development, and more. Find out more about her company here: http://www.lea-p.com/

When we hear about AI, which stands for Artificial Intelligence, we often remember Hollywood’s definition of it. Who could ever forget the doomsday prophecies of the Terminator series? While movies might picture AI as humanity’s greatest enemy, the reality is far from it. AI’s history can be traced back to the time of the Greeks and their myths about the golden robots of Hephaestus and Pygmalion’s Galatea. The basis of AI is on the assumption that human thought can be mechanized. This even dates back to the ancient civilizations like China and Egypt where craftsmen built automatons which the people believed to contain real minds. It was not until the 50s that studies in AI had kicked off. From then, we have had AI machines that have proven their capacity to “think”. Deep Blue, from IBM had defeated Russian grandmaster Garry Kasparov in a game of chess in 1997. In 2011, Watson, also a computer, won against Brad Rutter and Ken Jennings, both champions of the famous game show “Jeopardy!” Just this year, a Chatbot named Eugene Goostman passed a Turing test.

Artificial Intelligence is greatly beneficial for the field service management industry. It is AI in action when we hear SIRI’s voice, or when we hear that automated voice that answers the phone when we call the bank. While there is a lot of discussion about the eventuality of human workers being replaced by robots and computers, no one can argue the fact the AI has improved efficiency and worker’s skills. Companies now have AI and virtual assistants to communicate and interact with customers. With the technology in place, there is plenty of room for development for the use of AI in the future.

New Skills

When a business adopts AI technology, the people working in the company can sometimes be threatened by it. It is true that there are risks of being replaced by machines, but what we sometimes do not realize is that having the technology is actually going to make us more effective. Much like how the computers replaced the typewriters, we can gain new skills and adapt to the use of the new technology. Though there are many forecasts of how AI can be a threat to job security, this can be a good avenue to improve oneself, and explore what other things a person can be good at, aside from his job.

Improved Searches and Scheduling

It didn’t take two generations to notice the big leap we had on searches. Today, service technicians use software in order to search for customer information. Building on this, Chatbots can be useful in pulling up information and history in a conversation-based interface. Think of SIRI but on a business scale. Using the same concept, Chatbots can improve scheduling. What we have right now is an annoying series of voice prompted menus. It is confusing and time-consuming. It would be good to develop a bot which you just need to chat with, and it will do your scheduling for you, and it would be even better if it can do predictive scheduling, where it can monitor and predict your schedule, and all you would need is to confirm it, and it’s done for you. That way, it will be hard to miss your biannual dental appointment, or your annual check-up.

Predictive Maintenance to a Whole New Level

In the situation where technicians have to go on site to check the status of machinery and equipment, predictive maintenance is a great help. AI can do the job of making sure that equipment and machines are working at an optimal operating point. And should there be a need for maintenance, it can schedule for a worker to provide the work needed. This is a great help to technicians, as they would not be needing to check on the equipment all the time, and they will be able to work on whatever else they need to do.

While Artificial Intelligence has a promising future, there is still a lot that needs to be developed for it to be fully integrated into any system. Data is in abundance, and AI now has a lot of information to work on that can improve its capacity to think better. However, this overload of information is not enough for AI to be useful. There is a need to interpret the information and translate it into knowledge that can then be put to use, much like how our brains work. We get information and our brains process that information into knowledge and from what we know, we do. This is the key to unlocking the potential of AI, and once we find out how to do exactly that, then there would be no stopping the potential on the use of Artificial Intelligence in our lives.

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