Service Model Transformation Enhanced By Digital Transformation

Discover how manufacturers are building customer loyalty, retention, and satisfaction
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The manufacturing industry is no stranger to disruption or transformation. New entrants, shifts in customer buying behavior, supply chain constraints, regulations, geopolitics all have provided varying degrees of strife for discrete and process manufacturers throughout history, and all seem to have had a sometimes-crippling effect over the past 12-24 months. As much as things change, they stay the same. The manufacturing industry however has had to confront the need to think differently even as the challenges seem like those of the past.

As manufacturers navigated the turbulent waters of the past 24 months and look out to the coming years, innovative technologies will be critical to their growth and sustained success. Digital transformation can sometimes be viewed as a buzzword or marketing term to be discounted. However, IDC research highlighted that organizations able to close the digital gap returned to growth faster and were nimbler than their peers who did not embrace digital transformation. Furthermore, in IDC’s Future Enterprise Resiliency & Spending Survey Wave 7 (August 2021), only 14.6% of manufacturers sampled planned to spend less budget on IT year-over-year from 2020 to 2021. But this investment isn’t just on cool technology or pilot projects. To succeed organizations are leaning on transformative technologies like cloud, artificial intelligence (AI), mobility, augmented and mixed reality, the internet of things (IoT), and machine learning (ML) to grow profits, increase innovation, enable employee productivity, drive operational efficiency, and improve the customer experience.

Along this journey of digital transformation, manufacturers are establishing a broader set of offerings which now include more value-add services for customers. Historically, manufacturers or their dealers focused primarily on consumable sales or standard service contracts to ensure equipment uptime and customer productivity. However, as commoditization of products and rising customer expectations for experiences grew, the ability for a manufacturer to deliver a new set of outcomes has now become table stakes.

The era of service as an aftermarket activity solely resulting from the sales of equipment is becoming a relic of the past. Leading manufacturers and service providers recognize the importance and impact of the service experience in building customer loyalty, retention, and satisfaction. However, though the concept of service is apparent for many, the ability to execute on this promise of quality service experiences is no easy task. Customer expectations evolve quickly, competition looms to take back wallet share, and the front-line service team often lacks the tools to deliver more enhanced experiences while trying to efficiently close the work order at hand.

In IDC’s Product and Service Innovation Survey (May 2021, n=808), manufacturers stated a need for faster response to product quality & service issues, the desire to improve key customer metrics, and to establish more capabilities around remote service, collaboration, and resolution as top drivers for their respective service lifecycle management efforts. As manufacturers decide to address these drivers and others, I recommend these companies consider confronting the following questions:

  • What do your customers or customer’s customers value?
  • Does your organization have the digital capabilities to address business model shifts quickly at scale?
  • Does line-of-business work with IT to identify, select, and deploy new technologies?
  • Do your dealers, distributors, suppliers, and partners have a shared set of insights to act upon?
  • Do you have the leadership in place across the enterprise to weather future disruptions with both a short- and long-term strategic vision?

To learn more on Service Business Model Transformation you are invited to join Aly Pinder at the Digital Manufacturing Summit being held May 19th in Chicago. 

Aly is responsible for research which aids manufacturers as they evaluate innovative technologies like 3D printing for service operations, augmented and virtual reality in field support, and the use of IoT and advanced analytics for remotely monitoring and managing assets. Aly establishes a roadmap for the manufacturer to better understand how technology can transform service and support functions, to drive exceptional customer experiences and customer value, profitable revenue growth, and improved efficiency in the field.