Research from IDC found 40% of discrete manufacturers will deliver product-service systems this year, in large part, due to the IoT.
Kyle Irby, an advisor with PTC’s IoT Transformation Advisory Practice, isn’t surprised. He’s hosting a session at LiveWorx 2018 on how the IoT is enabling manufacturers to turn their service organizations into revenue drivers.
In lieu of his session, I had the chance to ask him a few questions about why the IoT is such a good facilitator of product-service systems.
The tricky thing about turning service into a revenue driver is that it can’t just be about efficiently fixing products when they break. You need to rectify issues before customers even know about them. To do that, you need real-time performance data, historical utilization data, predictive analytics, and all these other technologies that weren’t available until the last couple of years.
Back when I was at Sears Home Services, we were trying to figure out how to do IP over electrical lines because we wanted to get data off appliances. We were trying to do this at a time when there was no Wi-Fi, no Bluetooth, no 4G – nothing but copper wires. Still, we understood the value and power of predicting when an appliance was going to break 20 years ago.
I’d say the best positioned are those that have a legacy of being connected:
Connected service does have technological and fiscal hurdles for some industries. I see a lot of potential in construction and heavy equipment, but the problem with those sectors is that the assets themselves are mobile and geographically dispersed. The cost of getting data from a bauxite mine to a data center is, generally, pretty cost-prohibitive.
Look for IoT capabilities that focus on operational efficiencies, which can increase margins for current operations. There are a few ways they can use the IoT to drive bottom-line results:
Again, these are just efficiencies, but they set the foundation for product-service systems. It gets organizations using IoT; building processes and solutions that systematically pull and process data from connected products. So, when the time is right to launch a product-as-a-service model, service executives will be able to use the IoT to facilitate that transformation.
Want a chance to hear insights from Irby and other service experts? Register for LiveWorx below for exclusive access to sessions about connected service, service parts optimization, and augmented reality: