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Despite an uncertain economy, service industries will continue to evolve with artificial intelligence technology and long-term contractual agreements
At the beginning of the year, IFS published an article predicting that field service organizations and product-centric businesses will continue adapting towards a business model that establishes ongoing maintenance and repair contracts. Even though the coronavirus pandemic has caused major economic disruptions, the year’s earlier predictions remain relevant. Here is a summary of the IFS findings:
Prediction 1: Outcomes-based mindset will drive aftermarket service.
For decades, some manufacturers have sought ways of servitizing their products to gain higher and more predictable revenue streams. Couple that with a scenario where customers are seeking to lower risk by purchasing items with service contracts that span the lifecycle of the product, and we are seeing an increased demand for long-term customer relationships.
By IFS estimates, roughly 16% of manufacturers globally were fully servitized in 2018; by 2020-21 that figure will be closer to 25-30%. Although servitization represents a tremendous opportunity for growth, there is also a great deal of inherent risk to ensure that management and software solutions are equipped to deliver against long-term agreements.
With the proper technology in place, organizations can turn their data into a strategic tool that balances aftermarket revenue streams with enhanced customer experience.
Prediction 2: Digital transformation will present challenges
IFS findings show that the larger an organization is, the more difficult it may find integrating and adapting to new technologies. In recent years AI and IoT (the internet of things) have made significant inroads with operational automation and data collection. On the near-term horizon, these technological advancements will expand into the front office and administrative processes, as well as into the areas of finance, inventory, and supply chain management.
Prediction 3: IoT becomes more and more significant
Research shows that the biggest interest area of technology implementation across all industries is in predictive and prescriptive maintenance. Companies are already experiencing the value of data collected from assets, vehicles, and other field equipment, but they realize the volume of information can overwhelm if not put to good use. In 2020-21 more focus will be dedicated to identifying software tools that provides reliable analytics.
Prediction 4: Need to balance AI and human experience
While embracing the value of automation through artificial intelligence, leading companies are also understanding that human interaction is key to the customer experience. In many cases, the jobs lost to AI advancements will create opportunities to assign employees to more customer facing positions.
Click here to read the full article by Sarah Nicastro.
