Service interest around the Internet of Things

If you follow technology trends and news, you have probably heard the words "Internet of Things" (IoT) or "connected machines" mentioned more than once, primarily in the form of how connected devices will change the world, mostly for the better (and not as per the Terminator 2 variety). In the business realm, a lot of the IoT talk is coming from the likes of IBM, GE and Cisco.

The concept of connected machines is not new. Some of the business models enabled by connected machines and devices are new.

For service organisations, particularly in the manufacturing space, connected machines have long supported field service and customer support procedures. In fact, early returns (50 organisations) for The Service Council’s (TSC) connected service enterprise survey reveal that 72% of organisations currently leverage remote monitoring or machine-to-machine connectivity to support service delivery. Of that group, nearly 80% have been monitoring equipment for more than 3 years.

As mentioned earlier, what is changing is the way in which organisations are using remotely captured equipment data to enhance customer relationships. For instance, 40% of organisations indicate that the reduction of primary field service dispatches was the major motivation for investing in remote monitoring when these investments were made more than three years ago. Now, 36% of organisations indicate that investments are made to support predictive service delivery and another 16% indicate the desire to enhance revenue opportunities. This follows a maturity model that can be categorised as follows:

Level 1: Improve reactive service

Desired benefit: Cost containment

Achieved via:

• Diagnostic information captured directly from the machine can aid in the appropriate scheduling of technicians and parts for the service task.
• Information captured at the point of customer contact can also promote self-service resolution, if applicable.

Level 2: Invest in Preventive/Predictive Service

Desired benefit: Customer satisfaction enhancement

Achieved via:

• Remote monitoring can trigger alerts if asset performance fluctuates outside of accepted norms. As a result, steps can be taken to support an inspection of the asset, by the operating or servicing organisation, in order to fix the issue before it becomes critical.
• Trending data on asset performance tracked against established benchmarks can also alert the servicing organisation to future failure, therefore triggering service actions to prevent future performance deterioration.
• Intelligence gathered on asset performance as a whole can support planning initiatives in the servicing organisation allowing for adequate resource coverage during periods of high service demand.

Level 3: Develop intelligence-based services (Benefit: Revenue growth)

Desired benefit: Revenue growth

Achieved via:

• Asset usage information can yield the generation and administration of new services aimed at increasing customer value. These include: intelligence services and benchmarking, consulting services, asset optimisation services, training and consumable replacement services.
• Usage information can also support pay-per-use or other consumption-based payment models where the asset or machine operator pays a certain fee tied to the use or uptime of the asset.

Most organisations that have invested in remote monitoring are still in the first two stages of the model highlighted above, while beginning to think about the business case to support level three. This involves building the infrastructure to support these services as well as developing a funding plan that allows for these services to be offered. Will customers pay? Or are these lumped into the standard product offering? These are areas that we are digging into in our research. If interested, please feel free to participate in our latest research survey. I look forward to sharing the results with our readers soon.

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