This blog offers additional insight gained from IDC Manufacturing Insight's recently fielded Product & Service Innovation 2015 Survey, more specifically in the area of service innovation.
Last month, my colleague Jeff Hojlo, treated readers to a glimpse of some of the key results we gleaned from our inaugural Product & Service Innovation survey, in his blog post. As we are on the cusp of publishing the first major report that includes some of our data, I wanted to share a few points around Service Lifecycle Management (SLM) and where manufacturers see themselves today with regards to moving toward service innovation.
One of the greatest catalysts toward service innovation has been the rise of connected products and IoT. Technology including software, sensors, IP-enabled connectivity, cloud, mobile, and data analytics have been combined to create a platform that enables manufacturers to track products throughout their entire lifecycle, to improve service and the quality of future products. Manufacturers are eager to take advantage of the rich data produced by connected products to respond quickly to quality issues, but also to build a library of quality and service data over time that enables enhanced service. Ultimately, manufacturers will need to use the product innovation platform to drive the practice of Design for Serviceability, where connected products are instrumented with the sensors that service departments haves identified are critical to enabling predictive and eventually prescriptive maintenance.
But most manufacturers are not there yet: only 23.3% of respondents, for example, characterize their approach to service as proactive, with a focus on product monitoring. The largest group of respondents (38.8%) characterize their approach to services operation as reactive, with the focus on break/fix efforts. These results align with what we hear when we speak with service managers within manufacturing companies. While there is much talk around connected products, in reality only a minority of companies have successfully been able to capture, analyze, and act upon the performance data that products generate during their operation.
There is solid indication, however, that the level of service manufacturers offer to their customers in the coming years will shift significantly toward preventative and eventually proactive services as customers will increasingly expect a more proactive approach to service due to connected products. In fact, our survey results indicate that manufacturers intend to more than double the percentage of connected products they manufacture in three years' time. Clearly, we are on the precipice of a big change in how products are managed once they are out in the customer's possession.
This activity is driving manufacturers toward what IDC Manufacturing Insights calls Connected Service, which we define as differentiated service from the product’s OEM through connected products that adopts a service lifecycle management approach to aftersales service. Connected Service leverages data from connected products and a 360-degree view of the customer to drive additional service offerings such as preventative and prescriptive maintenance, parts/consumables replenishment, and in some applications self-healing capabilities. Look for additional research on the rise of Connected Service and more insights we have gained from our Product & Innovation Survey!