Preparing For the Internet of Things (IoT) In Field Service
John Ragsdale from analyst group TSIA and Jeremy Frank from ServiceMax teamed up on this webinar to advise field service oerganizations on how to prepare for the Internet of Things (IoT) in field service.
Great, thank you John and than you to everyone on the webinar for joining! My name is Jeremy Frank and I am the director of content marketing at ServiceMax. My job here is to create useful, educational content for the field service industry with contributions directly from experts in the industry, from ServiceMax customers and from our in house experts. The Internet of Things is certainly one of those areas that is certainly getting a ton of interest.
I just wanted to quickly give you an idea who we are at ServiceMax. ServiceMax is a complete end to end field service solution. We have been around since 2008 and work with companies in all sorts of industries like Coca-Cola Enterprises, Medtronic, Tyco, Schneider Electric and more. We are completely cloud and mobile based and just this year we were named a leader in the Gartner Magic Quadrant. Please check us out at ServiceMax.com
Here today to talk about IoT
Lots of hype, but it’s real. Analysts, journalists, companies all agree.
Before we get into that, want to look at where we are now and where we have been
Past 7-10 year, companies are rethinking field service and technology has been at the heart of that
It has become strategic, Profitable. And companies have moved from clunky ERPs and whiteboards and spreadsheets to the cloud and mobile technology which has enabled where we are today
So where are we going as an industry?
Ok, so, we are here today to talk about the internet of things and how companies should be thinking about the future and preparing for what’s next. While there certainly is quite a bit of hype around the internet of things, the consensus among companies and analysts is that it is real and it is happening so there’s very little question that it’s something companies needs to be preparing for.
But before we get into that, I was to look at where we are today and where we have been as a field service industry. The past 7-10 years have been pretty revolutionary for field service organizations. An industry that was forgotten and treated as a necessary evil and a cost center has really come to the forefront of business discussions and even business technology discussions. So many companies have completely transformed how they deliver service and a lot of that is because there was finally technology and mobile devices that enabled them to do it. Companies running big cumbersome ERP field service systems or even whiteboards and spreadsheets.
So that was a huge leap forward for the industry. A massive change and for a lot of leading organizations, they have achieved this. The adoption of cloud and mobile is well under way.
The next massive leap forward is service becoming the product
Instead of the model of selling a product to a customer, companies are selling outcomes. Their products become service.
Field service and the internet of things are at the heart of this and are what will make it all possible. Will explain in more details as we go on in this webinar
For most companies this is the future. Aspiration. Want to talk about some of the things in the near future that you can start to think about and prepare for that will impact your business, customers and competition.
But what’s next? Next next massive leap forward for our industry will be the shift from providing service as we know it today, to providing products as services. So service will be at the heart of so many companies’ business models. We’re already seeing this from GE who is transforming the way they partner with their customers to provide business outcomes instead of just products.
How to the Internet of Things fit into this? It is ultimately what will make this possible, and as I go through this presentation, I will explain this in further detail.
For most companies though, this is very futuristic. It’s aspirational. It’s not a dream, a lot of companies are already going down this road, but for many cmpanies, there are baby steps before getting here. So I want to go through a few scenarios that we’re already seeing today with the IoT and how they are going to impact field service. Ultimately these are what your company can be preparing for in the short term.
First off it how IoT will impact how your company builds products. On minds of engineering and R&D everywhere.
Tesla great example. All connected, more insights
And this will ultimately impact how products are sold. You will be selling data too to help their business.
And of course Service, which is why we’re here today
First off, is the fact that the IoT will transform how you build your products, how you sell your products and how you service them. Tesla is a great example that is building their products from day 1 with the internet in mind. Everything is connected. I’m sure that a lot of your engineering and R&D departments are thinking about how they are going to build the next generation of products to connect to the internet, provide more insights and take advantage of the IoT. Well, this is also going to impact how these products are sold – you’re selling data and other value added products to go along with the physical product too.
Next is Machine 2 Machines
Seeing this already a lot today
You get an alert that something is up, and you go fix it. Often before the customer knows
Enphase story – microinverters
Seeing a lot with Med Device. Here today and companies are already taking advantage of it
Next is something that we’re already seeing quite a bit of today. This is the IoT being used in it’s simplest form. Products are sending simple alerts to service organizations to let them know that something’s up. One of our customers, Enphase, manufactures and services a microinverter that is part of a larger solar energy system. Those inverters send all sorts of data back to the home office and they ultimately know when one needs to be replaced based on that information – and the customer almost never even knows something was up with their solar array. We are seeing this quite a bit with medical device companies too. This is here today and many companies are already taking advantage of it.
Next is remote diagnostics and maintenance which John already covered very well.
This is huge for field service and powered by the Internet of Things.
Know exactly what’s happening to your machines. Can first see if it can be fixed by a remote technician and avoid truck rolls
Big thing here is remote diagnostics. Even if a technician does need to go out, he can get the parts and knowledge he needs to solve the proble.
John talked about the huge savings in parts from being able to automate this kind of thing.
But this also means much higher first time fix which is often the biggest way companies can reduce service costs
The next area I want to touch on is remote diagnostics and maintenance. John went over this very well. On the one hand, your company will get to know details of a product issue immediately and save numerous truck rolls by having them fixed over the internet by a remote technician. Of course that isn’t always possible and a field technicians will need to head out to the site in some cases. But the beauty of this model is that with the remote diagnostics, that technician knows exactly what he’s stepping into when he gets to the customer site and can already be armed with the parts – which as john mentioned, can be automatically ordered based on this same data – and the knowledge he needs to get the customer’s problem fixed quickly and ensure a first time fix almost every time. Improvements in first time fix rates are one of the most significant areas a field service organization can cut their costs.
Huge impact on preventative mainetnance
Model today – agreed upon number
Not good for customer or company – lots of guesswork. Different machines in different locations.
Too many – customer inconvenienced and costly to you. Too few – machine might go down. Again, no one happy.
IoT data will help take the guesswork out and optimize preventative maintenance.
Predict exactly when you need a PM and avoid downtime
The Internet of things will also have a huge impact on how we perform preventative maintenance. The model today is often an agreed upon number of preventative maintenance visits that is stated in a contract. A company generally knows how often they need to do these. Well, that model isnt’ good for the company or the customers. The same products in different locations at different customers sites will often need varying amounts of maintenance so companies are often guessing at how often they need to go for a visit. Too many and you’re losing time and money – and the customer is being inconvenienced. Too few and you could be facing some downtime and the customer of course wants to avoid that at all costs.
The internet of things and all the data you will be getting from your devices will take the guesswork out of this. You will be able to predict exactly when you need to perform a preventative maintenance. You will know exactly when it’s time to go to the customer site to avoid any downtime. This means you will optimize the number of visits to the customer site, the customer will only be inconvenienced when necessary, and ultimately the goal here is to avoid any unplanned downtime on their products. That’s really powerful.
And then number 5 is equipment tracking – not the most interesting sounding, but incredible important
This means knowing where you products are, how they are being used, whether collecting dust
And this information can have implications at your company far beyond field service – sales and marketing
There are huge revenue opportunities
And then number 5 is equipment tracking. Of all the ones I just talked about this certainly doesn’t sound very exciting but this is crucial to your company being able to take advantage of the IoT and to generate revenue from your products. This means knowing where your products is, but also knowing how it’s being used, how it’s performing and whether it’s gathering dust in a corner of a hospital or factory floor. This information can have implications far beyond just service – as a marketer myself, I know this would be extremely valuable to me and sales.
So let’s just talk about the additional revenue you can get from product if you are tracking them
Revenue from sale but also all these other things. Probably a bunch more you can add to this list
If you don’t know anything about your product though, all of this revenue potentially goes away
So let’s just talk about all the additional revenue you can get from your products if you are able to track your products and know a ton of information about every single one in your installed base. You of course make money on the sale, but after the sale is where the real money comes in. These are just a few of the ways you can capitalize on your products after the sale. I’m sure we could add a bunch more here. But ultimately you can only do these things if you know your products – where they are, how they are being used, what the warranties and contracts are. If you don’t know that infomration, all of this potential revenue LITERALLY disappears.
And to take this one step further, if you don’t know your products, you can not take advantage of the Internet of Things.
The T is one of the two big letters in IoT and it’s an important one. You must know where your things are to leverage them in the Internet of Things.
This is the first step that any company needs to take no matter where they are on the spectrum of implementing an IoT strategy. Know your products.
It’s ulitmatley this connection to your products that is the essential groundwork needed to get to the holy grail of the interent of things which is
Well the same is the case with the Internet of Things and this is why knowing your products is the one thing you can do TODAY to prepare for the Internet of Things. If you look at the word IoT here, you see a big I and a big T. The I is important, but the T is equally as important – you need to know your things, your products, you installed base. That is ultimately the first step. This may seem like a big undertaking for a lot of companies but we’re seeing some pretty innovative and simple approaches from companies to gather this information and make sense of it.
…which is Service as the Product. Delivering outcomes to your customers.
We see a GE locomotive here. They are selling freight throughput instead of just the locomotive.
Jet engine manufacturers are selling things like hours of power and peformance.
The future of the industrial business model is selling outcomes and the internet of things is at the heart of it.
I mean, how many customers of yours would prefer this? Takes the risk out and makes you as the vendor accountable. That is competitive differentiation
For GE to do this, they need to have an ongoing connection with their products and know every detail of what’s going on so that if something does come up they can quickly react to it to ensure no downtime and that they are meeting their promises to their customers.
Knowing your products and having a deep connection to them is ultimately how companies are going to reach this holy grail of the IoT that I talked about earlier where service is the product. Where companies are selling outcomes instead of just selling products. We see a GE train here – well, they are starting to sell things like freight throughput instead of locomotives. Jet engine companies are selling hours of power and performance instead of the actual engines. The future of industrial business models is selling outcomes and the internet of things is at the center of it all. How many customers of yours would rather buy a business outcome than a product? It takes the risk away, it makes you as the vendor accountable, and it give you valuable data that you can pass along to your customers to help run their business better. All of that is very good for your customers’ businesses and I can’t imagine a better way to differentiate from the competition.
So, for a company like GE to deliver on their contractual promises to customers, they need that intimate relationship with their products. They need to know every detail of what’s going on at any one time so that if something does go wrong they are able to address it before it affects performance and affects the outcomes they have agreed upon with the customer. With 1 Terabyte of data coming to GE from every flights – that’s over 1,000 gigabytes – they certainly have the data points to do it.
I just wanted to conclude with one last thing. I don’t want to make this an advertisement at all, but I did want to put forward an example of what we’re doing as a company to turn the hype of the Internet of things into reality. There is so much talk about it, and ServiceMax wanted to take action. We recently announced a partnership with PTC to join their leading IoT technology powered by their acquisitions of a couple companies -- Axeda and Thingworx – with ServiceMax’s field service solution. Service really is the killer app for the IoT. It’s the best and most profitable use case we know of today and ServiceMax and PTC have already developed an integration that we showed at our user conference last week, so we’re looking forward to helping your service organizations leverage the IoT in the near future.
So that concludes my section of this webinar and I think John and I would like to spend the last few minutes of the webinar answering any questions you might have.
Preparing For the Internet of Things (IoT) In Field Service
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Preparing For The Internet of Things in
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The Internet of Things
• IoT definition:
– Networking of
through the use of
actuators, and other
devices that can
collect or transmit
IoT: Field Service Opportunities
– One TSIA member
time and reduced
hands-on labor costs
– Spare part orders
dispatched to field with
repair instructions with
• Services Revenue
– 70% of field service
organizations offer a
– “One throat to choke”
popular upsell option
for tech buyers
Preparing for the Internet of
Things In Field Service
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