The 2013 IFS World Conference was a fantastic event, during which a number of future trends and challenges for service providers were discussed at length. Here are my thoughts on three sessions I found particularly fascinating.
The Perfect Storm of Change & the Internet of Things
One of the conference themes (as relayed in this presentation by Microsoft’s Mike Opal) was the “Perfect Storm of Change” currently being experienced in technology. The most pertinent element here for companies in the field service management and industrial services business is undoubtedly the emergence of the “Internet of Things.” For many years, industrial service providers have taken advantage of machine-to-machine technology using existing (but in some cases archaic) standards such as the OPC open productivity and connectivity standard within production environments, supervisory control and data acquisition (SCADA) in utilities and simple network management protocol (SNMP) in information technology. The Internet of Things, for the first time, opens the door for integration of virtually any device, be it in the industrial or consumer realm. Service providers have long realized that the most expensive part of service delivery is the service engineer him or herself, and through smarter, automated diagnostics, better remote management and continual monitoring, the Internet of Things could revolutionize service delivery. This will allow service engineers to focus on calls where they are really needed and add real value to both customers and their organization.
Another theme widely discussed was the move towards outcome-driven business. A machine manufacture will no longer sell a machine with a warranty and maybe a service contract, but instead contract to provide an outcome for the customer. There are examples of this approach already with healthcare equipment providers contracting manufacturers of equipment such as MRI scanners to provide enough uptime for them to be able to bill a set number of scans per year. In defence, performance-based logistics (PBL) contracts that guarantee uptime and availability have become the norm. This approach will only increase as more and more manufacturers look to delivering outcomes in order to grow margins through end-to-end delivery. And this will in turn place demands upon enterprise resource planning (ERP) and other business software, driving a trend towards more project-based ERP.
The Race to the Bottom Benefits No-One
Ray Wang’s enthusiastic and engaging keynote session talked about society’s obsession with price as the deciding factor when selecting products or services. For many years, service providers have worked tirelessly to differentiate themselves on other key metrics; response times, warranty provision, ease of interaction, inclusive management information. This “race to the bottom” ultimately benefits no-one. Partnership is the key to effective service delivery and all parties need to work together across the value chain to realize the benefits associated with long term working relationships.
As Barcelona begins to fade into a distant memory the IFS community begins planning for what, I’m sure, will be an amazing event in Boston, Mass. next year. Join us there to track the progressing impact of these trends and discuss the next opportunities on the horizon.