Business Case Framework
- Service cost savings
- Improved cash position
- Service-native revenue growth
- Service-driven product revenue growth
- Overall profitability
The means for achieving these financial ends can be classified into four foundational areas of improvement - Service Performance, Product Performance, Customer Value, and Competitive Advantage - otherwise known as the Smart Services Value BladesTM.
Each individual blade can drive financial performance improvements on its own. But when manufacturers capitalize on the cumulative effect of excelling in all four areas, true business transformation can occur.
Blade 1: Service Performance
Coupled with savings resulting from product recall reductions, SLA non-compliance penalty avoidance, and in-warranty repair cutbacks, savings from field service dispatch reduction can frequently make the case for an initial-phase deployment of Smart Services.
Blade 2: Product Performance
Smart Services solutions can unlock critical data about product design and performance that can equip engineering teams with the insights they need to improve subsequent versions of a product. With this kind of asset data accruing continuously over time, a manufacturer can dramatically reduce warranty costs and product recalls and ultimately retain a larger share of its customer base.
Blade 3: Customer Value
With Qualcomm's Smart Services solutions, our knowledge experts and field service personnel will always have access to the vital information they need, no matter where they are located. Equipped with this information, we expect to assume more accountability in our business transaction, improving safety and minimizing downtime.
- AMETEK SolidstateControls SCI
The absence of customer value would actually negate the viability of the other three blades of value. If the asset owner/operator does not see value in a Smart Services offering, the approach will not be sustainable. Three places for an OEM to start demonstrating the business impact of Smart Services on their customers are Total Cost of Asset Ownership, Return on Assets (RoA), and Total Revenues.
Blade 4: Competitive Advantage
Industry studies have shown that OEMs with Smart Services offerings are four times as likely as those without to achieve asset uptimes of greater than 95% and three times as likely to achieve service contract compliance greater than 91%. In markets where products are approaching commodity status, margins are slim, and competition is fierce, this kind of differentiated performance can provide an OEM the edge it needs to maintain or capture the lead in the market penetration of its products.
