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Cracking the code on manufacturers’ connected-services mandate

Nov. 23, 2020

"It’s easy for those with little coding experience (citizen developers) to connect legacy and new business processes."

Pegasystems' Steven Silver

The seemingly endless global COVID-19 pandemic continues to impact manufacturers everywhere. Demand for products has ebbed and flowed over the past nine months but has unmistakably impacted original equipment manufacturers (OEMs) as so many customers have cut or deferred spending. Additionally, margin pressure has increased, given the cost to implement new safety protocols, rapidly find alternate suppliers, or operate with reduced staff. And with production down compared to before the pandemic, a majority of manufacturers have not been able to produce at peak efficiency given the strain on their operations. 

If only the challenges stopped there.

COVID’s impact has also coincided with the emerging business model shift of manufacturing customers seeking to purchase new services often in lieu of finished IoT-connected products; for instance, mobility services instead of buying a car; power-by-the-hour (PBH) leasing instead of purchasing jet engines, or investing in as-a-service software subscriptions in the cloud instead of the software itself. Some savvy producers are even experimenting with higher-margin information services bundled with and powered by their connected products to help customers improve their outcomes that products help deliver.

In the face of all this disruption, automotive, industrial equipment, high-tech, medical device, consumer packaged goods (CPG), and other discrete manufacturers are trying to maintain a steady cash flow while continuing to deliver for customers and preparing for an uncertain future. That’s why, despite these headwinds, it’s imperative manufacturers continue to invest in augmenting their new product or equipment sales with connected aftermarket or aftersales solutions that typically yield more than 2.5 times the profits on products, improve  customer experience, and future-proof their businesses.

Zooming in on connected services

Over the past decade, manufacturers have made massive investments in digitally instrumenting their products and the factories that produced them, often searching in vain for IoT-powered use cases that would create value and return on investment. Despite ubiquitous product connectivity, OEMs have yet to supercharge margins by meeting the obligation to add value for customers who expect product connectivity to be more than a gimmick. Instead, too many OEMs are drowning in volumes of connected-product data that languishes in cloud repositories, without an ability to turn it into meaningful insights and action.

Instead, having already invested in real-time monitoring, data analytics, and massive aftersales operations, manufacturers must now focus on delivering advanced connected outcomes. It’s time for them to transform into true solution (or, “as-a-service") providers with actions that improve business outcomes such as higher product uptime, increased ancillary service opportunities, exceptional experiences, and greater customer satisfaction. They can do this by pairing connected products, services, and information with enterprise capabilities that digitally engage and execute work—actions and interactions—across any operational, technical or even mobile boundaries at industrial scale.

For manufacturers, capitalizing on the connected-aftermarket-services mandate is no longer just about how well they sell parts, provide customer service, address warranty and recall events, or deliver prescriptive or predictive customer and machine service as stand-alone activities. They must raise their game to create and extract added value, like the ability to balance warranty costs and product uptime by optimizing interdependent customer journeys and processes collectively instead of independently, often in near real time. 

Despite this, protecting and enhancing investments in aftersales and connected-services capabilities has often suffered from the dual curses of complexity and cost. Many have found it too difficult and costly to combine disparate connected-legacy systems, products, processes, interactions resources, and data into unified, commercially viable capabilities. 

Until now.

Crush complexity with proactive connected aftermarket solutions 

Today’s innovations in intelligent automation, customer service, and 1:1 customer-engagement capabilities unified in low-code platforms mean OEMs no longer need to wait for scarce but skilled human resources to heroically but manually engage with customers, dealers and other experts. They can leverage these capabilities to prevent product failures, maintain a massive global ecosystem of connected products and customers, and reduce customer defections, while seeking to grow customer lifetime value through traditional and new service offerings. And OEMs no longer have to invest in costly, years-long initiatives to replace legacy applications and systems of record that constrain their ability to quickly adapt for this services mandate.

With the emergence of low-code capabilities that deliver industrial strength, it’s easy for those with little to no coding experience (citizen developers) to connect various legacy and new business processes, touchpoints, systems, and data to address urgent needs and opportunities proactively and prescriptively while making sure customers are effectively cared for, product uptime is protected, and new revenue-generating services can be delivered. 

By leveraging a low-code platform and combining intelligent automation and customer-service capabilities that augment and extend their existing investments, manufacturers can solve a range of issues and create quick wins in areas like aftersales processes, information and service providers, customer service, cross-sell/up-sell, preventative maintenance, and warranty/recall. 

These interdependent processes—usually trapped in individual legacy applications or systems of record—are no longer so difficult to adapt and scale to the urgent operating demands of the next normal when they are enhanced by a unified intelligent automation platform “agility layer” that rapidly connects and orchestrates disconnected people, processes, and technology to unlock value. Now, OEMs can say goodbye to days and delays in the connected customer and product status quo that have meant lost revenues, increased costs, and diminished margins. 

Get out of neutral, the ditch, and the endless road of code

Manufacturers can’t sit around and do nothing. They can’t spend limited resources on big transformational programs. And they can’t keep requiring developers to write tens of thousands of new lines of code to address every independent issue. They need a new approach.

The connected-service mandate in a post-COVID normal dictates that OEMs use their pervasive product connectivity to generate more customer value while crushing operational complexity. In taking on this obligation, manufacturers realize even more opportunity. It allows them to be proactive and prescriptive in delivering a personalized level of service to each customer, the products they own and use, and services they consume—all without breaking an already disrupted business or a strained bottom line. With the right low-code platform foundation, manufacturers can finally turn connected customer and product insights into actions and profits.

Steven P. Silver is Pegasystems vice president of manufacturing, automotive & high-tech