Smart wireless services: 5 reasons

Below are five reasons one company thinks makers of automation, instruments, and controls, their customers, and system integrators, are “looking beyond product-based sales alone for differentiation, profit margin, and growth.” That’s according to a just-released nPhase white paper: “The Art of Smart Services: Building the Business Case.”
By Control Engineering Staff September 6, 2007

San Diego, CA —Below are five reasons one company thinks makers of automation, instruments, and controls, their customers, and system integrators, are “looking beyond product-based sales alone for differentiation, profit margin, and growth.” That’s according to a just-released

nPhase

white paper: “

The Art of Smart Services: Building the Business Case

.”

nPhase, a Qualcomm business, helps original equipment manufacturers (OEMs) and their service network partners achieve greater in service performance, product performance, competitive advantage, customer value, and financial performance, offering wireless products and services.

Aftermarket product service, fueled by demand from asset owner/operators requiring unprecedented levels of asset uptime, reliability, availability, and output; and on the supply side by manufacturers facing increasing commoditization and competition on the product side of their businesses, nPhase says. The result is that best-in-class OEMs like ABB, John Deere, Gardner Denver, Siemens, and others are developing new revenue streams derived from post-sales service offerings, and are strengthening their brand image based on customer service and satisfaction, according to the report’s executive summary.

OEMs that manufacture everything from jet engines to photocopiers are thinking and acting more strategically about product quality and performance over the entire product lifecycle, nPhase says; leading manufacturers derive more than 50% of their revenues and 60% of their margin contributions from services as opposed to product sales, according to the Harvard Business Review.

An OEM’s capability to offer lifecycle service contracts, predictive and preemptive maintenance, and premium service levels can make the difference between a customer-for-life and a lost deal, nPhase says. “Smart Services” are poised to transform the product value chain just as monumentally and irrevocably as the Internet did to commerce.

OEMs that have adopted Smart Services typically report financial returns in five main areas, according to nPhase:
1. Service cost savings;
2. Improved cash position;
3. Service-native revenue growth;
4. Service-driven product revenue growth; and
5. Overall profitability.

Areas of improvement include services, products, customer value, and competitive advantage, nPhase says; “when manufacturers capitalize on the cumulative effect of excelling in all four areas, true business transformation can occur.”

For a related article from Control Engineering , read:

Healthy Machines: Use diagnostics and analysis tools to help keep equipment well and operating at peak performance

.

—Edited by

Mark T. Hoske, editor in chief,

Control Engineering
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