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Onsite deployments of field personnel are highly restricted for equipment and device manufacturers as a result of the COVID-19 crisis. Oftentimes, remote support is the only way to help customers and, increasingly, customer support is provided by a virtual organization. 

We now find ourselves in an environment where customers are more accepting of remote connections of their equipment and the use of cloud services to replace onsite deployments for break-fix and maintenance services. These significant shifts in the customer relationship will stay in place well beyond the crisis and are accelerating the digital transformation of vendors and customers.

The State of Services for OEMs Before the Crisis

When we analyze the changes brought on by the pandemic, it’s critical to be aware of the existing trends and the state of services in industrial equipment before the crisis:

  • Commoditization of feature functionality is creating the expectation that vendors must increase their role in helping customers achieve their business outcome. 
  • Further penetration of smart, connected products with a shift in the value proposition toward digital services.
  • Continued pressure on product revenue and margin.
  • Product-attached services, like break-fix services, onsite maintenance, training and consulting are major revenue streams.
  • Privacy and security concerns were a major obstacle to enable a remote connection with vendors and to accept cloud services.

Crisis Response

In response to the crisis, social distancing initiatives to protect both vendor and customer workforces resulted in a significant impact to traditional product-attached services. A TSIA Rapid Research Response poll identified that:

  • 55% of respondents have experienced a decrease in total technology bookings.
  • 73% have experienced a decrease in onsite service bookings.
  • Only 31% experienced reduced shrinking remote service revenues.
Bookings forecast chart

Support Organizations Went “Virtual” Successfully

With the outbreak of the pandemic, support organizations acted fast and enabled most of their staff to work from home with virtual presence tools, including video conferencing and augmented reality. And they did it well.

Support organizations were well prepared for the shift to a virtual organization with remote service delivery and software provisioning through the cloud. 94% of Rapid Research Response poll respondents reported no impact or only a slight impact on their customer support.

Impact of remote work on customers chart

And more importantly, customer satisfaction remained the same during the transition to a virtual organization and an incredible 33% reported increased satisfaction.

CSAT during COVID-19 chart

Some TSIA members may even achieve their highest CSAT scores ever during the pandemic.

Improved Remote Service Capabilities

It has been said that necessity is the mother of invention. Clearly, the restriction of onsite deployments and work from home policies created an opening for remote services as a way to support customers. Customers who had previously not allowed connectivity of their equipment have suddenly become open to allowing external access by the OEM’s support team.

This exposed a pre-crisis weak point of many equipment manufacturers – the lack of install base connectivity. Another Rapid Research Response poll confirmed that 8 of 10 manufacturers had less than 50% of their installed base connected. Further, 36% of respondents reported that less than 10% incidents were resolved through remote connectivity.

Install base connectivity chart

The combination of a long equipment lifecycle and devices without sensors and connectivity, and the pre-crisis hesitations of customers to get connected and to use remote support and capabilities led to this. Connecting equipment creates a massive potential for further improvements in service efficiency and helping customers to increase their outcome by ensuring higher asset availability.

In the early stages of the crisis, manufacturers experienced a remarkable increase in demand for remote capabilities. 60% of poll respondents increased the use of virtual interactive presence tools, and 47% saw an increase in the use of embedded diagnostics to resolve break-fix incidents within three months. 

Remote capabilities chart

When a return of the staff to the offices is possible again, the customers’ organization will stay more virtual than in the past. Additionally, international and domestic travel will remain limited for the months to come, which will keep the demand for remote services at elevated levels. This means these two game-changers will be with us for the foreseeable future!

Manage the Ramp-up and Prepare For the New Normal

As we start to prepare for a post-pandemic world, service organizations will need to address the following challenges: 

  • Managing the regulations for workforce protection globally.
  • Using the momentum to create compelling remote service offers.
  • Driving the digital transformation to deliver excellent digital services for smart, connected devices for virtual organizations.

In this environment, TSIA recommends the following to leverage the momentum to push the digital transformation.

  1. Finish the experimental phase to help customers with all kinds of virtual tools and build a virtual customer experience. Use the tool of your choice for virtual assistance, connect it with your remote-control system, and integrate it into your processes and your whole ecosystem. Offer the opportunity to connect with the installed base easily in case of a break-fix incident and to collect the required data. 
  2. To build trust, the customer needs to have full control over the data transfer and full transparency in which data is shared. If they have a great experience with your remote support, customers will become more open to learning about further remote capabilities, including condition monitoring and predictive and prescriptive maintenance. 
  3. Offer premium contracts, which include sophisticated remote capabilities. Premium contracts support predictive maintenance for the equipment, prevent unplanned downtime, and reduce break-fix incidents with low profitability.
  4. Offer IoT and digitally-enabled cloud services like asset and operations management. These as-a-Service offers will pave the way for more Tech-as-a-Service offers and the digital transformation of your offers.
  5. Have a clear strategy to monetize your remote and digital services value-based.

When you do not own these capabilities yet, get connected with as many customers as possible, and start collecting data. Your short-term profit will be higher service efficiency and higher CSAT. Longterm, you’ll build a database for analytic capabilities to leverage machine learning to predict failures and to learn from the behavior of your equipment and the users in the field.

As customers get more familiar with remote and cloud services, they will become accustomed to having them and will want them moving forward. Little by little, customers will begin to accept more intensive and intimate connections.

That’s why it is my belief that COVID-19 will be recognized as a catalyst that accelerated the digital transformation.

TSIA is Here for You

We understand that our member companies, the technology industry, and the world at large have been impacted by COVID-19. Whether you are prepared for Revving or Retooling, now, more than ever, we need to work together to get through these challenging times. TSIA is committed to providing visibility as quickly as possible into the changing industry trends and practices that come as a result of COVID-19. Visit our Rapid Research Response Initiative resource page for more information.

If you have any questions related to how COVID-19 is impacting your organization, we’re here to help.

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Harald Kopp

About Author Harald Kopp

Professor Harald Kopp is the director of industrial services research for TSIA. He also teaches an MBA program for sales and service engineering at Furtwangen University, Germany. In his role at TSIA, he is responsible for the further development and enhancement of TSIA’s research agenda, according to the needs of businesses in the EMEA region and for industrial equipment manufacturers. His focus is chiefly on services in industrial automation, equipment, instruments and technology companies. Harald has 25+ years of accomplished experience in the areas of supply chain management, IT consulting, and industrial services.

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