The growing trend of digital transformation is having a huge impact on the way traditional product and service-based businesses are run. But, there are many details within this broader concept that deserve a closer look, particularly its effect on current business models, training processes for field technicians and other staff, and delivering outcomes to customers. To provide an inside look at some of the more critical elements of the digital transformation journey, TSIA and Librestream have partnered to create a two-part blog series all about how to digitally transform your services business.

To get an inside look at how digital transformation is impacting traditional business models in both product and service-based organizations, I spoke with Jereme Pitts, the chief operating officer at Librestream, the leader in developing innovative mobile video collaboration solutions for field services, manufacturing, energy, and the public sector. In this interview, he shares his perspective of digital transformation, how it’s impacting technology and equipment companies, and offers his advice to traditional businesses looking to take on this transformation, both for their benefit and that of their customers. 

Q: In your own words, what does the phrase “digital transformation” mean?

Jereme: “Digital transformation” is a title that is being used to describe a lot of different factors that are ultimately changing the way people work. The increasing trend of customers wanting to pay only for what they consume rather than the large, up-front investments in tech is pushing the need for technology companies to make mandatory changes in how they run their businesses. But, making this transformation in order to stay relevant and become part of the larger solution requires putting some real thought around how this will fit into your company’s current workflow. Digital transformation isn’t without its challenges, but there’s also a lot of success to be had by companies who are able to successfully harness it.  

Q: How is digital transformation impacting technology companies?

Jereme: When it comes to the impact of digital transformation on the technology industry, there are two things in particular that stand out to me, the first of which is about improving the way companies get new talent up to speed. No matter what industry you’re in, there’s a challenge of acquiring new, skilled labor as our current (and also largest) talent pool begins to hit retirement age. The problem lies in capturing the knowledge and expertise of these skilled workers so they can pass it along to the next generation of talent. The idea of digital transformation means creating a real-world knowledge base that collects this deep-rooted knowledge of the products, how they work, and how to fix them that new employees can reference, allowing them to quickly ramp up to speed and successfully serve their customers. 

No matter what industry you’re in, there’s a challenge of acquiring new, skilled labor as our current (and also largest) talent pool begins to hit retirement age.

The second is about reducing customer downtime. In the past, service organizations had planned downtime, which meant that a customer wouldn’t be operational for a set period of time while maintenance was being performed. Now, there’s this growing demand from customers for problems to be fixed “now” rather than coordinating planned outages.

So, when something breaks and you need to fix it, how do you make sure you have the right person and materials for the job, and that it can be done quickly and effectively the first time, eliminating the need for the technician to go back onsite, possibly leading to more downtime? By anticipating break/fix cycles, remotely tracking equipment performance, and having a digital profile of the equipment’s needs and parts at the ready, digital transformation can save downtime with the help of smart, connected products, and the Internet of Things.

Essentially, meeting changing customer demands and better preparing their employees is where technology companies are getting the biggest “bang for their buck” when it comes to digital transformation.

Q: What role does the Internet of Things (IoT) play in digital transformation?

Jereme: This is something that a lot of people in the industry have struggled with, because initially, the promise of the Internet of Things seemed to focus primarily on how machines would be able to “talk” with one another in order to self-heal and calibrate within an overall system. While this is indeed part of that promise, technology customers are finding that the most important aspect of it is about bridging the gap between the people, the things (or products), and the process in the life cycle of those products. 

A few years ago, I had the privilege of hearing the former executive chairman and CEO of Cisco Systems, John T. Chambers, speak at an event, and he said something that really resonated with me. He said that as he travels around, he gets access to the senior executives of the top companies in the world, and that they’re all saying how IoT is the number one most important thing they can do for their organization going forward. He followed that up by saying that of that astounding number who agreed, only 10% were actually thinking about how they can implement it. That is a phenomenon I’ve encountered as well, that there’s a big gap between what people want to do and what’s actually happening. 

So, taking the idea of bridging the gap of connecting people with the process and with the equipment, even if it’s halfway around the world, the Internet of Things is what takes some of the daunting aspects out of this issue, solves the problem, saves money, and gets things back up and operating even faster than before.

Q: What is driving customers to adopt IoT, and how are these technologies impacting business models? 

Jereme: Business models overall are changing at a rate that neither I nor our customers have ever seen before. Based on the hundreds of conversations we’ve had with our customers and at events, there are two recurring themes that I see over and over again, regardless of whether their business model is service-based or product-based. 

The first is that, when an organization builds a product, they have a very large service-based business around that product in the form of contracts with various terms. That’s always how it has been; sell more units, get more service contracts. But lately, customers are no longer signing on for service contracts and want to just pay fair rates for only what they use. On top of that, customers want a guarantee that they can achieve specific outcomes with their investment.

This pressure is what’s causing these new business models to emerge, meaning that suppliers must now position themselves to service their customers faster, more efficiently, more effectively, and also prove the outcome. To prove the delivery of that outcome is on track for the customer, product data needs to be captured, monitored, and analyzed, which is where the Internet of Things and smart, connected products comes in.

Business models overall are changing at a rate that neither I nor our customers have ever seen before.

The second theme involves what I mentioned earlier about skilled workers and the looming talent pool crisis. We’ve seen a lot of companies putting their head in the sand trying to use technology to drive more efficiency, figuring that where they’ve previously needed 10 people but can only find 7 that are qualified, they’ll just fill the gap in the interim with technology as people begin to retire.

The problem is that while they might have the tech, they’re lacking the processes or deep-rooted know-how that their workforce has been able to learn and collect over the years, and they have no way to archive that knowledge and train people on it. This again goes back to what I said about using IoT to connect people with the process and the equipment, but also use this technology to capture this “living knowledge base” of valuable information.

For example, if you take a level 4 technician and have them look over the shoulder of a level 1 technician as they examine performance data collected by the smart technology, the experienced technician can then explain how to read that data in the context of their deeper, hands-on knowledge of issues they’ve previously encountered in the field. This allows a better connection between product data and human know-how that can be included as part of the training process for new-hires. The ROI that people are getting from bridging that talent gap through IoT is a massive driver for this transformation.

Q: What challenges are customers facing when attempting to adopt these new technologies?

Jereme: While a lot of people will say that the number one challenge is about security, I’m going to talk about a couple of things that don’t tend to get touched on much when people talk about IoT.

There is a general fear in many companies that new tech that is designed to make the lives of the workers easier will eventually replace the workers, and that simply isn’t true. The data that staff can gather from the equipment will allow them to get insight into its performance they couldn’t previously access, enabling them to make decisions they couldn’t make before, bridging the gap between the people and the things they’re servicing. 

Another challenge I see is in how well workers are able to adopt these new technologies in a way that ensures that it’s working for them and bringing them the level of efficiency they’re expecting. Adopting this tech can be difficult, but with help, it’s possible. In fact, Librestream has created an entire division just about adopting these new, disruptive technologies, and even have an entire professional services group dedicated to doing just that. The reality is that even if you’re jumping on the bandwagon to adapt to these changes but aren’t successfully adopting this new technology, it’s all for naught. That’s why we’re so dedicated to making sure these companies are comfortable using these new solutions and have successfully implemented them into their workflows.

The data that staff can gather from the equipment will allow them to get insight into its performance they couldn’t previously access, enabling them to make decisions they couldn’t make before, bridging the gap between the people and the things they’re servicing.

Q: What is some advice you would give to companies that sell hardware about how to navigate the digital transformation journey?

Jereme: My main piece of advice goes back to that John Chambers comment about people talking about implementing these technologies but only a small portion actually doing something about it. My advice would be to “just start” but not to worry about boiling the ocean and getting everything implemented and perfect right out of the gate. The little you’re able to do is still likely to make a percentage of difference to your bottom line, and you can always tackle bigger problems once you get everyone within your organization on the same page and settled into the process. I’ve seen this idea that digital transformation is an “all or nothing” affair cause a lot of decision paralysis for a lot of mid and senior-level managers, and I hope I can ease some minds by saying that simply isn’t the case. 

I’ve seen smaller companies, who have taken a “what do we have to lose?” approach to transformation, who have really pushed the limits of getting technology to work for their business and have seen some great success. Meanwhile, their larger competitors don’t see the same advance rate because there’s a fear of needing to be perfect. 

Across the industry, change is happening, and companies are ready to get started on their digital transformation right now. They’re acquiring tech, they’re thinking about larger deployments, and they’re accomplishing things at a rate that we’ve never seen before, even in just the past 6 months. It’s been wonderful to see these companies getting over the fear of starting by just going for it and seeing great results.

Next: Learn How to Monetize Services with IoT

Thanks for your time, Jereme! You can learn more about how Jereme and Librestream are helping companies implement and successfully adopt these new, disruptive technologies by visiting librestream.com or by watching their recent webinar on IoT. Be sure to read the second part of this “The Role of Digital Transformation within Services” blog series, where Librestream interviews TSIA’s vice president of field services and IoT research, Vele Galovski, as he explains the role IoT plays in creating outcome-based offers as part of your company’s broader digital transformation journey.

 
 
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