According to IDC Manufacturing Insights, connected products are not only top of mind but proliferating across manufacturing segments.
As manufacturers move down the path toward creating products that have inherent connectivity to support added functionality, they also open up the possibility for many new types of aftermarket opportunities, what IDC refers to as connected services.
The report, IDC PeerScape: Manufacturing Practices to Launch a Successful Connected Service Initiatives, presents five best practices culled from research and conversations with manufacturers in the past year. It indicates manufacturers are increasingly turning to services as a means to improve profits, increase customer satisfaction, and differentiate from competitors. Connected services leverage connected products to unlock the data-captured insights coming off the products.
According to the new report:
– By 2020, onboard service revenue will grow at double the pace of product-related revenue.
– It is no longer a question of whether manufacturers need to offer connected services but what services they should offer and how quickly they can launch them.
– Connected services will redefine the manufacturer’s role and cumulative value throughout the customer life cycle.
According to the report, to date, many of the plans for connected service are in the ideation/development phase because of the significant amount of change required in processes, functional alignment, and technology to support a comprehensive connected service operation. Early adopters have been successful in launching some of the less disruptive connected services such as product monitoring and are using these as test beds for more complex initiatives.