Social, Media,

Analytics, Cloud (SMAC)

Nextgen Technologies Transforming
OEM’s Aftermarket Services
Overview

For the better part of a decade, manufacturers have continually

operated in a highly challenging and evolving economic and business
environment.
Since the 2008-09 global downturn, there has been
an ever increasing pressure from private equity firms Social Mobile
and stockholders on one end, and users and
consumers on the other end for the manufacturer to:

Manage and reduce costs

Business
Disrupt the traditional operational model
Advantage
Reinvent themselves towards better growth and
profitability

Given the industry’s overall outlook and the need to

improve their profit margins through services,
Analytics Cloud
original equipment manufacturers (OEMs) worldwide
have increasingly shifted their business away from
simply designing and selling products and spare maximizing company profitability.
parts to providing complete aftermarket services and
value-added support. This puts significant pressure on service
organizations to keep customers happy and ensure
Aftermarket services help counter the cyclical they get maximum value from the products they buy.
demand for equipment and the volatility resulting But the question is, how well prepared are OEMs to
from a tough macroeconomic environment. Hence, reap this opportunity in the services space?
winning market share in this area is essential to

This whitepaper discusses the challenges manufacturers face and the approaches they could
take to leverage technology, data, and processes in transforming their organizations to stay competitive and
profitable in the future.

OEM Aftermarket Aervice Organization Challenges

What Are They Facing?
Equipment manufacturers face significant ongoing challenges in their ability to reap the benefits of
strong aftermarket services.

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Moving Away From A Product Centric Identity
For decades, successful manufacturers have relied upon product focused strategies that have been traditionally
responsible for their strong market positions.

They have continually and heavily invested in Customer Share

Services Provided
entrenched cultures and processes revolving around
products maintaining their competitive advantage.
This identity behavior results in an internal

Customer Centric
competition for resources between products and
services when the organization is moving towards a
Product Centric
new strategy. It is critical for companies to overcome
these cultural and identity issues to continue to stay
profitable during economic downturns. Market share

Traditionally businesses have focused strategically on

strengthening their identity as a product developer, Customers Contacted
rather than service provider, which limits the
internally deployed resources. When operating under Example:
a constrained budget, resources tend to be In the case of conflicting demands from product
introduced towards product innovation rather than development and service organizations, a product
strengthening service organizations. Websites and development organization could be prioritized over a
marketing material could be more product focused service organization when scheduling to meet
and would not focus on service capabilities. demand for parts that are manufactured in-house.

Reactive Mindset Towards Services

Traditional cultural problems transcend into the service organization as well.

Servicing a product more often has been perceived as the cost of doing business rather than apositive revenue
generating opportunity. Historically, companies have reacted to a service demandonly after a failure point in the
product’s use. Since service organizations are not geared to minimizesuch impact to customers, this has
resulted in prolonged downtime for their organizations.

Service organizations have traditionally operated

more as a cost center than a profit center and
typically operate under tighter budgetary constraints.
With such constraints, being reactive is the only
possible way to serve customers. Historically,
companies which are identified as best service
providers have been the ones which had better
reaction times.

This reactive mindset is so entrenched that competitive advantages for service organizations has traditionally
been based on quality reaction based parameters rather than proactive approaches. Even when preemptive
maintenance or scheduled maintenance was employed, it was just a tool to preempt longer reaction times.

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Thinking of a market strategy beyond reacting to a situation only after the fact has always been challenging. In
addition, Field Service personnel tend to be highly resistant to change resulting in organizational challenges in
implementing proactive service models and technology platforms geared towards enhancing the customer
experience.

Legacy Technology Stacks

Aftermarket service organizations typically use other resources within a company like marketing, IT,
purchasing and manufacturing, etc. Traditionally, companies have relied on an ERP MRO functionality to
manage service processes. However, most often legacy technology stacks are not geared towards effective data
and process integration across these areas. Apart from such internal processes there are external process and
data points that continue to be invisible to an aftermarket organization.

Example: as significant customization of such legacy systems

Companies lack visibility to their product health, would have to be employed to meet specific needs
specific maintenance, or spare parts requirements for for service organizations.
their products out in the field. Legacy technology
stacks do not have the ability to change this Most often companies tend to have a lack of in-house
perspective. expertise in the latest technologies like Cloud, Big
Data, Mobility and IoT to be able to move towards an
Such challenges lead to manufacturers focusing on updated technology stack. With an absence of a
accurate parts supply as a goal leading to technology stack to enable a connected platform,
underutilization of available technology stacks in the companies find it challenging to transform to a new
market. However, this results in additional challenges business model.

Accurate Data and Relevant Information

Quality of service (QoS) and support information is key to the success of any aftermarket organization, reactive
or proactive.

The inability to accessing key information often prevents organizations from being effective. While there has
been substantial focus for improved supply chain processes and proactive solutions, companies have often
failed to recognize and find a suitable solution for their data problems.

Challenges vary from:

Lack of visibility

Lack of resources to manage data

IT systems and integration, and

Differencing data formats, sources and owners etc.

Challenges to accurate information affects

aftermarket organizations in all of their business
areas -customer facing or otherwise.

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Example
A basic function of finding the right part for the right customers have multiple purchasing locations or
customer with the right pricing might itself become organizations, identifying the customer can prove
a challenge. As is often the case, when large challenging.

Unknown information regarding install base or product population in the field could affect forecasting. It could
also affect effective strategy

Blueprint for Action

Cultural change towards a service oriented mindset is a long-term goal. The adoption of next generation
technology acts as the catalyst for achieving this. It also helps mitigate capability gaps and introduces high
performance levels.

Today, the most important differentiator for OEMs to note for such technology to succeed, a complete
looking to succeed with their aftermarket service process integration of planning, execution, and
offerings is providing best-in-class interaction with fulfillment of part and service orders is essential.
customers. This requires instant access to relevant
information – anywhere and anytime — a new The other aspects brought in by next generation
best-of-breed technology to support such technologies is predictive analysis. To consistently
experiences. achieve high levels of quality and efficiency,
manufacturers need to maintain maximum uptime
Use of such technology should essentially meet the of their equipment. Forward thinking organizations
following goals: are utilizing predictive analysis software to convert
massive amounts of data gathered from their
products, sensors, and internal systems such as ERP,
Improve equipment uptime and performance
CRM and other business applications into actionable
Increase productivity of maintenance personnel information. This helps manufacturers foresee
and service organizations equipment failures leading to unplanned losses. Such
Provide real-time information regarding service maintenance strategies result in considerable
operations value add to customers.

It is no surprise such next generation technology is

Today, manufacturers are adopting the SMAC (Social,
gaining prominence for companies serious about
Mobile, Analytics and Cloud) stack to meet their
their aftermarket service strategy. The demands of
needs. These technologies provide maintenance
the industry are resulting in manufacturers adopting
personnel instant access to equipment data, work
innovative technology to bring in positive, disruptive
orders and materials; thus eliminating manual
changes. Manufacturers are leveraging new
processes and errors.
technologies and working with specialized
consulting companies, like ThoughtFocus, to identify
By adopting SMAC technology OEMs gain real-time
customer value propositions, address their specific
insights into customer information and equipment
needs, and enhance the experience.
status, enabling them to respond faster with
improved service levels. Adopting new mobile
These next generation technologies are helping
visualization technologies help OEMs support
manufacturers remain agile and competitive in
workers with real-time, contextual data leveraging
today’s volatile marketplace.
the latest advances in 3D visualization. It is important

www.thoughtfocus.com betterfuturefaster@thoughtfocus.com
ThoughtFocus helps forward-looking companies and organizations in the financial services,
manufacturing, and higher education/public services sectors innovate and achieve a better future
faster. ThoughtFocus’ innovative and cutting-edge technology solutions enable its customers to
deploy new capabilities faster, deliver better user experiences, and drive operating efficiencies. We
do this through executional excellence and mitigating the risk of change. With headquarters in the
U.S., the Company has more than 2,100 employees in locations spread across five countries.

For more information, please visit the company website www.thoughtfocus.com.

www.thoughtfocus.com betterfuturefaster@thoughtfocus.com