The State of Predictive Maintenance Programs - Value, Hype and Reality

Read the Service Council´s Research Insight on the Journey to Predictive Service

Predictive maintenance and service strategies are often cited as the reasons for implementing an IoT strategy, and industrial manufacturers are committing to using data and progressing to predictive strategies and analytic methodologies.  However, execution has delivered mixed results with patchwork approaches in play. 

John Carroll, CEO & Founder of the Service council speaks with Chris MacDonald about the state of market execution and adoption, whether predictive programs are meeting expectations, and how a proactive analytics journey can get back on track.

Transcript

Host: 0:00

Welcome to speaking of service, the podcast that uncovers practical ways to grow service revenue control costs and improve customer satisfaction. If you're looking to innovate, gain a competitive edge, or just learn about the latest service trends, you've come to the right place. In today's episode, Chris McDonald, head of AI and analytics. Sits down with John Carroll, CEO and founder of the service council to discuss the state of market execution and adoption, whether predictive programs are meeting expectations and how our proactive analytics journey can get back on track.

Chris MacDonald: 0:32

Welcome to the show today. We're gonna talk about implementing predictive maintenance to drive a service strategy. At this point in market maturity, most companies are gathering a lot of data about their products, their devices, their process. But they often don't know how to turn that data into a proactive service approach. And in fact, there's been a lot of excitement, a lot of good intentions about the promise of predictive service and what it means for service organizations. But oftentimes we find that companies have a somewhat, uh, good approach or a siloed approach, but the full cohesive enterprise value, um, in terms of truly transforming. Through a proactive approach is not quite realized today. I'm excited to be joined by John Carroll, the founder and CEO of the service council. He's gonna share a little bit about some research they've done around these findings, what they're seeing in market, what companies are experiencing, uh, in terms of their predicted maintenance success and programs. John, welcome to the show. Um, looking forward to hearing from you, please introduce yourself and tell us a little bit about the research that your group is.

John Carroll: 1:44

Chris, thank you so much for the warm introduction and, and the warm welcome. And thank you to PTC for welcoming me to the podcast. Uh, the service, council's a Boston based research analyst firm and, and our focus is really on the post sales customer experience. Uh, we look at service design, uh, in terms of strategy. We look at service execution in terms of delivery. We've conducted several hundred benchmark studies over the last several years. Um, and there are four major pillars that we conduct on an annualized basis. The service leaders agenda the voice of the field service engineer. We look at KPIs and metrics, and then we look at digital transformation. So people leadership and frontline, uh, metrics, data, and, and lastly technology. Um, there are four major transformations that we're monitoring, right. At the customer level, consumerization is continuing to drive up expectations at the customer, even in a B2B setting. So we're seeing the translation of the consumer experience, uh, being an expected delivery methodology in a business setting, uh, and that's driving up, uh, a greater requirement on the demands of service providers to be more efficient and effective in service. the other thing that we're looking at from a customer perspective is the, the need for it to be, um, quickly delivered immediate predictive in its approach and, and to provide agility. So where a, a customer experience might start on a channel such as email or social media, it may quickly transition to something else such as a voice live agent through tech support contact center, and then eventually, uh, a, a dispatch scenario where a field technician might. So at the customer level, we're seeing a, a tremendous amount of evolution. And in turn, we're seeing a lot of commercial changes, uh, happen as a result of, uh, the, the change, uh, within the customer, uh, environment. So we're seeing methodologies in terms of services, approach, move from, uh, reactive to preventive, to proactive and predictive, and then essentially outcome based, which is the big, hot topic as we move forward is how do you move to an as a service economy? The third transformation we're witnessing is work. Work is changing dramatically. Um, according to the service council's voice of the field service engineer from 2021 technicians agree, uh, 91% agree. I should say that there's greater knowledge required. 89% agree that there's more technical skill requirements and 75% agree, uh, that there's more complex products. So the complexity of being a field service engineer is changing. But the role that they're playing in the customer experience is, is expanding. The ambassador role is, uh, becoming layered on them. The empowerment that they need in order to be the ambassador ambassador, uh, is being increased. And then the fourth and final transformation that we're witnessing is at the work, uh, worker level. Uh, we're seeing a lot of change with respect to the role. I talked a little bit about what the frontline field service engineer is, uh, in terms of their importance. But we're also seeing challenges with respect to knowledge Exodus. Uh, and I talked a little bit about the complexity of product and, and assets. Well, with this knowledge, Exodus, that's being fueled by the great resignation, as well as the silver tsunami, the retiring crisis. Uh, we're seeing a lot of knowledge exit the field. So the importance of upskilling and reskilling and empowering your teams with information, couldn't be more important. And we've been framing that as. An approach called building a technician agnostic infrastructure, uh, and that's through the empowerment of data and inte.

Chris MacDonald: 5:25

Well, I like the way you framed those pillars, because it describes, um, the need for something like proactive service and, and predictive maintenance in terms of, you know, dynamics, right. It's not the ability just because technology is there and innovation needs to happen that you should do it. No, rather it is. Here's the space that competitive nature of it. Here's what customer. Expect right now of our service group. And on top of that, it's actually sounds like it is really increasing the importance of that service person that has to show up, not just to fix the problems in a more on-demand way, but because of those customer expectations, that service person is now critical to the relationship critical to that business relationship. Is that a fair assessment?

John Carroll: 6:09

Absolutely. Yeah, we we've, uh, we we've seen the, the notion of a frontline field service engineer. Evolve from technician, which was really roll up the sleeves blue collar type work mm-hmm , uh, and, and move into more of a white collar, uh, environment where the, the field service engineer has been introduced, right? The importance of the, the technical skillset and knowhow behind, uh, all of the, the. The, the complex blue collar work. Right? Absolutely. Um, and there are many major brands that have recognized the importance of the technician. We hear some brands such as Snyder, electric who reference, uh, their technicians as, uh, superheroes, right? The, the, the person that wears the Cape and solves the day, uh, I've even heard recently, uh, Ford in its electric vehicle strategy. Roll out a team of field engineers that they call angels. Right? So we're seeing the evolution of the importance and it is because not only they're at that moment of truth with the customer. But they're playing such a, a deepened role with the customer. It's not just fixing and resolving and creating asset efficiencies and asset uptime. It's also representing the full customer journey opportunities to, um, uh, engage in new ways, the opportunities to purchase new products and assets. There's, there's a much broader role that the frontline agent is. So when

Chris MacDonald: 7:31

it comes to all of this data that a customer is collecting, that has the opportunity or ability to enhance their understanding of their product, their processes, but in particular, with predictive maintenance, this proactive understanding it, it gives you a sense of, uh, I imagine this the customer, the ability to be agile, right, to, to really show up and meet the customer where they are because of that time, Amona a more probabilistic future understanding of how they need to meet the needs of their customer. What is your. Research showing in terms of the success or execution of these predictive maintenance programs, we understand the goals are often lofty, right. Um, but what is the, the success rate? What are the, the challenges.

John Carroll: 8:12

well, if I had a dollar for every time I heard digital transformation in the last two years, I, I wouldn't be on the podcast. I'd be retired. Um, but one of the things that I think our research is showing is that there's a little bit less maturity than, uh, what we anticipate, uh, being the, the real life scenario at this current juncture. So, um, annually, we ask, uh, service leaders. We have a benchmark survey called the service leaders agenda. And we ask a series of questions, the internal and external pressures, both macro and micro level. We ask them, uh, their prioritized investments. Uh, we ask. What major initiatives, how are they measuring the success of their business? And year over year, uh, we're asking them, where are they in the journey of transforming their business along the path of reactive, to preventive, to proactive and predictive, to outcome based and on those two last legs of the journey. Um, you don't leave one behind. You're never gonna leave behind reactive or preventive. That's always gonna be a part of your service repertoire and your service business. You're always gonna have to be reactive to customer issues, but you can become more proactive and predictive. But year over year in 2021, uh, we saw from 2021 to 2022, we saw a decline in both those that had realized predictive support and those that have realized outcome based, uh, services as an approach. So, uh, in the scenario of predictive, we saw a five point decrease year over. in terms of, um, being, having achieved, predictive support. Wow. And in the area of outcome based services, we saw a 12 point decline.

Chris MacDonald: 9:47

Wow. And what, what do you think? So it, it sounds in on one side, um, maybe because of, uh, challenges in realizing the, the difficulty of doing these things or having the right strategy in place. Some businesses might be pulling back from these programs. Um, I I'd be curious if you have some insight on what accounts for sort of the difference between what was planned, um, and what was success and what are those factors that may be leading to pullback if that's what it

John Carroll: 10:16

is? Yeah. Yeah. Yeah, that's a great, great, great segue. I, I, I think, um, there's a couple things, couple critical pillars, right? One is, um, the presence of services leadership. Does your organization culturally understand and appreciate the importance of service as it pertains to the overall health of your business? Um, is there ex an executive function? Do they have a, a seat at the table? And, and there's a reason why that's important. Um, we actually commissioned a benchmark report, um, with support from PTC, uh, about, uh, 18 months. Uh, and the analysis happened about 12 months ago, and this was kind of amidst the crisis, right. The pandemic. And we were trying to understand the impact of CSAT on operational performance. And we asked, uh, leaders, um, a couple of different questions. And one of the things that we recognized was that when there is the presence of executive leadership and when there is the presence of a dedicated C S a. Those organizations are 2.3 times more likely to see an increase in customer satisfaction. We also, uh, witnessed that those organizations that were measuring CSAT for greater than five years were achieving a 16 and a 5% higher net promoter score. right. So recognizing service, having an executive function, um, is, is critical, uh, to the journey. And there's a couple of other critical elements, right? So you have to understand your why in a previous research study conducted by the service council, we asked, why moving, why are you moving to a predictive support strategy? And there were five top answer choices. And then there were some ancillary to answer choices as well. Number one was alerting customers of potential service events, being predictive and proactive in alerting your customers of an issue. The second was, uh, scheduling preventive visits, right? So commissioning your team to support those predictive scenarios with a dispatch. Uh, that's related to resolve that prior to it. The third was providing resolution scenarios to customers. Many customers are DIY or supporting the process of preventive maintenance or asset conditioning, um, or asset maintenance in terms of, uh, understanding the health and condition. And, and, and how are we triggering, uh, maintenance activities, uh, in dispatch scenarios. So how can we empower customers with, uh, resolution scenarios? The fourth? how do we remotely resolve? How do we avoid dispatch? The cost of a dispatch keeps going up on average. It's about $500 and it expands well behind that. If you look at, uh, the density of customers, if they're D if they're distributed and it, it, it also depends on the sophistication of the asset, the more sophisticated and complex the asset, the longer length the, the, the service visit is gonna. And then lastly, um, the ability to alter schedules to incorporate visits, you know, dispatch intelligence. So you've got these team of engineers that are out in the market and they're servicing sup support scenarios on a day by day basis. Well, there's a lot of windshield time. There's a lot of administrative time. And a big focus among service leaders is on workforce utilization because they're forced to focus on that. There's less talent, there's less skill sets, there's capacity challenges. And so how can they fill their day and plan for those, those valleys in the day of their engineers to fill it with predictive activities? Uh, like what we're talking about here. So there's a, there's a, a lot of criticality to, to, to the why factor. And there's a couple others that I can share as. One of the things that we're finding Chris is that digital transformations have been more framed around modernization than creating a digital thread. Right. We're seeing a lot of disparate systems, a lot of pockets in between all of these digital transformation initiatives. Mm-hmm . And I think that's the biggest challenge that we're hearing amongst our, our members. And there's, there's

Chris MacDonald: 14:16

certainly, you know, technology to enable a digital thread, but part of a digital thread fundamentally is bringing together data from different groups in the organization, right. Cross-functional stakeholders. So, so one of those, um, areas for example, might be engineering in service. Can, can you speak to, to when you have that better, um, organizational collaboration and are executing towards a true digital thread strategy rather than just modernization, um, some of the outcomes that can be enabled.

John Carroll: 14:46

Yeah. Um, so we're, we're seeing a, a big focus on, um, moving your employee strategy. So I'll talk about it in two, two respects. One of which is the whole design for service ability side of things, right? That's that understanding data and information from the asset and from the service experience and bringing that back to the enterprise to create better products, moving. That's a big, critical aspect of that digital threat. The other is on execution and effectiveness. Right? Well, I talked a little bit about capacity issues and skill sets, uh, being declining and, and knowledge Exodus with all of our senior engineers leaving the importance of supplementing reskilling and upskilling, uh, continues to rise up, up, up the ladder in terms of importance. But, um, we recently held a webinar actually with, uh, variant medical and, and the gentleman that spoke on that. He, uh, his name was Mike Kenny. He's the director of product lifecycle customer services for variant medical systems. And he talked. how many case scenarios they're sifting through in terms of the data and the intelligence and how people in labor intensive that was in terms of entering the information to then assimilate it, to then bring it into the design cycle, to then iterate around that and put it into the future release schedules. Mm-hmm and, and it, it was a great discussion. We had. There are so many learning moments within the case scenarios in terms of the customer, uh, life cycle, in terms of the asset life cycle, uh, in terms of, uh, you know, workflows, right. How to workflows line up. So there's a lot of information that can be gleaned from those case, uh, scenarios brought back into the enterprise to create better products moving forward. And, uh, I think that's a huge missed opportu.

Chris MacDonald: 16:33

So it, it sounds, you know, focusing back on predictive maintenance that companies have. You know, a lot of good intentions, you know, like you said, there is tremendous value. That's still realized, but companies were realizing this is not an easy task. And there's some things, you know, we can do basically at a conceptual strategic level, align it to the right initiatives, get the right people involved, measure the right things like CSET. What happens when you're unify around the importance of such a measurement, right? Elevating the role of service, understanding that role. These are all initial consider. Before you even get started theoretically, or, or getting restarted that you can start to think about right away, right before implementing or even modernizing technology stacks as you may need to. Is there any other advice, um, that you can give, um, to assist, you know, those companies that are pulling back a little bit that have struggled to, to get back on track?

John Carroll: 17:26

Yeah. I, I, I think that there's, uh, uh, you gotta think more proactively again, I would circle back to the why factor. I talked about the top five. Why factors of moving to predictive support? Mm-hmm , there's many others behind that. There's the improvement of forecasts of service demand. There's planning for future demand. Uh, there's uh, improving on the job training. Right? I talked about the knowledge and the skillset shortage. There's delivering data to customers, right? The relationship with customers is evolving and, and that circles back to the outcome based, uh, relationship movement that we're seeing the, as a service movement, uh, data governance and who has access to data is, is changing. And so how do you deliver data to customers? How do you share data who owns the data? And then there's the, the whole managed pay per use models, uh, in terms of why, right. Why move to a predictive support strategy? How do you manage those pay per use models? Well, to do so you have to be really, really sound in your service delivery. You have to understand and trust your ability to execute. The other critical thing is involvement in communication. You know, we we've actually published several research reports on change management, in the importance of involvement of your frontline agents in that process, taking their feedback. According to the voice of the field service engineers survey that I referenced earlier, 61% of technicians don't feel like management, listen to them. Mm-hmm or take their feedback in, in terms of transformation opportunity. So they're telling their management what they need to be more effective. but they don't feel that management is reacting to it. So involving them, they are touching the customer most often in your organization. So involving them in the process of change and opportunity for change is important in critical. And then the other thing is, is, is communicating that change and communicating the status of change and the importance of the. Um, and, and that is critical both in, inside the organization, but outside the organization involving the customers and communicating with them often.

Chris MacDonald: 19:29

Well, that was incredibly insightful, John. I think we, we covered a lot of ground. Um, really around predictive maintenance, learned a lot about the different pillars and the importance of why. Um, and I think that's especially important from, from my experience, my team's experience, working with customers in the field, if you are driving these strategies purely for technology's sake, or even purely for a. Competitive sake. It usually doesn't work because that framework of why we're doing something, why we're driving towards something, needs to pervade down to the data as well. Right. It needs to be a shared responsibility to understand what it really means to monetize and take advantage of data and to bring the right stakeholders involved, to make the technical application, even the data science and asking the right questions. It needs to be. You know, carry throughout the initiatives. So I really appreciated that framework. Most importantly, I really appreciate your time today and your insights. So I want to thank you, uh, for joining us today on the podcast,

John Carroll: 20:26

Chris, thank you so much to you and, and, and thank you to PTC. It's been a wonderful experience. Thank you. Thank you.

Host: 20:32

Thanks for listening to the speaking of service podcast brought to you by PTC. If you enjoyed this episode, please subscribe wherever you get your podcasts and leave a rating or review and be sure to check out other episodes, to hear new perspectives on improving life for aftermarket professionals, service teams and the customers they support. If you have a topic of interest or want to provide feedback, email us at speaking of service, PTC dot. Or visit us at ptc.com/speaking of service.