Sales DNA and a Service heart

Strategic Product Lifecycle Management: Bringing Innovation to Every Installed Asset

In fast-moving industries, product innovation often outpaces the installed base. While new products launch with advanced features, thousands of existing units in-the-field remain unchanged. As equipment ages and technology advances, organizations face mounting maintenance costs, quality issues, and compliance risks. Yet customers expect their investments to remain efficient, safe, and up to date for longer periods.

This widening gap between innovation and field usage makes strategic Product Lifecycle Management (PLM) essential. Innovating at the factory is no longer sufficient; companies must proactively extend improvements to their installed assets.

The Challenge: Keeping the Installed Base Current

Organizations typically encounter four main obstacles when managing products in the field:

Innovations Rarely Reach Existing Units. New engineering breakthroughs benefit new products, but these updates seldom reach assets already in use, causing a divide between potential and actual customer experience.
Modernizations Must Start from “As Maintained,” Not “As Built”. Service changes often rely on outdated “as built” records. In reality, assets have been serviced or modified, and lacking accurate “as maintained” data makes modernization risky and costly.
Quality Issues and Recalls Demand Full Installed Base Visibility. Companies need instant insight into the location, configuration, and ownership of affected units during recalls. Without this, recalls are slower and more expensive, risking brand damage.
Lifecycle Optimization Requires Real World Product Behavior. Engineering relies on intended performance, but real-world feedback is crucial to avoid repeating issues and stagnating designs.

Consequences include higher maintenance costs, safety incidents, dissatisfied customers, and shrinking margins.

The Solution: A Connected, Insight-Driven PLM Loop

Modern closed-loop PLM systems like ServiceMax close these gaps by providing complete visibility, robust field change management, and structured project execution for upgrades, recalls, and modernizations. Key capabilities include:

Full visibility into every installed asset
Orchestration of upgrades, recalls, and engineering change execution
Project management for lifecycle campaigns across multiple assets
Closed-loop integration with engineering PLM systems
Support for the full Problem → Investigation → ECR → ECN process

This unified approach connects data from engineering to field operations, ensuring innovation reaches both new and existing equipment.

The Impact: Higher Performance, Lower Cost, Safer Operation

With better data and connected workflows, organizations realize four key benefits:

Improved Product Lifetime Performance. Comparing real-world performance with design intent enables continuous improvement, proactive modernization, and extended asset life.
Deeper Product Understanding. Feedback between service and engineering leads to better designs, fewer recurring issues, and accelerated innovation cycles.
Strategically Informed Portfolio Management. Insights into service costs guide smarter investment, product phase-out, and redesign decisions.
Maximized Asset and Market Value. Strategic lifecycle management increases asset lifespan, protects investments, reduces obsolescence and warranty costs, improves specs, drives modernization revenue, and lowers ecological footprint.

The result is a resilient, customer-centric service and engineering ecosystem.

Key Lifecycle Strategies for MLUs, Retrofits, ECRs, and Recalls

Lifecycle excellence involves structured processes and upgrades. Four major strategies include:

Mid Life Upgrades (MLUs): Modernize systems halfway through service life, replacing obsolete components and refreshing capabilities at lower cost than buying new. Examples include digital cockpits and AI-enabled systems.
Retrofits: Add functionality to older systems for efficiency or regulatory compliance, often reducing emissions and costs. Aviation retrofits using used materials can cut CO₂ by up to 90% compared to new parts.
Engineering Change Requests (ECRs): Formal proposals capturing the rationale and assessment for design changes, preventing costly errors and preserving decision history.
Recalls: Remove or repair unsafe products, protecting public safety and brand reputation. Modern PLM systems help identify risks early, reducing recall frequency and cost.

Why Strategic Lifecycle Management Matters Now More Than Ever

Products remain in the field longer while technology evolves quickly and sustainability requirements intensify. Customers expect ongoing improvement, not stagnation. By enabling upgrades, retrofits, and engineering changes for all assets, organizations can deliver innovation well beyond the initial sale, extend equipment life, reduce environmental impact, improve safety and compliance, and unlock new revenue.Strategic lifecycle management ensures innovation continues throughout every asset’s life, not just at the factory.

Monetizing the Installed Base: The New Growth Engine Hiding in Plain Sight

For decades, product centric business models have dominated industrial markets. Manufacturers focused on delivering high quality equipment, asset owners focused on keeping it running, and service providers filled the gaps in between. But as margins tighten and hardware becomes more commoditized, one truth has become impossible to ignore:

Real, sustainable growth no longer comes from selling more products—it comes from monetizing the products already in the field.

Across industries, companies are discovering that their installed base is far more than a collection of assets. It’s a strategic advantage: a source of recurring revenue, a foundation for stronger customer relationships, and a catalyst for innovation. Yet for many organizations, much of this value remains untapped.

So, what does installed base monetization look like—and why does it matter now more than ever?

Why the Race for Aftermarket Value Is Accelerating

Different players are entering the aftermarket with different motivations:

OEMs want to offset declining product margins by expanding high margin service revenue.
Asset owners want predictability, transparency, and lower lifecycle costs.
Independent service organizations and channel partners want a share of the aftermarket pie.

The competitive pressure is rising—and whoever understands the installed base best will win.

This is exactly where companies struggle. Without knowing where assets are, how they perform, what they need, and how they’re being used, it’s nearly impossible to unlock the aftermarket opportunity. Traditional systems weren’t designed to manage assets beyond the point of sale. As a result, opportunities slip through the cracks: contracts aren’t renewed, parts aren’t replaced, entitlements aren’t enforced, and customers don’t get the proactive service experience they expect.

Turning Installed Base Data Into Business Value

A new generation of service platforms is changing this picture. A state-of-the-art service management tool like ServiceMax provides a true As-Maintained system-of-record, capturing real world asset information: from location and condition to usage, service history, and performance insights. When paired with PTC’s PLM capabilities, companies suddenly have a connected thread from product design to field execution.

The result? A shift in value creation:

From sell-and-forget to sell-and service
From reactive fixes to proactive optimization
From break/fix interventions to data-driven lifecycle engagement

This isn’t just an operational improvement—it’s a strategic transformation.

What Companies Gain When They Monetize Their Installed Base

Organizations that embrace installed base monetization see measurable impact across four key areas:

1. More Contract Revenue

Knowing which assets are unprotected or underserved allows service teams to identify upsell opportunities and expand contract coverage. This reduces revenue leakage and strengthens customer retention.

2. Increased Part Sales

With accurate asset and BOM data, technicians and customers can easily identify and order the right parts the first time—driving higher attachment rates and reducing downtime.

3. Reduced Entitlement Leakage

When entitlement information is accurate and instantly available, it eliminates unpaid work. No more “free rides” due to unclear service rights.

4. Higher NPS and CSAT

First time fix rates go up. SLA attainment improves. Transparency increases. Customers experience service the way it should be—predictable, proactive, outcome oriented.

Together, these outcomes drive what every service and transformation leader wants: sustainable aftermarket growth with higher margins and stronger loyalty.

Why Installed Base Monetization Is Becoming a Strategic Imperative

In today’s market, the installed base is emerging as a company’s most valuable asset. Monetizing it creates:

Predictable recurring revenue from services, consumables, and subscriptions
Higher profitability, since service margins often exceed product margins
Greater customer loyalty, driven by continuous value delivery
A competitive moat, built from unique asset and usage insights
Scalable growth, as value compounds with each asset deployed

And increasingly, data itself becomes a revenue stream. Performance analytics, benchmarking insights, and optimization recommendations unlock new premium offerings and help customers run their operations more efficiently.

Winning Strategies for Installed Base Monetization

Leaders in this space are using a combination of tactics:

Aftermarket Services: Maintenance, repairs, consumables, and field service contracts create stable revenue.
Upselling & Cross selling: Asset insights reveal which customers are ready for upgrades, premium features, or complementary products.
Data Monetization: Performance dashboards and optimization insights become high value services on their own.
Subscription Models: Software, analytics, and extended support packages turn episodic interactions into lasting relationships.

The organizations that master these levers are seeing transformations not just in revenue—but in customer engagement models, operational efficiency, and competitive position.

A Shift Toward Outcome Driven, Customer Centric Value

Installed base monetization isn’t about squeezing more money out of customers.

It’s about delivering value over the entire lifecycle of an asset.
It turns one-time transactions into long term partnerships.
It aligns OEMs and service providers with customer outcomes.
It creates a flywheel where data fuels better service, which fuels better products, which fuels deeper customer trust.

In a world where hardware is increasingly commoditized, the installed base becomes the foundation for durable growth.Companies that recognize this shift—and operationalize it with the right systems, data, and strategy—are unlocking new revenue, stronger relationships, and a more resilient business.

Efficient & Compliant Field Service Delivery: The New Engine of Customer Uptime and Business Growth

For many organizations, field service delivery has historically been viewed as a necessary cost center—an operational function focused on fixing issues as they arise. But today, as products grow more complex, customer expectations climb, and regulatory scrutiny intensifies, field service has transformed into a critical competitive differentiator. Companies that deliver fast, accurate, compliant service not only reduce operational costs but also drive higher customer loyalty, stronger margins, and predictable revenue.

Across asset intensive industries, one theme is becoming unmistakable: efficient and compliant field service delivery is no longer optional—it is essential for achieving customer uptime, maximizing equipment effectiveness, and fueling sustainable growth.

The Growing Challenge: Complexity, Expectations, and Constraints

Modern field service organizations face significant operational pressures:

Increasing Product Complexity: Longer equipment lifecycles and advanced technology require technicians to access reliable lifecycle data. Without it, troubleshooting slows and costs rise.

More Demanding Customers: Clients expect personalized, proactive, and transparent service aligned with their outcomes, not just quick fixes.

Aging Workforce & Knowledge Loss: Retiring technicians lead to shrinking capacity and loss of valuable expertise, which can hurt customer satisfaction and slow service.

Volatile Supply Chains: Unpredictable parts availability complicates the coordination of labor, materials, and subcontractors.

Increasing Regulation & Risk Aversion: Stricter compliance demands require more documentation and disciplined safety processes.

This high-pressure environment exposes the limits of traditional tools and manual processes.

Asset-Centric Field Service Execution

When customers anticipate reliable product performance, it is essential for service delivery organizations to evolve their models from merely addressing failures to proactively understanding effective operations. Implementing an asset-centric field service execution strategy is fundamental to facilitating this transformation.

State-of-the-art asset-centric field service execution platforms combine multiple axis of service delivery.

Asset: A comprehensive 360-degree installed base overview enables technicians and managers to achieve complete visibility of asset location, condition, usage, service history, and contract entitlements, ensuring tasks are executed correctly on the first attempt.
Customer: A 360-degree customer entitlement perspective clarifies the services purchased and distinguishes billable items. Service level agreements establish customer expectations and set standards for service delivery.
Resources: Context-aware workflow tools integrate labor, parts, tools, and subcontractor availability to support hybrid operational models, including break-fix, preventive, predictive, and remote service.
Design intention: Robust PLM and ERP integration ensures access to accurate bills of materials, maintenance guidelines, engineering changes, and configuration updates, aligning service activities with original design intent.

Compliant, Efficient, and Profitable Service Delivery

Field service organizations have traditionally been reactive and cost-driven. With rising challenges and better asset-centric platforms available, leaders now have the tools they need to reach their goals.

Compliant Service Delivery: Consistent service execution within design, regulatory, and safety boundaries reduces risk and strengthens brand integrity, especially in regulated sectors.
Efficient Service Delivery: Knowing asset locations and conditions enables better scheduling, preparation, and fewer errors, supporting a shift from reactive to predictive maintenance.
Profitable Service Delivery: Insights into asset performance and costs help identify high-value assets and problem equipment, optimize contracts, and reduce leakage.
Closed-Loop Design for Service: Comparing planned vs. actual asset performance provides actionable insights for future product designs, improving maintainability and lowering lifecycle costs.

Efficiency Gains at Scale

Modern field service management systems, powered by real-time data and AI, deliver measurable improvements:

20–30% increase in daily job completions
33% improvement in technician productivity
15–25% reduction in fuel and travel costs using AI route optimization
20–30% reduction in administrative burden through workflow automation
Up to 80% fewer breakdowns with predictive maintenance; early adopters see 30% less unplanned downtime

Such gains reduce the cost to serve and enhance the quality of customer-facing execution.

Compliance as a Strategic Advantage

In sectors like utilities, telecom, aerospace, medical, and energy, compliance is becoming a strategic asset:

Digital checklists reduce non-compliance risks and fines
Automated audit trails cut audit preparation by 60–80%
Safety controls lower incident and breach risk by up to 80%

Organizations that excel at compliance build trust, avoid costly penalties, and create safer service environments.

Better Service, Higher Satisfaction, Stronger Loyalty

Efficiency leads to superior customer outcomes:

10–25% improvement in first-time fix rates (FTFR)—a key predictor of satisfaction
30–50% reduction in no-show rates via proactive communication and technician tracking
Stronger upsell/cross-sell opportunities as technicians gain real-time insights into customer needs
Higher NPS and satisfaction through entitlement accuracy and precise execution

High-performing field teams don’t just solve issues—they become proactive advisors and trusted partners.

Field service is now a strategic lever driving growth, profitability, and competitive edge.

Centralized Product Repair Optimization: Turning Service Complexity into Strategic Advantage

As products become more complex and customer expectations climb, organizations are rethinking how they deliver service. While field service has long been the default repair model, on-site repairs are no longer practical or economically sustainable for many product categories. Increased design complexity, technician shortages, and greater demand for refurbishment and remanufacturing are accelerating a shift toward centralized depot repair—a more efficient, scalable alternative.

Depot repair is quickly becoming a strategic cornerstone for companies aiming for cost efficiency, quality, sustainability, and customer satisfaction. By consolidating repairs into controlled environments with skilled resources, businesses can deliver higher quality results, gain economies of scale, and reduce reliance on limited field technicians. This evolution reflects a broader industry trend: moving from reactive, break-fix models to proactive, resilient, data-driven service ecosystems.

Why On-Site Repair Is Under Pressure

Product Design and Complexity: Modern products, especially those with advanced electronics or modular assemblies, often cannot be effectively serviced in the field. Field technicians may lack the required specialized tools, controlled environments, or deep expertise, widening the gap between repair needs and field capabilities.

Diverse, Dispersed Installed Base: Organizations face a variety of products spread across numerous customer sites. Maintaining repair quality at scale can be expensive and inefficient, with field teams often lacking the right tools or parts on site.

Technician Shortages: With an aging workforce and talent scarcity, companies can’t indefinitely scale field operations. Meeting service demand increasingly requires alternative models that decouple growth from technician headcount.

Rising Refurbishment and Remanufacturing Demand: Supply chain volatility and sustainability goals are shifting attitudes toward product lifecycle management. Customers want refurbishment options, and organizations aim to reduce dependency on new parts. Depot repair aligns with these circular economy objectives.

These challenges demonstrate that a distributed, technician-centric model is not always the most cost-effective or reliable way to maintain product performance.

Depot repair, a viable alternative service delivery mode

Instead of dispatching a technician for a complex field repair, the product is shipped to a centralized depot. There, skilled technicians perform controlled disassembly, cleaning, diagnostics, parts replacement, recalibration, and final testing. The product is then packaged and returned to the customer—often performing better than before the failure. This reliable, predictable process improves uptime, reduces costs, and delivers higher quality outcomes.

A Comprehensive Depot Repair Platform

A modern service execution tool like ServiceMax offers a full suite of capabilities to optimize depot repair operations. This platform brings structure, transparency, and efficiency to every process step:

Front-Office Operations: From entitlement verification to RMA handling, customers experience a smooth, transparent start to their repair journey.
Capacity and Workload Management: Central teams can balance workloads and manage technician availability to keep repair centers efficient and bottleneck-free.
Inbound Logistics and Loaners: ServiceMax manages equipment flows to and from repair centers, including loaner equipment to minimize customer downtime.
Repair Triage and Quote Management: Structured evaluation determines repair needs and costs before work begins.
Shop Floor Execution: Controlled environments ensure high-quality repairs, accurate sequencing, and effective task execution.
Quality Assurance and Outbound Logistics: Final testing and packaging ensure products return to customers in peak condition.

This approach transforms depot repair from an ad hoc task into a scalable, high-value operational model.

The Impact: Efficiency, Quality, and Resilience

Resource Optimization: Centralized environments drive economies of scale. Specialized tools and expertise are concentrated, reducing overhead and safeguarding intellectual property.

Supply Chain Resilience: Companies can better manage part shortages and lead times by optimizing component inventories and leveraging repair data, reducing dependence on new parts.

Strategic Advantage: Centralized repair protects brand quality, especially through indirect sales channels, while providing asset owners with valuable service options and consistent outcomes.

The Value: Lower Costs, Higher Quality, Stronger Revenue

Cost Effectiveness: Centralized repair significantly lowers labor costs compared to field repairs. Consolidated tools and inventories reduce overhead and improve lifecycle cost management.

Increased Quality: Depot environments yield higher first-time fix rates, fewer repeat issues, and more reliable performance thanks to controlled conditions and specialized testing.

Increased Revenue: Depot repair is attractive to customers, especially when bundled with extended warranties, contracts, or refurbishment programs.

Sustainability: Repair and refurbishment extend product life, reduce waste, and support sustainability commitments while reducing environmental impact.

A Strategic Lever for the Future

As organizations navigate supply chain constraints and the demand for sustainable business models, depot repair is becoming a strategic capability. Centralizing repairs gives companies operational control, reduces field complexity, and builds resilience into service networks. In short, depot repair isn’t just a cost-saving measure—it’s an engine for higher quality, stronger customer loyalty, and sustainable growth.

The Value of an Asset Data Foundation for Service and Engineering

In today’s rapidly evolving industrial landscape, organisations face mounting pressure to deliver products to market faster, maintain high quality, mitigate costs amidst supply chain volatility, and comply with increasingly complex global regulations. These challenges are intensified by the need to compete in global markets and discover new sources of revenue.

Companies that design, manufacture, operate, and support physical products are seeking ways to maximise asset performance, reduce costs, and generate value in innovative way.

Asset Data Reality

Let’s imagine your company has three product lines designed at separate innovation centres and manufactured in plants across the US, Europe, and Asia. Products are sold both directly through national sales organisations and indirectly via importers, dealers, and resellers. Over a decade, you’ve pushed $5 billion worth of products into the market. And recently, the CEO announced an acquisition, adding a fourth product line with its own sales channel and a $1 billion installed base.

Service providers and asset owners now face the challenge of maintaining a total installed base of $6 billion while anticipating a generation of more complex and digital products. Despite various business applications, the core issue is fragmented product lifecycle data, varying in completeness leading to sub-optimal decision making.

Fragmented lifecycle data

Traditional systems such as ERP, MES, PLM, IoT, and field service management often face integration challenges, resulting in data inconsistencies, operational inefficiencies, and suboptimal decision making that negatively affect cash flow and EBIT.

While many organisations have implemented MDM and BI tools, these solutions frequently lack the necessary context and user accessibility for broad adoption, leading to slow and costly insight generation.

As a result, executives are often required to make decisions in volatile environments without dependable data, which can impede their ability to drive product innovation or deliver efficient and profitable services.

Impaired decision making

When considering our sample company—featuring four product lines, an installed base of $6 billion, and a product lifecycle spanning 10 years—the volume of data generated is both substantial and continually increasing.

“We are surrounded by data, but starved for insights”
— Jay Bear —

Examples of poor decision making caused by fragmented lifecycle data for executives:

Design: Lacking insights from previous versions hinders product improvement.
Sales: Unclear product performance makes it hard to assess portfolio relevance or identify top and underperforming products/customers.
Quality: Incomplete field data prevents verification of product performance and timely corrective actions.
Service: Inefficient maintenance results from missing As-Designed prescriptions and As-Built records.

A different approach to achieving an asset data foundation

When traditional ERP, MES, PLM, and FSM systems are too complex to integrate, and MDM or BI tools lack context, businesses can turn to a modern alternative: an AI-powered Asset Data Foundation managing the product lifecycle data holistically.

The AI-powered Asset Data Foundation establishes an integrated layer between various system-of-records for product lifecycle data and an application platform. This enables users across design, sales, quality, and maintenance functions to access comprehensive data, supporting informed operational, tactical, and strategic decision-making.

The Asset Data Foundation recognises the different forms data takes at its original sources, understands the context, and is equipped to clean and validate this data, creating a more reliable and enhanced source of truth.

To facilitate real-time insight extraction and support informed decision-making from comprehensive and unified datasets, maintaining optimal performance and responsiveness is essential. Consequently, data vectorisation is incorporated within the Asset Data Foundation layer to provide advanced data processing capabilities.

Business value for Engineering and Service

While several business functions within an enterprise can gain from an Asset Data Foundation throughout the product lifecycle, Engineering and Service are the primary contributors. Engineering is responsible for setting the product’s intent during its digital lifecycle, whereas Service oversees its real-world performance during the physical lifecycle.

Organizations frequently invest significant resources in the design and development of high-quality products, which are subsequently introduced to the market. In a sell-and-forget business model, establishing an asset data foundation may not be a priority. However, when shifting to a sell-and-service approach, a robust asset data foundation becomes essential.

In our example company, $6 billion in products are introduced through various go-to-market channels. Achieving complete visibility of asset location, condition, and usage via the asset data foundation would enable Service to reach world-class standards in installed base monetisation. Additionally, the asset data foundation would offer access to design intent details, supporting efficient and proactive service delivery.

At our sample company, four different product lines are developed across four separate locations and produced in three different regions. By leveraging asset data regarding visibility, condition, and usage from the same installed base, Engineering can more efficiently and effectively drive innovation for both new and existing products.

See also PTC blog: The power of a strong data foundation

Managing Service Profitability in the Age of Digital Transformation

Editor’s note: This post was co-written by Joe Kenny and Coen Jeukens.

It is an age-old dilemma for Operations Managers. Your CEO wants XX% revenue growth, your CFO wants XX% cost reduction, your CRO wants better references and higher NPS scores, and you are supposed to deliver all of this with zero additional investment, because – of course – you have been doing this for years with no additional cash, so why would you need it now?

To top all of this off, you had very little idea of where you stood, operationally or financially, at any given time. And this was due to the fact that access to real-time data, a current view into work in process, and accurate financial information was all impossible to come by.

Historical challenges for service operations

I often speak at conferences and participate in webinars, and I often relate this anecdote – in March I would lay out my operational plan, based on the most recent P&L statement I had received (January’s), intending to address performance weaknesses I had uncovered. My team would execute the plan and in May I would receive my March P&L to see if the response to January’s performance shortfalls were successful or not. It was madness.

Now, layer onto that, the fact that 30, 60, 90-day invoicing accruals were also Operation’s responsibility, even though we had an AP department. This process greatly impacted both revenue and cost, as the cost of service was consumed, but the associated revenue may not have arrived in 90 days.

Impact of digital transformation

Fast forward to today, and service operations managers have been given a lifeline—digital transformation. Digital transformation can be like a light switch, illuminating what is happening in real time, allowing service operations leaders to adapt to circumstances immediately. They can reallocate precious resources instantly, validate payment status and credit status prior to service delivery, and see and understand the impact of operational plans in real time.

Digital asset and service management platforms can provide real-time performance measurements, both foundational and top line. This includes data round first-time fix rate, mean time to repair, mean time between failures, and equipment uptime. With this data, operations managers can organize and drive for peak utilization of labor resources while ensuring that the training and quality of work are optimal. This then increases the efficiency of their organization and lowers the cost to deliver excellent service.

With today’s technology, service operations are finally on par with our commercial partners and can see and act on upsell, cross sell, renewals, and service contract extensions instantaneously. In addition, we can support sales by identifying and helping them target competitors’ equipment for targeted replacement. We are the eyes of the commercial team on the customer’s location.

Newfound financial control

Utilizing a digital solution allows for real-time tracking of labor, parts consumed, travel, and any other costs associated with a service call, regardless of whether it is a T&M call or in support of a warranty/service contract entitlement. This is a key advantage that enables service operations leaders to manage labor and parts expenses far more granularly. In addition, they can evaluate the revenue associated with the service provided to validate if the pricing is correct based on their revenue and margin targets.

This ability to understand the cost to serve on an asset or entitlement agreement in real time is a huge step forward for service operations. It gives them the data they need to truly align entitlement pricing, cost control, operational efficiency, and productivity to accurately manage and forecast their performance and address fundamental issues that are obstacles to achieving their own performance objectives.

The evolution of equipment and asset service management platforms has greatly assisted service operations professionals in attaining the insight, visibility, and control that their commercial and financial counterparts have enjoyed for decades. As asset and equipment maintenance and service becomes a larger part of most organizations’ revenue and margin contributions, it is important that they equip teams with the technology that enables them to better manage and control their operations.

Published on PTC Blog.

Sustainability by Design: How Service Lifecycle Management and Digital Thread Drive Efficiency

At this year’s 21st service management forum, ASAP will feature “the servitisation revolution for sustainability.” While both keywords attract attention, the road to action is less obvious. I find it positive to see a growing consensus on the ‘why’ and ‘what’ of sustainability. However, I detect a more hesitant dynamic when addressing the ‘how’ and ‘who.’ Hence, I will deliver a keynote, “Sustainability by Design,” on October 25th, sharing practical approaches to help you deliver on your sustainability ambition.

Sustainable product design

For just over 30 years, I have worked in the service domain. When I ask service leaders and technicians about the serviceability of products, it feels like poking a bear. “What did engineering have in mind when they designed this product? It is difficult to both diagnose and repair.”

By nature, service technicians are a mix of firefighter and magician: they will get the work done, one way or another. Whether that work is done efficiently, cost-effectively, or profitably is a different story. But is it sustainable? Definitely! Repairing a product is more sustainable than buying a new one.

For years, iFixit.com has been giving repairability scores to B2C products. Its purpose is to change the consumer mindset regarding sustainability. Today, sustainability awareness is embedded in right-to-repair legislation (both in the EU and the U.S.). See the iFixit Repair Manifesto here.

Shifting to the B2B world of your technicians, they could write a book on the challenges of repairability:

Why do I need two hours of labor to disassemble a product to replace a $5 component?
Why do I need special tools just to open the product?
Why does the repair kit contain parts I never use and/or cannot reuse?

These challenges are embedded in the product’s design, which brings us to the topic of design-for-service, or perhaps we should say design-for-operation. Meaning: how easy and sustainable is it to use products?

Now, we arrive at a branch:

How do we make existing products more sustainable?
How do we make new products more sustainable?

For the latter, we could start from scratch and act upon the guidelines for sustainable product design. For the former, we must accept historical/sub-optimal design decisions and establish mitigating strategies in the domain of service lifecycle management (SLM).

Service lifecycle management (SLM)

When I visit OEMs (Original Equipment Manufacturers) as a service persona, my favorite opening phrase is, “You design and build great products, and then they go into the field.” This “going into the field” will happen regardless of whether design-for-serviceability and sustainability concepts are applied during the engineering process. What I’m saying is that SLM can and should apply its own design-for-sustainability paradigm when defining processes and tooling. By doing so, the service function will achieve two goals:

The current installed base will be serviced as sustainably as possible, within product design constraints.
Data collected from the existing installed base will feed sustainability improvements for the next generation of products.

An example of a simple, efficient, and powerful way to drive sustainability is by using the mean-time-between-failure (MTBF) metric in a plan-versus-actual approach.

Suppose Engineering designs a component with an expected MTBF of 10,000 hours. This is the plan. We then produce a batch of 100 units, which go into the field. Each of those units will have a unique service lifecycle, generating live data. This is the actual. When a unit fails, Service typically repairs the component reactively. But when you start using the MTBF to predict and identify outliers, you become more sustainable:

Planned interventions are both cheaper and more sustainable than unplanned work.
Comparing actual vs. planned MTBF will help identify unplanned downtime and sustainability issues early on.
Capturing actual MTBF is a critical data point for sustainable product design.

If the actual MTBF deviates from the planned value, it doesn’t always mean Engineering was wrong. Sustainability also involves a customer component. Acting on the discrepancy may lead the OEM to advise the customer on better usage and product management.

By design

In the previous two paragraphs, I’ve addressed two facets of Sustainability by Design: a product-design facet and a process-design facet. Combining the two will boost your sustainability benefits, making 1 + 1 = 3.

Two additional concepts come into play. You could see them as building blocks of your sustainability agenda:

Digital thread: The flow of product information through all stages of its lifecycle. In other words, a thread from as-designed, as-built, as-sold, as-installed, as-maintained, and as-decommissioned.
Product Passport: The system-of-record for products in the field, capturing the data from all touchpoints over its service lifecycle.

Where the digital thread anchors product lifecycle information from engineering to service and vice versa, the Product Passport captures the service lifecycle information of each product instance in the field. Together, they create an actionable closed loop regarding a product’s health and performance. These insights help the product owner, OEM, and service organization make informed decisions about three important lifecycle choices affecting sustainability:

When to maintain a product.
When to upgrade a product.
When to replace a product and recover the residual value of the old one.

Whether sustainability is your primary or secondary driver, the technology to realize your ambition exists today. Digital Thread and Product Passport address the ‘how’ and ‘who.’ If you want to learn more, visit us at ASAP Service Management in Brescia, Italy, on October 24th and 25th, or contact us.

Published on PTC Blog.

Monetizing End-of-Life Assets

When we buy a product, we have an expectation of how long we’ll be able to use it and how much value we’ll be able to extract from it. The length of this period is traditionally governed by terms like technical and economic lifecycle. How much more value could we derive from a product with modern asset centric service lifecycle management tools? Let’s show you how to monetize the end-of-life phase of a product.

In 2010 I worked for a global OEM, selling mission critical equipment. In my first conversation with the product sales leader, I asked what value promise we made to our buyers concerning the operational and service lifecycle of our products. In short: “If product owners use the product in line with the use cases anticipated by our design and engineering team, if product owners practice good husbandry and execute all preventive maintenance instructions as laid forward in the user manuals, then our product will operate at nominal performance for the duration of the technical lifecycle.”

Wow, read that response again and spot the “ifs” and assumptions in that sentence.

There was a time when the OEM was the only one knowledgeable about the product and the owner/user wasn’t. The OEM determined the length of the technical lifecycle and the conditions for good husbandry. Today, customers are more informed and certainly more vocal. The OEM will need a better story to contextualize maintenance prescriptions and underpin replacement, retrofit, and decommissioning decisions.

Contextual maintenance prescriptions

In 2020 I wrote a blog based on a question from a product owner who wanted to reduce its maintenance cost. “What happens to the performance of my product when I skip a preventive maintenance cycle or increase it from 12 to 18 months?”

Representing the OEM, this was a tough one. I could repeat the prescribed maintenance instructions, but I had neither carrot nor stick to convince the customer to adhere to these instructions and buy my maintenance services. If I gave in, I would certainly lose preventive maintenance revenue; if I held my ground, I might win in the short term, to lose the bigger picture. What I needed was a mechanism to consider the age of the product as well as the wear-and-tear.

Managing aging products

Creating such a mechanism and developing a contextual rationale for maintaining aging products is relevant for both OEMs and product owners. To underpin the answer to the question is: “What is the tipping point where to continue to invest in the current product versus going for a newer product?”

During the warranty period, asset owners expect their products to work without any substantial maintenance cost. As the product ages towards mid- and end-of-life, those expectations shift. To monetize those shifting expectations, an OEM will need an asset centric service model. Meaning, knowing where the products are, in what state and how they are being used.

What does this look like? If each touchpoint with an asset during its service lifecycle represents an activity. If each activity requires an effort. If each effort has both a cost and revenue component, then you can paint a picture of the cost-to-serve that product over its lifecycle. When you start comparing actual cost/revenue against planned cost/revenue, then you will have the data points for decision-making. In a full transparency mode, customers will have the same information, leading to balanced buyer-seller investment decisions.

Informed investment decisions

To understand how an OEM can monetize end-of-life situations, it is necessary to flip the point-of-view to the asset owner.

Suppose a customer purchased a product a couple of years back, to fulfill specific use cases. The buyer made certain choices to maintain the product to protect that investment. At any point in the lifecycle of the product, the owner needs to decide:

Do I continue using the current product in gradually degrading mode?
Do I retrofit or upgrade the product boosting performance and/or lifespan?
Do I decommission the old product and buy a new one?

To make an informed decision, one considers:

The product is getting older in calendar years
Product output/ performance is dropping below a certain clip level
The cost to maintain the product is higher than the value it generates
The use cases for the product may change over time

Ideally, one would have tools to make a forward-looking statement. A tool answering the question: “Considering all of the above, how much opex and capex do I need to spend on my product to keep it in working order?” Such a tool exists!

Multi-year maintenance plan

In the 1970s a method called the “House Condition Survey” was created in the UK to determine the technical state of buildings and to derive subsequent maintenance plans. Not based on abstract/generic, OEM-sourced maintenance prescriptions, but based on the actual state of the equipment in the context of its use, wear, and tear.

In the Netherlands this methodology has been refined in a norm NEN 2767, with a so-called Multi-Year Maintenance Plan (MYMP) as primary output. The asset owner can ask a service provider to execute ‘textbook’ preventive maintenance and contract an additional MYMP. The MYMP will serve a forward-looking opex/capex statement for budget planning and risk mitigation purposes. For the service provider the MYMP serves as input to defining sales strategies monetizing end-of-life.

Monetizing end-of-life

Now we have the data points to construct a forward-looking statement and we understand the interest of the product owner, the OEM can build an end-of-life services portfolio:

Upscaling textbook preventive maintenance to condition-based maintenance
Selling retrofits and performance booster packages
Subscription offerings to keep the product on latest engineering revision and software level
Buy-back of older products and sell them as refurbished units
Cannibalize decommissioned products for component and precious-metal recovery

With the above services portfolio, both OEM and asset owner have a toolbox to monetize the end-of-life of a product. Deployment of the tool is not a one-size-fits-all but is contextual to the actual behaviour of a product in the field. Knowing where those products are, in what state and how they are being used, is at the foundation of lifecycle monetization.

Published on PTC Blog.

Unlocking Revenue Potential Across Teams: A Cross-Functional Approach

Your company designs and builds great products. For each product sold, you’re making a margin. In a market with growing competition and vocal customers, that margin is under pressure and tempering EBIT growth. At the same time, you hear about healthy margins on services. To satisfy your CFO and shareholders you want to tap into this service lifecycle margin contribution. Consequently, we see OEM organizations turning their attention to service revenue growth. And when they do, what personas will drive the revenue growth agenda?

To help answer that question, here’s a story: About 15 years ago I met a salesperson at an event rejoicing ‘the day of sales and after-sales’. With conviction I explained the value of after-sales services. He was very resolute: “If there is so much margin in selling services and we crave bonuses, why aren’t we jumping on the service bandwagon?” Less than two weeks later another salesperson shook my belief in service value by saying “Profitability, who cares? Certainly not sales.”

These two experiences have humbled me toward the revenue growth agenda. True, service may have a more favorable margin contribution than product sales. Still, you first need to make the initial product sale before you can sell after-market services. Hence, the revenue growth agenda is not an either product or service play, but a joint effort.

To quantify the EBIT/margin contribution potential of a joint revenue play, we’ve developed the mind-the-gap exercise. What if you have visibility of all units sold? What if all product owners have a commercial service lifecycle relationship with you? What if all those service contracts are of type ‘gold’? Compare this maximum, this total addressable market (TAM) with your current service revenue. Either you ‘claim’ this gap…or somebody else will.

Playing a different tune

As simple as it sounds, knowing the gap is existential. As a company you’ll have to make an informed decision where you want to generate margin contribution, how you want to fuel EBIT and deliver on shareholder expectation. What portion of the lifecycle margin contribution do you ‘claim’ as OEM, grant to the indirect sales channel or to our competitors?

The underlying paradigm of service lifecycle revenue is that customers buy products to use them, to derive value from its output/outcome. This drives asset owners to mitigate product-downtime, and, as products become more complex, they will rely on service organizations who can guarantee uptime. This is where the OEM, as designer of the product and owner of the intellectual property, must make a business model choice: do we sell-and-forget or do we sell-and-service? And once that decision is made, multiple personas come into play to underpin revenue growth:

Engineering
Sales
Service/After-Market

Engineering

It makes a big difference if you design a new product for a sell-and-forget model versus sell-and-service. In the former, you optimize the design for manufacturing and focus on the margin contribution from the product sales (capex). Any after-market revenue is incidental, non-recurring and non-predictable. The installation, maintenance and operating manual are packaged in the product sale as mandatory deliverable, not as intellectual property you can monetize.

In a sell-and-service model you optimize product design for serviceability and operability. Since you have a vested revenue interest in supporting the product throughout its entire lifecycle (opex), you’ll make deliberate decisions on how and who can sustain the product.

Do we repair on component or module level?
Is this a self-service activity or does it require trained/ certified resources?
Can we fix this fault code via remote, onsite or depot-service?
Is firmware embedded, open-source or firewalled?
Do we design for retrofitting and upgrades?

Ultimately, one can plot all those service design decisions in a lifecycle chart. Each node represents a touchpoint, an activity, an effort, a cost and a revenue. This engineering plan-view is the basis for revenue generation/margin contribution in sales and service.

Sales

In a sell-and-forget model, sales may choose not to complicate the sale by talking about lifecycle opex. As a result, after-market revenue and margin contribution are unpredictable.

In a sell-and-service model, sales have a choice to generate revenue/margin contribution through a mix of capex and opex. The more engineering embraces design-for-service, the larger the lifecycle services portfolio, the more sales opportunities.

The engineering-lifecycle-view is both a great tool to educate prospects on what to expect during the operational lifecycle, as well as an instrument for cross and upselling. Once the prospect ‘acknowledges’ the lifecycle chart, it becomes a matter of visiting the nodes and ask: “will you do it yourself or shall I do it for you?”

Thirdly, this engineering-lifecycle-view is a pivotal building block in reshaping the relationship between OEM and distributors/resellers. Once you can visualize and quantify the revenue potential of after-market, OEM and reseller can renegotiate the dealership agreement, sharing profit and partnering in joint service delivery, upholding product quality and brand perception.

Service/After-Market

Once products are in the field, actual product behavior can be measured. Because each customer use is different, service delivery personas need (near) real-time tools to detect deltas between plan and actual.

Without such tools, you’ll probably deliver free service. According to Aberdeen State of Service this amounts up to 14% of your service cost. Call it leakage or missed revenue.

Without comparing plan versus actual on installed product level, you may miss out on the customer context and upsell potential. For example, when my car goes for maintenance, the mechanic can tell me if I drove my car according to engineering specifications or if my actual wear-and-tear is different. It may come as no surprise that informed and empowered technicians are the best salesmen, advising me to replace components, suggest an upgrade, or buy a new product.

Team play

Based on the above, we can ascertain that service revenue growth is not owned by a single persona, but it is a team play. The team can use the mind-the-gap exercise to quantify the revenue potential. Once that potential is defined, your CFO and shareholders will certainly task one of those personas to drive the EBIT contribution.

Published on PTC Blog.

How to Keep Frontline Field Service Techs Engaged and Boost Productivity

Problem solving, we are consistently told, is one of the key skills of the modern workforce. That ability to recognize a problem and find creative ways to fix it, is surely worth something. Given the on-going challenges around skilled labor (there doesn’t seem to be one industry where this is not an issue), this is key.

But organizationally, there’s a problem. On a macro level, only 31% of employees report they are engaged, enthusiastic, and energized by their work, according to Gartner, while global consultancy BCG says the current skills ecosystem “is broken.” Individual employees are struggling with engagement, enthusiasm, and energy, while organizations struggle with getting the work done and meeting contractual obligations. Clearly something needs to be done. And this applies to field service, as much as any other industry.

Service teams have been dealing with changes for some time now, especially an aging workforce and competing for new talent. Creating working environments that engage service techs, especially the millennial and Gen Z generations, means rethinking not just roles and the structure of work but also the very tools that workers can and want to use.

A London School of Economics (LSE) report last year suggested that Gen Z, for example, has very specific expectations of working environments and digital tools. Younger employees want access to the same modern technology they use at work as they do in their personal lives as they use. The reports says that these include “a lack of tolerance for latency in communication,” as well as “a frustration with legacy solutions and the inability to expediently source information.”

In field service, we have seen this same scenario play out, especially within organizations with limited to no digital transformation. As a Service Council report finds, organizations are facing a staffing issues due to challenges around job roles and tasks, as much as the availability of skills in the market.

“Difficulties with technician hiring and retention, and loss of [institutional] knowledge through retirement, are likely here to stay,” says the report, adding that 80% of field service techs claim that administration and paperwork is their least favorite part of the job.

By recognizing employee pain points, field service leaders can utilize tools to not just ease burdens but actually improve employee experiences. This in turn can reduce wasted time and improve overall first-time fix rates, a key metric when it comes to managing customer experiences. In the words Sir Richard Branson, if you’re good to your employees, they will be good to your customers.

Digital tools and collaboration

Another growing issue among service techs is so many experienced people are retiring or near retirement age. While digital tools can help with knowledge transfer, they can also drive engagement. Through automated knowledge capture and collation of repair work (no matter how obscure) from colleagues, combined with remote access to the latest tools, parts and methodologies, employees will always feel they have the ability to grow in their work and manage previously challenging field jobs.

With AI-enabled tools to manage admin tasks and mobile devices providing frontline service techs with information at their fingertips, there is an opportunity to dramatically improve customer interactions and collaboration. Today’s customers seek an expedited and on-demand service experience, and this extends to field service interactions. This can sometimes translate into a growing preference for self-service options and a desire for faster resolution times on issues they can manage independently. Customers and employees alike want choice and autonomy.

The key here is how to use technology to enable customers, putting powerful collaboration capabilities in their hands, while also enabling service teams to optimize the coordination and management of any technical support work. Tools that enable technicians to collaborate with experts can lead to improved resolution for customers, whether service techs are on-site or working in a remote capacity.

Embracing change

Ultimately, the traditional field service model is evolving fast to include multiple channels and personas. Customers are more vocal and better informed, making service delivery contextual to channels and personas. This demands digital capabilities to manage the different workloads. For any field service technician, knowing your organization has your back by giving you all the right gadgets and tools required to do the job efficiently, has to be a fundamental requirement.

Certainly, with a younger cohort, there is an expectation. Digital tools are essential for frontline service techs to not just have information at their fingertips but also to help manage relationships with customers. Mobile apps, for example, should be used to enable service techs to manage work schedules, complete complex work orders, present service reports for customer signature and provide dynamic pricing of labor, parts, and products in the field.

It is the familiarity with personal technology that service technicians want in the workplace, featuring powerful field service tools that can design and deploy business processes across multiple platforms and devices. It means a low barrier to entry with minimal learning, while delivering a level of functionality that dispels any concerns over laborious administration or the ability to communicate through multiple channels.

Equipping technicians with the right tools and knowledge to resolve issues efficiently and minimize the need for repeat visits is key to satisfaction and AI has a role to play here too. On job completion, generative AI, for example, can summarize the interactions and work performed, to capture and store the knowledge for future reference or even for reporting purposes. It can also support technicians to deliver better experience, speeding-up resolution times by analyzing historical service data and equipment schematics, suggesting potential solutions to technicians in real-time.

These tools also help to provide frontline service techs with a progression path. Upskilling and retraining is increasingly important to workforce retention – 50% of today’s global working population needs to upskill or reskill to stay competitive, says BCG.

The future happiness of frontline service techs relies on three key themes. Firstly, that job satisfaction and autonomy is driven by successful engagements with customers. Secondly, this is only achieved through modern digital tools and services, enabling optimized working conditions and customer self-service and remote service provision. Thirdly, service techs do not want to stand still. They want to collaborate and to learn. The key to service improvements is keeping both your employees and customers happy.

Published on PTC Blog.