Industrial manufacturing organizations are increasingly motivated to seek value through connected systems. Yet few industrial IoT success stories contain enough details for showing others the way. Furthermore, statistics like “27% more efficient” or “19% productivity increase” are rarely meaningful or transferable to other businesses and vertical applications. Fortunately, one enterprise recently sat down to share details of their approach and experience toward successful Digital Transformation.
With customers around the globe, this industrial equipment provider is now leading the charge toward intelligent manufacturing. But it wasn’t always this way. For most of their 50 year history, the organization had prospered as a capital equipment company with a small services arm and aftermarket parts business. Then, the world began to change. First, international competition and technological advances meant more “good enough” options for their customers at lower price points. Commoditization loomed. Moreover, numerous independent operators and generic parts producers attacked service contracts and aftermarket opportunities. Second, a retiring electromechanical workforce threatened to break the chain of critical knowledge and experience required for developing and maintaining new and legacy equipment.
The company responded. To remain an Industry leader for the next 50 years, they moved away from being a product selling company to becoming a solution selling company. This is the outcome of industrial IoT done well. Today, they provide connected equipment systems for production facilities across a wide range of industries. Four years ago, services and aftermarket activities represented only 40% of their business. That number is now 60%, with a target goal of 75% for total revenue contribution. Their adoption of industrial IoT is fundamentally shifting the types of revenue driving their future growth. Critically, IoT is strengthening each of their customer relationships and increasing overall revenue durability.
Their story proves how IoT isn’t really about data at all – it’s about empowering your people and your customers to achieve greater efficiency and create more value. It’s about connecting people and processes, and bringing together digital and physical systems to achieve better business results. It blurs the line between vendor and customer roles and across systems and silos, of both database and human varieties. As such, IoT can be complex and scary – though not nearly as terrifying as being locked out of the value chain entirely by your customers and more forward-thinking competitors.
To navigate this journey in the face of both uncertainty and hype, their company leaders chose a measured approach of “practical” Digital Transformation. To begin, they adopted IoT through an iterative process of incremental value testing. Notably, they selected goals for increasing internal effectiveness rather than fixating on new customer offerings.
As a result, usage data from equipment inside customer facilities now empowers a more cost-effective services team and reduces truck rolls. Furthermore, understanding how their machines are operated in the field enables product teams to proactively identify problem areas and continuously improve their equipment offerings. Both use cases are internal rather than directly customer-facing.
