Industrialist Blog

Want aftermarket sales to soar? Look to the cloud.

October 25, 2021

Many industrial companies have a cloud initiative underway, but most have not established cloud-native capabilities or scaled business impact. But they should. Especially if you’re looking to drive higher aftermarket sales—and what original equipment manufacturer (OEM) isn’t?

The fact is the cloud holds the key to generating higher value from your aftermarket programs. Here’s why:

What OEMs need most to grow the aftermarket is visibility—visibility directly to your assets in the field, but also with your dealers. For example, we have multiple large OEM clients implementing telematics to collect intelligence directly from their assets for predictive maintenance. However, what’s missing for many companies is insight into how the dealer responds when these systems trigger an alert. Was the alert warranted and accurate? What action, if any, was taken? Did that action resolve the problem? How long did it take?

Without dealer feedback, it’s difficult for OEMs to know how well their investments in telematics are paying off. And it’s nearly impossible to improve their accuracy—and value.

The cloud is simply the most effective and economical place to build that dealer feedback loop. The cloud offers scale, agility, and cost effectiveness. It also can enable you to extend the value of your technology investment by providing one, central platform to deliver systems that all your dealers can access to run their businesses more efficiently, as well as stay engaged with you throughout the typical product lifecycle and beyond.

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Why invest in cloud-based dealer enablement

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With some notable exceptions, the business case for individual dealers to adopt advanced capabilities like analytics and artificial intelligence that can drive business efficiencies and uncover new opportunities is limited. But by working closely with the OEM and other dealers, investments and talent can be pooled to make these cloud-based transformations more doable and affordable—and everybody’s business benefits.

I see three major ways for OEMs to leverage the cloud to build a stronger, more profitable, and continually evolving aftermarket:

Improve the core elements of aftermarket parts sales and service
Cloud technologies can help you and your dealers improve the core elements of your aftermarket business; that is, be more efficient in delivering parts and service to end customers. Cloud-enabled solutions can automate and optimize many aspects of scheduling and dispatching, getting the right parts where they are needed—at the right time—and enabling field technicians to spend more time working on equipment rather than behind the wheel of a truck. Equipping the technician with a smart phone app or tablet makes it easy for them to report back with details of the repair, which can be melded with your telematics data in the cloud. Applying deep analytics and AI to this collective data then provides valuable insights to further optimize systems and processes to improve the business. In fact, Accenture clients that have started on this journey of field service transformation are seeing service revenues grow 10–15 percent.

Create new, differentiated services to compete more effectively
With valuable data from your connected assets and dealer field service technicians, combined with AI and machine learning (ML) capabilities in the cloud, you now have the foundation for building new services that help your business stand out from the competition. Perhaps launch a fleet management service or offer condition monitoring, leveraging machine sensor data and real-time environmental parameters that can predict machine health to help customers improve safety and efficiency in the field. You could even collaborate with dealers to create a “resident technician” program, providing services to run and manage an entire job site for customers that keeps their equipment available and operating at peak performance.

Reinvent your business
The power of cloud-enabled data analytics, AI and ML together with the shift towards greater consumer power opens up a whole world of new business opportunities. You could completely change your business model to become a more outcome-based, Product-as-a-service model. For example, instead of just selling a piece of equipment, what if you sold a customer outcome—holes that can be dug, tons of material moved, hours of crane operation, guaranteed access to a tractor, or other creative solutions that align with customers’ business needs and priorities. Offering industrial equipment via a pay-per-use/pay-per-outcome model can create more predictable (and profitable) revenue streams for dealers and OEMs alike. And customers also benefit by being able to avoid large capital expenditures, instead shifting to an operating expense (OPEX) model.

Industry experts know OEMs must evolve their service capabilities to grow profitably and reposition themselves as service companies. The underlying objective of this is to maximize revenue generation while helping customers keep their equipment operational and productive, and minimizing unplanned downtime. Helping them achieve this objective with a high-quality service experience helps keep them loyal to your brand, your dealer channel, and your aftermarket offerings.

And the best way to enable all this is with cloud-based technology solutions that flex with the dynamics of your specific markets, extend your financial investments farther, and provide advanced capabilities to differentiate your business. Developing a successful cloud transformation with scalable impact takes commitment, a well-thought-out plan, and execution excellence.

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