The value of your Installed Base is the value of your business

The value of your Installed Base is the value of your business

An OEM’s Installed Base is its most valuable asset. It has been built over a long time (20+ years) and typically has tens of thousands of machines owned by thousands of customers at thousands of unique locations around the world. These machines get used in harsh environments and require ongoing maintenance, repair, service – and eventually replacement. A typical machine generates 2-3 X of its initial purchase price in aftermarket and service spending. And for a typical OEM, more than 70% of its new equipment sales are from its existing customers, aka owners of the Installed Base.

A manufacturer’s Installed Base is incredibly valuable. But it is also very complex with complicated workflows cutting across multiple stakeholders and systems in this ecosystem.

Handling the Installed Base is Complex

Each machine is used differently, in different applications, and spread geographically in various demanding conditions. The stakeholders involved in the purchase, operations, and maintenance of the machine are multiple and varied in each owner. And similarly, for equipment makers, stakeholders are very different: sales, service, operations, marketing, support, etc. This creates an incredibly complex set of workflows associated with managing interactions and activities between customers and manufacturers. The complication is that these workflows typically span multiple independent systems, which means data is generated, consumed, and stored in many different systems. None of which are connected.

So, it is not surprising that most customer-facing employees in a manufacturer have very little knowledge of what’s happening in their Installed Base. It is impossible to synthesize disparate sources of information into a comprehensive understanding of the customer and machine. This knowledge and expertise are known only to a handful of people within the company. Manufacturers often rely on this small group of employees (“tribal knowledge”) to execute critical workflows.

Alternatively, they develop workflows by assembling data from these disparate systems – one machine, one customer at a time and this is time-consuming and expensive. Both of these don’t scale and aren’t repeatable across large customer and Installed Base populations.  The consequences of these broken processes are manifold: lost productivity, poor communication between critical stakeholders, unhappy customers, and reduced growth and profitability.

The Manufacturing Environment is Changing

As a wise man once said, “change happens gradually then suddenly”. Suddenly is here now.

Manufacturers and customers alike have tolerated this for years. But the environment is changing around them incredibly fast. First, there is a huge talent/workforce shortage that is affecting all manufacturers large and small. This has implications on how well and how fully OEMs serve their customers. There just aren’t enough people to go around which means manufacturers have to do more with less. Secondly, there is a huge generational transition underway in the workforce where an entire cohort of people is retiring or leaving the manufacturing workforce.

The new employees aren’t as experienced, or have the expertise of the former workforce, but need to be made productive quickly. Additionally, these new workers are digital natives and are looking for modern environments at work. They also have higher expectations than in the past. They simply won’t tolerate the experiences that their predecessors accepted and are advocating for better and different.

A final change on the horizon for manufacturers that are coming together as a result of the previous shifts is business model changes from selling products to selling outcomes. This requires a completely different set of skills and perspectives, both of which are not being addressed by many today.

But it doesn’t have to be so. It requires a different approach that relies on data, digitization, and automation to change how manufacturers address their Installed Base. It relies on sharing data, insights, and workflows across functions that deliver value to the Installed Base. It is a change from people-dependent, tribal knowledge-oriented cultures to data-driven, process, and data-driven approaches. It will also require a complete revamp of their digital approaches: implementing Zoom doesn’t count for digital transformation.

The Solution

Entytle has developed an Installed Base Intelligence Platform, purpose-built for OEMs to help them modernize workflows and make them smarter, faster, and more efficient. It consists of a unified semantic data platform, business applications, connectors to other applications, and services to enable and manage the components of the Cloud. It is an essential solution for the modern Industrial OEM.

This post has been originally published on LinkedIn.

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