The rise of the digitally connected consumer is driving transformation in the automotive and electronics industries. They are sharing information and opinions about products and services in virtual communities, which has created a sea change in the way products are purchased. Ubiquitous connectivity is starting to apply to products as well, resulting in a much greater focus on consumer expectations of the entire product lifecycle, as well as the resulting experience.
At the same time, there has been a shift in consumer attitudes. “The way people are digitally connected today is making a big difference in their expectations of service from the organisations they interact with,” says Enrique Andaluz, business development director, worldwide discrete manufacturing at Microsoft.
Eduard Marfa, director of Teamcenter EMEA marketing at Siemens PLM Software, agrees: “With the Sony Walkman you might have bought in the 80s or 90s, you would have simply paid for it and expected little else. However, when buying an MP3 player today you are not just getting the product, but the platform too – a business system that helps you buy music, apps and more. You are buying the complete lifecycle of a product, and you want the manufacturer to take care of the goods during that time.”
To enable this support, many products now have embedded sensors that allow usage and performance to be remotely monitored throughout their lifecycle.
“By collecting customer analytics, manufacturers can now better target their audience, whether they are entering an emerging market for the first time or launching a new product into their current market, by being able to monitor and market to their potential customers more easily,” says Andaluz. “Predictive analytics, for example, allows firms to predict the performance of their products and enables them to be seen as highly service-oriented organisations.”
“If a manufacturer or their service agent can detect through predictive algorithms that the television I have is going to fail in two weeks and contacts me with an upgrade fix before I have even realised there is a problem, how good will I feel about them? That’s how this kind of connectivity is altering customer expectations.”
In the automotive industry, sensors within in-car systems can gather data on driver behaviour from the vehicle. Delivered via the cloud to manufacturers, this information can be used to improve the design of vehicles and boost sales. It can also be used to save costs by preventing product recalls. Andaluz says: “If, for example, electronic sensors in a car detect that a dashboard switch isn’t operating correctly – and the analysis shows all locations globally where that switch is used – it may be that a quick resolution is to send an internet update fix for the connected cars, potentially eliminating the need for a costly recall.”
Connected capabilities may be extended to the manufacturer’s retail and distribution partners – who can use the gathered information to provide superior service, penetrate emerging markets, promote new products, grow sales and find new sources of revenue. And lost leads during the sales process can be avoided with the capability to make well-informed decisions. “First, manufacturers who can position their inventories at the right place and time will be reducing their cost of sales,” says Andaluz. “Second, they will be able to identify who they are selling to and how to best sell to them, as well as highlighting the channels through which their customers will be able to receive faster and more efficient product servicing.”
The benefits of being connected don’t stop there. These capabilities are also driving improvements in the upstream relationships between tier-one suppliers and original equipment manufacturers. Andaluz points out that: “In the case of some electronics firms today, it may still take as long as four weeks for experienced partners who collaborate frequently to share information between them in order to create a sales quote. By the time they are ready, the sale has been lost to the competitor who -- well connected to its trading partners -- was in a position to accelerate the collaborative process through better simultaneous visibility.”
Configurators, quotes and product design processes are becoming faster, as tools have embedded workflows that perform these processes in a simpler and more seamless way, becoming an integral component of customer relationship management (CRM).
“This acceleration of visibility is particularly critical in the high-tech industry where a product’s shelf lifetime is often less than six months,” adds Andaluz. “The time between a manufacturer having a new product idea and the launch to market may be around three months or less. Integrating technologies such as our enterprise social network Yammer is one way of collaborating and sharing with trading partners that may also help shorten timescales.”
What, then is holding manufacturers back from achieving this and how can they overcome these challenges? “They are working in a complex environment with many different stakeholders and sometimes they don’t own the complete network,” says Siemens PLM Software’s Marfa. “PLM systems such as our Teamcenter platform can help them reach every supplier or dealer in the network on a common platform. “Manufacturers also need to have a system that can manage all of the service information – a backbone upon which to base all of their service operations. This means that they have to connect all their dealers to be able to service all the parts and respond to requests from the customers. On top of that they can apply other strategies such as requirements management, where they track what customers want in order to make good decisions about whether products should be serviced or designed in a different way.”
Andaluz says: “Companies not moving to leverage all these kinds of capabilities are hindering their progress in building and selling better products or improving servicing. Today, through embedded sensors, predictive analytics and customer behaviour monitoring, manufacturers have the ability to engineer better products that carry a greater value proposition to the end customer. Smart manufacturers will use these tools to monitor performance and fine-tune the operating conditions of their products. This enables improved quality, product lifetimes and also customer intimacy.
“The Microsoft contribution is the platform for infrastructure, application development, collaboration and natural-user experiences,” he adds. “Devices, security and access to information are the relevant elements when thinking about the cloud and how information is moved around. Business intelligence tools provide manufacturers with predictive analytics capabilities that make Dynamics CRM not only a traditional sales tool, but the service and marketing tool that unifies the functions of the sales, marketing and service representatives (reps) into the ‘advanced rep’ who engages more deeply with customers.”
Microsoft is helping the traditional rep to become advanced and highly proficient by establishing seamless interoperability across CRM and Yammer in its latest Dynamics CRM 2013 release, which will be augmented by marketing and customer analytics capabilities from its recent acquisitions.
“The revolution is not in connecting the processes or assets, but in the amount of useful information people can share by fast computing through the cloud. It is those elements that are changing the way the advanced rep will provide differentiated service,” he concludes.
This article was originally published in the Winter 2013 issue of Prime