As manufacturers increasingly adopt ‘as-a-service’ delivery models, how can they adapt to the new volumes of data this change will introduce?
The mechanics of manufacturing business models are changing, according to Microsoft’s 2019 Manufacturing Trends report. As the industry increasingly adopts ‘as-a-service’ models, our experts are interested in the impact on the way manufacturers collect, store and use their data.
In some types of manufacturing – like contract manufacturing – service-based models are not new. But as-a-Service (XaaS) is rapidly taking hold at more traditional manufacturers, too. It’s prompting investment in servitised versions of everything from design and simulation to maintenance and integration.
As manufacturers move from selling products to selling services, and their supply chains also become service and contract-based, the shift will introduce yet more data into an already-complicated ecosystem.
So, how can manufacturers cope with the incoming flood of data and apply intelligent analysis to it?
XaaS as the default model for manufacturers
Research by Capgemini has shown that product-as-a-service is a high priority for many organisations, with 47% of manufacturers naming 2020 as the year that all their products will be connected and capable of delivering XaaS revenue. And collectively, that revenue could be as much as $685 billion.
That’s partially down to the increasingly accessible pricing of sensors, which are predicted to reach $0.38 per unit in 2020, down from $1.30 in the early days of the technology in 2004.
As the Internet of Things gains traction in industrial settings and consumer products alike, sensors are getting smaller, more powerful, and require less energy to run, which means it’s significantly easier for manufacturers to embed them in products where it wouldn’t have been cost-effective previously.
66% of manufacturers are finding that the pressure to balance legacy products with new, connected products is having an impact on how they prioritise research and development work and resources.
If manufacturers want to find that balance – and continue to adapt as XaaS evolves – they will need to become far more effective in their data management.
Adapting to the data demands of XaaS
The Capgemini research also found that the most digitally-mature manufacturers are mostly likely to use insights from the connected product data they’re collecting to make intelligent choices about their businesses.
To do this successfully, they’ll need to extend that maturity to their data estate, as well as their manufacturing technology and back-end systems.
Most manufacturers will need to establish a new data strategy and implement an effective platform that will allow them to unlock the most business value from the new data sources XaaS will introduce, as well as all existing sources.
So if your manufacturing business is interested in making the most of the impact of XaaS, how can you adapt? Here are a few ways to get started:
- Take inspiration from the success stories: Certain subsets of manufacturing have been using an array of XaaS models for years. Identify the success stories from your market – and others – and examine which parts of their approach can be borrowed or adapted as best practice for your own organisation.
- Hire (or acquire) advanced data skills: If you’re working with new, non-traditional data sources at scale, it’s possible you won’t have the skills in-house to process and use the data effectively. You can either hire in new experts – which can potentially add a significant outlay to your operating costs – or you can bring in an external partner to provide support and knowledge sharing while your existing data team gets up to speed with the new requirements.
- Modernise your data platform: Adding extensive new data sources into an old, unoptimised data platform is likely to just waste time and resources. Take stock of the data estate you’re working with currently and identify the areas where processes can change to accommodate the new approach, and where you might need to bring in new capabilities entirely. (We talk more about the challenges of a legacy data estate – and how to overcome them – in our new data estate modernisation white paper.)
- Get ready to make new uses of data: Embracing XaaS means adopting a new approach to the product lifecycle. Rather than completing and selling a discrete object, there will be many cases where manufacturers are involved in updates, upgrades or even replacements after the product has reached the consumer. That means you’ll need to take the data you’ve collected from connected products, and use it to find ways to improve both the product and the way you support it through its lifecycle.
Building the foundation for servitisation
Whether you’re already seeing the impact of XaaS in your organisation, or if you’re just starting to weigh up the potential challenges and benefits of servitising your products, establishing an effective data foundation and practice is the first step to success.
At Adatis, we help organisations, across many industries, to prepare and adapt as the way we use data changes. From the platform you use to the way you produce business intelligence; our experts have the skills and experience you need to make the most of the XaaS opportunity in manufacturing. Talk to one of them today to see how we can help you.