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Digital Service Transformation: Shift Service from a Cost Center to a Differentiator

While companies have turned to digital transformation to discover, create, make, and sell better products, service has traditionally been an afterthought. In pursuit of getting the biggest bang for their buck with digital investments, companies have placed more focus on use cases enabling them to deliver new and innovative products to market faster. Less attention has been placed on service models, which many companies look at as a cost center.

For Original Equipment Manufacturers (OEMs) that manufacture complex capital equipment that sits in a hospital, manufacturing plant or other industrial setting for multiple years, optimizing the way those products are serviced, updated and upgraded can actually be a competitive differentiator.

Service optimization re-invents traditional service roles and processes with remote service, advanced analytics, and extended reality (XR). This portfolio of innovative solutions spanning people, process, data and technology comes together to increase operational effectiveness and create strategic product differentiation, (as shown in the graphic below.)

Throughout the rest of this article, we will discuss how to create step change in your service model be exploring three “how might we” questions.

  1. How might we transition from on-site service to remote monitoring and maintenance?
  2. How might we equip service providers to deliver superior outcomes when full remote servicing is not an option?
  3. How might we measure and continuously improve service models with data-driven insights?

How might we transition from on-site service to remote monitoring and maintenance?

The earlier an OEM can identify equipment issues the better equipped they will be to drive business value for their end users. This means equipment uptime will be the new key performance indicator (KPI) customers use to evaluate OEMs and the equipment they sell.

A digital twin of a product—which is a virtual representation of a product with real-time data—allows OEMs to provide proactive and value-added services to address equipment uptime. Depending on the product and digital twin sophistication, a remote service model may include remote access, software content management and predictive maintenance.

Remote Access

Companies that manage and service devices remotely to meet customer demands for quick responses and service-level agreements (SLA’s) while maintaining equipment uptime. Digital twins with real-time data help elevate the services model with expert remote assistance and/or by enabling over-the-air software updates and predictive maintenance.

Over-the-Air Software Updates

Most connected devices today run some form of operating system and software. There is no doubt that most devices will last longer than the version of software they were provisioned with, and there will be security patches and bug fixes along the way. Over-the-air updates create packages to address these issues for immediate deployment or at a scheduled time in the future.

Predictive Maintenance

Predictive maintenance techniques can monitor and analyze device properties to identify potential problems before they cause a shutdown. This can also reduce maintenance costs because maintenance can be performed when it is needed rather than simply scheduled.

The strategic implementation of remote access, over-the-air software updates and predictive maintenance drives many benefits, including:

  • Reduced costs and risks associated with on-site service – up to 83% less time on-site
  • Reduction in unplanned downtime – up to 30%
  • More effective preventative maintenance – up to 47% [1]

Even before 2020, market expectations for service in a digital age were transforming. The COVID-19 pandemic has introduced new operating constraints that have accelerated both the expectations and the transformation. Companies must reduce COVID exposure to protect field service engineers and customers.

It’s intimidating to re-evaluate and change service protocols, but today’s real-world health risks demonstrate the value provided by any extra level of protection.

For example, a leading medical equipment manufacturer has tens of thousands of instruments with embedded software deployed globally in hospitals and clinics. With the onset of a new disease, these instruments will require updates to test for new-to-the-world antibodies. In order to quickly and efficiently deliver these updates, as well as limit exposure of field service technicians, the updates need to be delivered remotely and over-the-air (OTA).

Demand for OTA software also stretches beyond COVID-19. Pressures to introduce new features or functions, patch bugs, apply additional security measures and maintain compatibility with other devices, software, and operating systems were also drivers behind this medical equipment manufacturer’s investment.

Despite the move to more remote services, some level of on-site service will remain a constant for the foreseeable future—while the challenges of on-site service continue to evolve. This brings us to our next question.

How might we equip service providers to deliver superior outcomes when full remote servicing is not an option?

Aside from the already massive operating constraints of the “new normal,” service calls and visits have already become more complex as assets with more technology elements are deployed at customer premises.

These new complexities have increased the need for holistic solutions that bring together real-time information, dynamic visualization capabilities and remote support. We consider the application of these solutions through two primary lenses—the field service technician and the end user or customer.

Field Service Technician Enablement

Ensure that those in the field have the right tools, expertise and support while on the job. Employ XR technologies, such as augmented or virtual interactive experiences, so on-site personnel can benefit from XR-enabled training before the truck rolls and remote experts can extend expertise to boots on the ground.

Enabling field services teams this way increases knowledge retention through visual representations of complex processes and equipment. It can also provide on-demand expertise through remote assistance via tablets or devices in certain scenarios.

End User (or Local Technician) Self-Service Empowerment

Reduce on-site service costs and problem resolution times by empowering customers to self-service with the right devices and solutions. Today's remote service solutions can be tailored to provide precise guidance to end-users.

A recent survey indicates this is more important now than ever, with 40% of end users now choosing to receive setup instructions on their mobile device and 71% preferring visual guidance self-installation methods. [2]

Together, optimizing service by increasing on-site technician efficiency and empowering customer self-service can lead to:

  • Extending product service expertise and knowledge transfer across field service staff and customer base
  • Empowering field operators to perform increasingly complex tasks, regardless of the experience level, through remote assistance enabled by XR
  • Faster first-time fix rates and customer service outcomes

These benefits are more than hypothetical—organizations are already seeing real, quantifiable results today.

As an example, Xerox has taken a holistic approach to enabling experts, field service technicians and customers. They use augmented reality (AR) to connect field engineers and customers with experts instead of providing service manuals and telephone support. From a field engineer perspective, this led to 67% and 20% increases in first time fix rate and engineer efficiency, respectively.

At the customer enablement level, the rate at which technical problems are resolved by customers without any on-site help increased by 76%, while also cutting travel costs for Xerox and minimizing downtime for customers. Customer satisfaction rates have risen to 95% as a result.[3]

From remote capabilities to enabling technicians and customers on site with XR-based solutions, service resolution can be delivered in several different modes. But like any strategic initiative, continuous improvement relies on data and insights. This brings us to our third and final question.

How might we measure and continuously improve service models with data-driven insights?

Advanced analytics blends inter-device connectivity and real time monitoring with predictive and prescriptive insights. These data-driven insights lead to improved decisions and preemptive service actions.

For example, if insights indicate that certain parts are frequently serviced or replaced, a company can take action to optimize warranty and product service costs. They may even prescribe design changes for the next version of the product.

Similarly, first-time fix rates and mean time to repair (MTTR) metrics can lead to better maintenance procedures. They also increase the understanding of specific technician skill levels and expertise for more targeted future training. User engagement metrics of the service application (XR or others) will also provide valuable insights on friction points related to user experiences, providing opportunities for continuous improvement of the service application as part of service optimization.

These insights are essential to continuously measure service model improvements and take a data-driven approach to continuously respond to evolving market expectations.

Practical steps to advance maturity from any starting point

Optimizing a service model is a multistep process that requires collaboration across a service organization and its related functions. Below are some actions to lay the foundation for step change, regardless of current maturity.

Understand current state relative to peers

Have you…

  • Completed a diagnostic to assess internal capabilities spanning people, process, data and technology?
  • Benchmarked against industry peers?
  • Conducted a technical and organizational readiness assessment to advance to your next maturity stage (regardless of starting point)?
  • Gathered baseline data and insights that will inform business case, roadmapping and future continuous value tracking efforts?

Develop and maintain comprehensive business case and roadmap

Have you…

  • Taken your business case beyond a generic set of outcomes?
  • Established key value realization and drivers aligned to the strategic imperatives of your organization? Included hard dollar, productivity, and intangible benefits in your value story?
  • Developed user personas to tell the value story in a “day in the life” context?
  • Maximized a path to value with a phased roadmap respective to your current state and value drivers?

Deliver continuous change campaign

Have you…

  • Assessed stakeholders to identify potential influencers, resistors and influencers and to understand their respective motives and value drivers?
  • Developed a platform of thinking that communicates and sells executives and stakeholders on the compelling reason for change?
  • Formally established executive support, accountability, and expectations with a governance model?
  • Established incentive structures for early adopters and evangelists?

Whether you are at the stage of adding smart sensors to your end user product / equipment or already reaping the benefits of predictive maintenance and an enterprise-wide library of XR experiences, these actions can help you plot your next step forward to a state-of-the-art service model.

As you tackle new service complexities and prepare for an increasing wave of smart connected products, now is the time to equip your organization with the tools and capabilities necessary to increase operational effectiveness and create strategic product differentiation.


  1. Connected Field Service Productivity | Improve First-Time Fix Rate | PTC
  2. Home Electronics Self Installation Survey Report - Complete Results (
  3. Harvard Business Review: Why Every Organization Needs an Augmented Reality Strategy, Nov 2017

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