A Connected Service is a service offered to the customer of a connected product, made possible, or enhanced, by the data that such product generates.
The key: harnessing data
The basic principle behind a connected service is to harness the data generated by the connected product to expand the value proposition for the customer while at the same time keeping under control or reducing the costs and risks involved in the provision of the service.
Several elements can make up the value proposition of a connected service offering.
Digitally-enabled Services vs Digital Services
At first, we distinguish:
Digitally-enabled services: “traditional” service offering element, such as repair or maintenance services, that are enhanced, and thus made more effective and/or efficient, through the use of data and digital capabilities
Digital services: purely digital service elements, which customers can access in self-service mode through a web or mobile interface
The Connected Services staircase
We can represent the elements that make up a connected service offering by exploiting the services staircase by Advanced Services Group. This staircase summarizes the main elements of a service offering and classifies them according to two dimensions:
a vertical dimension, in which value grows because the service moves closer to delivering outcomes
a horizontal dimension, in which value grows because the provider takes on more risk and responsibility
Building on this idea, we can represent the elements of a connected service offering.
Digitally-enabled services are the “connected” version of the elements represented by the service staircase
Digital services, on the other hand, are a new type of offering that sits alongside the “traditional” offering. They too can be distributed along the vertical dimension, according to how well they support the customer to achieve outcomes. Each “traditional” offering element can correspond to a digital service element. Regarding their placement on the horizontal axis, digital services are at the lowest value because there is no risk absorbed by the provider.
Elements making up a Connected Services offering
Now let's take a look at each element.
Digitally-enabled Services
Digitally-automated spare parts supply
This is the “connected” version of the “Product spares” element in the services staircase. You leverage IoT data (particularly those indicating the wear and health of spare parts and the level of consumables) and digital capabilities (such as e-commerce and order management) to streamline and even automate and make recurring the supply of spare parts and consumables. In other words, through this element you implement “Machine Customers”.
Reactive connected maintenance
This is the “connected” version of the “Product break / fix” element in the services staircase. You react to failures and restore the condition of products in shorter time thanks to remote diagnostics, guided troubleshooting and remote configuration.
Proactive connected maintenance
This is the “connected” version of the “Assured maintenance” element in the services staircase. You guarantee your performance in restoring the condition of products thanks to proactive monitoring and smart maintenance plans.
Connected performance advisory
This is the “connected” version of the “Performance advisory” element in the services staircase. You guide the capture of more value from products thanks to your knowledge and experience, augmented by the insights you get from data.
Connected outcome-based contracts
This is the “connected” version of the “Customer asset capability” element in the services staircase, the first element in the “advanced” segment. You guarantee the outcomes from products thanks to proactive monitoring, smart maintenance plans, data insights and objective, data-based, risk analysis.
Digital Services
Remote monitoring & control
You allow your end customers to remotely monitor and control their product and receive notifications about relevant events.
Spare parts & consumables monitoring
You allow your end customers to remotely monitor the wear and health of spare parts and the level of consumables
Guided troubleshooting
You give your end customers digital capabilities, such as guided troubleshooting procedures, that support them in solving issues autonomously.
Aided maintenance
You give your end customers a digital system that recommends the best time to perform a maintenance task, based on usage or conditions.
Digital performance advisory
Offer your customers synthetic and practical information, detailed analysis, and useful suggestions on relevant topics such as usage, performance, and consumption.