While industry 4.0 technologies played a decisive role in the pandemic response at many companies, COVID-19 has also exposed frailties in those that have been slow to adopt digital change. As a McKinsey report, COVID-19: An inflection point for Industry 4.0 recently put it, there have been three distinct outcomes – “a win for companies that had already scaled digital technologies, a reality check for those that were still scaling, and a wake-up call for those that hadn’t started on their Industry 4.0 journeys.”
At the heart of industry 4.0 is data intelligence and the infrastructure that enables it. For many organisations, across a swathe of industries this has yet to be fully realised but what we have learned from the pandemic is that priorities need to change. While emphasis perhaps shifted from increasing productivity and reducing costs, to flexibility and agility in the workplace, there is now a realisation that the ultimate goal is improved customer experience. By using technology to create direct links with customers, organisations can build relationships that can feed entire strategies for future development.
For one company this is already a real goal. While global air conditioning leader Daikin admits it operates in a conservative industry, it was already focused on trying to build bridges with customers, pre-pandemic. The idea is to gain competitive advantage through data, a strategy the business set in motion about four years ago.
“We’ve been talking about predictive analytics for some time,” says Michael Trad, head of supply chain and IT at Daikin Australia and New Zealand. He adds that many organisations have had trouble in getting started because they don’t know where to start. For Daikin, it was a case of accessing and collecting data as soon as possible, knowing that in future, it would prove invaluable.
Daikin’s vision is to own the customer in the home and for an air conditioning business that would be no small feat. The key to this is the smart controller. It’s the vehicle that will enable the vision of basing product development, sales, service and end user experience on the personal needs of customers. By delivering outcomes, such as air conditioning personalised for each home, supported by data intelligence, Daikin can transform its entire relationship with products, services and customers.
The key ingredients for this are of course a connected infrastructure, enabling the business to ‘talk’ to devices remotely, via IoT networks, for example and the ensuing user data it generates. For Trad, it’s the lifeblood for Daikin’s future, data that can feed marketing and sales decisions and influence product direction and ensures customer satisfaction.
“We want this 360-degree view of the business to understand gaps and where to improve,” says Trad. “And our biggest gap at moment is customer data.”
Daikin is using the ServiceMax field service management platform to facilitate its 360-degree view of servicing and supporting customers and installed equipment. Industry 4.0 capabilities and the development of smart controllers and home sensors will, adds Trad, help solve this problem. It’s a self-fulfilling evolution, a circle of life for each customer that puts the customer front and centre in the minds of Daikin, something that would not be possible without its continued, data-driven transformation.
Service data is not just a missing piece of the jigsaw but a key piece that can add crucial intelligence around performance and profitability. But service data intelligence is also outpacing the executive skillset. Companies that do well are usually more diverse and have more diverse data sets.
The challenge for all organisations is understanding where that value lies and how to utilise it. There is so much data, from CRM systems, asset performance management, finance, logistics, HR and increasingly from remote devices through IoT. Throw in service data, which is becoming richer, smarter and touches just about every part of the business, and you have a recipe for success but only if you can read recipes.
For any business, looking for change post-pandemic, there are some key lessons to learn here. Any transformation should have an ultimate purpose, but that purpose should ideally revolve around customer experience and not cutting costs and focusing on productivity. If organisations connect assets and build towards an outcome-driven future of customer service and product provision, other aspects will fall into line. Costs will be justified, and productivity will increase through greater customer knowledge.
As more mobile devices and IoT networks, location technologies, interfaces, augmented devices and wearables proliferate across industries, so organisations have to readjust their strategies. The challenge for any organisation is where to start, although when you think about it, it’s not so difficult. All businesses should focus on the customer and with big data analytics derived from that proliferation of assets, it’s easier than ever before to make it happen.
Joseph Kenny is VP of global customer transformation & customer success at ServiceMax