With everybody talking about predictive analytics, what should I do as manager of an aftermarket division?

Before launching any project, one should carefully evaluate one’s current and projected future position with regards to aftermarket services; are these critical to your competitive offering or not? Some companies choose to sell their goods and leave aftermarket services to third parties – i.e. the traditional automotive business model. Fair enough although even traditional approaches get challenged regularly – either by opportunity (i.e. to increase grasp on the customer or increase margins) or by obligation (competitor offers the service, so should I).

Whatever the reason or current position vis à vis predictive maintenance models, slowly but surely, the market is evolving in the direction of these approaches. So the question is not so much ‘if’ but rather ‘when’ one should launch a PdA project. Here, too, I would like to propose two main drivers for determining the right moment: maturity and opportunity. 

Let’s start with the latter: opportunity. Innovation is more often than not the driver for competitive advantage and great leaders know this. This is why many CEO’s get personally involved in launching PdA projects: they’ve understood the competitive edge this may give them over less capable players. While traditional approaches still operate reactively, forward-looking companies want to provide their clients with tools or services which tell them when and how they should maintain their equipment to guarantee optimal productivity. This can be delivered pro bono, purely as a competitive advantage or through gain-share models such as PBH (Power By the Hour) or PBL (Performance Based Logistics). 

Maturity is another factor playing a major role in deciding whether or not one’s company is ready to embark on a transformation from reactive to proactive support. Maturity should be checked on an organisational level (change management will be key!) as well as on a structural level (do we have the data/infrastructure to drive this transformation?). Because the move towards proactive aftermarket models is so transformational, more and more business adopt an approach which lowers the project risk:

  • flexibility: these projects are run in the cloud in order to avoid huge upfront infrastructure investments
  • speed: beware of projects requiring many data scientists – results should pop up in weeks and not months
  • applicability: projects should provide actionable results, not just forecasts

This modular approach allows companies to embark on PdA projects without sinking millions of dollars and a lot of company time in projects which deliver half-baked results. A friend of mine who leads a large consulting practice recently told me it is for the similar reasons they get more requests now for best-of-breed solutions than for big roll-outs from top vendors: speed, flexibility, commitment (every customer matters more to BoB vendors), expertise.

To conclude: whether or not you decide to wait will probable not change your company’s maturity level very much but it will have a huge impact on the opportunity as there’s bound to be a competitor already in the works with a PdA project. So, besides not being about ‘if’, I don’t think ‘when’ is a real option either. Just be smart about ‘how’ you approach this subject; start with a limited, small-scale project to determine what works best for your business. But above all: get moving!