Manufacturers are looking to make their service more efficient and more profitable. Adopting remote service capabilities allows OEMs to move from vendor to partner, building customer trust along the way.

1. BUILDING THE
BUSINESS CASE FOR
REMOTE SERVICE
Jim Sweeney
VP Solution Management
October 20, 2016

2. 2
Why?
• Markets trends
• Service challenges
BUILDING THE BUSINESS CASE FOR REMOTE SERVICE
What?
• Driving Use Case
• Metrics
How?
• Sample framework
• Customer scenarios

3. 3
1 WHY?

4. 4
THE WORLD IS MOVING TO SMART CONNECTED PRODUCTS
Estimated potential economic impact of The Internet
of Things in 2025, range from $2.7 – 6.2 trillion annually
– McKinsey Global Institute
$6.2T #1
Manufacturing industry will be the #1 industry
sector by share of global economic value-add.
– Forecast: The IoT, Worldwide, 2014
Smart, connected products will give rise to the next era of IT-
driven productivity growth at a time when the impact of earlier
waves of IT has largely played itself out.
– Harvard Business Review, November 2014
Jim Heppelmann
President and CEO, PTC
Prof. Michael Porter
Harvard Business School

5. 5
MY SMART CONNECTED PRODUCTS
IOT is already changing your personal experience, and it is also changing the business experience.

6. 6
WHY – KEY MOTIVATOR
-Keith Larson –VP Content Putman Media – Smart industry 2016

7. 7
IIOT CHANGING SERVICE APPROACHES
Remotely access, diagnose and
service your equipment
Connect your equipment directly
to your field service organization
Predict failures to improve uptime
for connected equipment

8. 8
SERVICE CHALLENGES TODAY
OEM Revenue & Profitability
• Losing significant parts revenue to competitors
• Reactive models and high cost on-site service
channels constrain EBITA improvement
• Technicians and customers struggle to identify
the correct technical information and parts
• High service parts inventory and logistics costs
relative to fill rate and availability targets
• Aging workforce limits ability to scale
Customer Retention and Satisfaction
• Customers demanding enhanced service and
outcome based contracts
• Customer total cost of ownership perceived
to be too high
• Poor service experience has a negative
impact on brand loyalty and customer
satisfaction
• OEM is a part vendor versus strategic partner
limiting ability to impact customer value
drivers
All while Service leaders are tasked with driving more revenue and
profitability for the Enterprise

9. 9
2 WHAT?

10. 10
WHAT IS THE DRIVING USE CASE
Business Reason
for Remote Service
• Remote access to assets for
monitoring, control and
troubleshooting to improve
service
• Reduce overall cost of
servicing assets, reduce
onsite service calls
• Improve process for
software updates for your
products
Primary User/Persona
• Call Center Technician
• Remote Service Technician
• Field Service Engineer
/Technician

11. 11
WHAT METRICS?
Possible Metrics
• Mean time to repair (MTTR)
• First time fix rate (FTFR)
• Service cost per customer
• Service contract renewal rates
• No fault found (%)
• Technician utilization rate (%)
• Reduced truck-roll (remote fix rate)
• Equipment up-time
• Warranty costs
• Service revenue
• SLA compliance

12. 12
3 HOW?

13. 13
• Simple approach – one
variable
• Assume 100 field technicians
with 2 on site calls per week
• 2 weeks vacation per year
• Assume 15% of trips can be
resolved remotely
• Could expand to other
benefits such as Improved
first time fix rates
FRAMEWORK – POTENTIAL SAVINGS
BASED ON UNNECESSARY TRIPS
Service Technicians 100
Calls per Tech/ week 2
Total Calls / Week 200
Weeks / Year 50
Total Calls / Year 10,000
Unnecessary calls 15%
Unnecessary trips 1,500
Cost / trip $1,000
Total Cost $1,500,000

14. 14
Business Reason
• Reduce cost and lost patient time
with remote diagnostics and
resolution
• Persona – Remote/Field
Technician
• Results
– Reduced site visits by > 20 %
– Reduced Mean Time to Repair
(MTTR)
• Next Step
– Investigating predictive service
CUSTOMER SCENARIO – MEDICAL DEVICE
Devices 20,000
Visits per year 72
Total visits / year 1,444,000
Cost / trip $2,000

15. 15
Business Reason
• Reduce asset downtime and field
service visits
• Persona – Remote/Field Technician
• Results
– 17% of issues resolved remotely
– Reduced asset downtime by ~15%
– Reduced Mean Time to Repair
(MTTR) to under 30 minutes
• Next Step
– Analyze usage data to better
understand asset performance
CUSTOMER SCENARIO – INDUSTRIAL
Devices 5,000
Visits per year 2
Total visits / year 10,000
Unnecessary Trips 10%
Cost / trip $500
Total Cost $500,000

16. 16
Buy
• Commercial solution meets XX% of your
use cases and requirements
• Subscription and implementation
(cloud) cost
Build
• Required development skills in house
• Desire to maintain and support solution
over several years
• Potential hidden costs – technology
changes
BUY VERSUS BUILD INVESTMENT
3 Java Engineers
Base Salary $ 125,000
Benefits @ 18% $ 22,500
Full Time cost $ 147,500
QA Engineer
Base Salary $ 85,000
Benefits @ 18% $ 15,300
Full Time cost $ 100,300
Total Team $ 460,000
6 months $ 230,000
1 Dev $ 147,500
1 QA $ 100,300
Ongoing Yearly
Cost $ 247,500
LABOR
TOTAL COST
SUPPORT COST

17. 17
CAPABILITIES TO CONSIDER
Capabilities
Track activities statuses
Audit trail/comments for activities
Workflow integration with activities
Integrations to knowledge management system
Secure remote connection
Multiple protocol support
Remote connection audit trail
Bi-directional file transfer
Accessible through Asset Manager
File upload, download, and deletion
File transfer history by asset
File transfer audit trail

18. 18
SUMMARY
1. Why – Smart Connected Devices
2. What – Use Case and Metrics
3. How – Saving and Investments

19. 19
Evolving Your Service Business in the Era of Internet of Things
In companion white papers, PTC looks at changes that are enabling
manufacturers to redefine service.
Download these white papers to learn how OEMs are achieving:.
SERVICE TRANSFORMATION: UNDERSTAND, ADVANCE, OUTPERFORM
http://www.ptc.com/service-lifecycle-management/service-transformation
IDC Sees Opportunity
in Product-Service
Systems
Service Transformation:
Evolving Your Service
Business in the Era of
Internet of Things

20. 20
THANK YOU
WATCH THE RECORDED WEBINAR ON-DEMAND:
HTTP://WWW.PTC.COM/SERVICE-LIFECYCLE-MANAGEMENT/REMOTE-SERVICE/REMOTE-SERVICE-WEBINAR
CONTACT A PTC SERVICE LIFECYCLE MANAGEMENT EXPERT:
HTTP://WWW.PTC.COM/SERVICE-LIFECYCLE-MANAGEMENT/CONTACT-US