White Paper

The Shift from Reactive to

Proactive Service with
Data Analytics and
Internet of Things

Coresystems AG
www.coresystems.net
White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

Content
Executive Summary 3

1. Introduction 4

2. Data Analytics 5

3. Uniting Data Analytics and the Internet of Things 6

4. The Effect on the Field Service Business Model 6

5. Sources of Data 7
IoT Data Sources 8

6. Using Predictive Data Analysis in Field Service 9

7. Using Prescriptive Data Analysis in Field Service 10

8. Preparing for Data Analytics 11

9. Challenges 12

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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

The Shift from Reactive to Proactive Service

with Data Analytics and Internet of Things

For the Field Service Executives, COOs and CMOs of larger organizations provi-
ding customer field service management

Executive Summary
Many industrial organizations have historically been very successful at what they do,
building up a loyal user base that has provided a regular revenue stream for many
years. However, many companies are now experiencing a change in the landscape,
with less equipment being ordered and new competition from China and other
emerging markets. In order to continue being successful, field service needs to adapt
to this new environment. With the right level of investment and a new proactive ser-
vice strategy, field service can be a rich source of new revenue and brand loyalty.
Some industries have started modernizing their service departments, but most cus-
tomer service teams are still focused on fixing problems and standard maintenance.
Instead, they could be offering proactive services, powered by advanced and automat-
ed data analytics that predict when maintenance will be needed, based on the specific
requirements of each site. Field service can move from a cost-center to a profit center
offering premium priced, personalized services.

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 White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

1. Introduction
Over the last few years there have been big changes in the technology that supports
field service teams, but the next revolution is just over the horizon. In fact, two tech-
nological advancements will change the landscape of many industries: data analytics
and the Internet of Things (IoT). These technologies will turn manufacturers and
field service organizations’ business models upside down.
Manufacturers, energy providers and even small enterprises and their customers are
facing an unpredictable business environment with increasing costs, lower budgets,
higher customer expectations and more regulation. There is pressure to squeeze ev-
ery ounce of productivity out of capital equipment and reduce downtime to the bare
minimum. An Aberdeen Group Analyst Insight report, ‘Asset Management: Using
Analytics to Drive Predictive Maintenance’ which surveyed 140 executives, noted that
40% of respondents were under pressure because of reduced budgets, and 37% had to
further maximize the return on their assets.
Data analytics and the IoT present manufacturers with the opportunity to offer
revolutionary services that will change how their installed equipment is maintained
and managed on a minute-by-minute basis, automatically.
The field service team cannot only take responsibility for general maintenance, but
real-time tuning and optimization. As a result, the customer could outsource the
management of equipment back to the manufacturer.
When field service has data analytics capabilities built in to its cloud-based software
system that is connected to IoT sensors, then it can forecast when issues of compo-
nent failure, efficiency, and even product quality are likely to arise. It can then make
recommendations to fix the problem. The system makes its decisions based on the
history of thousands of similar cases, applied to a specific installation.

40%
Top Pressures
Driving Focus on
Asset Management 37%
28% 25%
No. of respondents: 140 17%
Source:
Aberdeen Group, November 2012
Reduced opera- Need to maxi- Reduced capital Rising material Aging assets
tional budgets mize Return on budgets (e.g. cost
Assets (RoA) limited invest-
ment in new
equipment)

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 White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things
Definitions
Data Analytics: The use of
a computer to analyze huge
amounts of raw data in bulk to
predict outcomes and recom-
mendations for action to avoid
those outcomes.
Big Data: A broad term, refer-
ring to the huge amount of data
that can be collected now and
the use of software to provide
insights and predictions that
would be impossible manually.
M2M: Short for direct “ma-
chine to machine” communi-
cations, for instance to enable
a computer to remotely inspect
and control a machine on the
factory floor.
IoT: The “Internet of Things”.
Enables virtually any device to
connect to a data network and
allow it to be monitored and/or
controlled.
Streaming Data: Live mon-
itoring (e.g. of equipment)
produces a constant “stream”
of data into the computer that
must be analyzed instantly as it
comes in.
2. Data Analytics
Data analytics or Big Data is rapidly maturing in industries such as telecommunica-
tions and retail. A software system with access to the complete history of thousands
of installations and components can forecast failures, such as when unit efficiency is
likely to degrade and when production quality might be affected.
Some industries have been transformed already by incorporating data analytics into
their standard processes. To give an example, telecom companies can forecast traffic
patterns, peak period bottlenecks, commercial versus domestic split, and thus per-
form real-time optimization of their voice and data networks. They can route around
congestion to improve performance and the whole customer experience. They take
constant readings from their network data switches and build a big database of all
their devices and customers to get a holistic view of the complete environment.
There are four different levels of analytics, as shown in the table below.
The Levels of Data Analytics
Descriptive What happened?
Past
Diagnostic Why did it happen?
Predictive What will happen?
Future
Prescriptive How can we prevent it?
Ongoing descriptive and diagnostic analysis is necessary to build a database of events
that can be used to make decisions based on the future. Predictive analytics will at-
tempt to decide if a particular event is likely to happen. For instance, will a certain
component fail in the next month? Is efficiency likely to go down in the next week?
Will a change in the production profile impact things such as efficiency, energy usage,
product quality, etc.? If the predictive analysis forecasts an issue, then prescriptive
analysis can recommend a course of action. That could be anything from scheduling
the replacement of a component to adjusting settings to even upselling new products
and personalized services.
If the equipment manufacturer creates the database and runs the analytics software,
then it can base its decisions on all of the installations it has, improving accuracy. To
help make the data more specific, each customer or site can be profiled according to
usage. The software can then predict the likely future outcomes over various times-
cales and automatically recommend remedial action if needed.
Internet of Things
“The basic idea of the IoT is that virtually every physical thing in this world can
also become a computer that is connected to the Internet [ITU, 2005]. To be more
accurate, things do not turn into computers, but they can feature tiny computers.”
Prof. Elgar Fleisch, 2010, Institute of Technology Management, University of St. Gallen
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 White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things
Gartner defines software as
a service (SaaS) as soft-
ware that is owned, deliv-
ered and managed remotely
by one or more providers.
The provider delivers soft-
ware based on one set of
common code and data defi-
nitions that is consumed in
a one-to-many model by all
contracted customers at
anytime on a pay-for-use
basis or as a subscription
based on use metrics.
Source: www.gartner.com
3. Uniting Data Analytics and the Internet of Things
In this context, the Internet of Things means networks of sensors and smart devices
that continuously monitor any aspect of the equipment on-site and feed the resulting
data back to the data analytics software. This has some major benefits. It means that
any forecasts and recommendations by the analytics software are made not only from
industry averages, but also site-specific profiles and data measured directly on-site
and then factored in. For the manufacturer, it also means that a huge volume of real
historical data can be built up to make decisions even more accurate.
With smart sensors, the data analytics software cannot only forecast events, but also
make recommendations for pre-emptive action based on the success of previous ac-
tions and how they would work in each specific case. Low-cost smart sensors can
stream data in real-time to the analytical decision engines that are built into the field
service workflow, so that fast recommendations can be prescribed to avoid failures
and other negative outcomes.
Taking this model a step farther, the feedback loop can be closed by installing IoT
controller mechanisms and switches on site. This would allow certain recommended
actions to be enacted remotely. Fine-tuning or switching to backup components could
be done this way, the response time would be reduced to minutes instead of needing
to wait days for a technician to visit.
4. The Effect on the Field Service Business Model
The demand for data analytics is growing, being driven by reduced operations bud-
gets, the need to maximize the ROI of capital investments, reduced capital budgets
and higher energy costs amongst other reasons. This scenario is true for the custom-
er, the manufacturer and the field service organization itself, whether it’s based in the
manufacturer or in-house with the customer. It is driving a need to tighten up the
management of assets to not only reduce downtime, but also improve efficiency and
maintain quality.
A manufacturer-led, cloud-based system creates the opportunity for field service to
make decisions based on cross-industry data by the equipment experts. Field service
will become more proactive and efficient, avoiding more problems than it has to react
to, at less cost and higher contract pricing. The resulting improvements in the cus-
tomers’ business that are made possible by the field service team will give them a
competitive edge further down the value chain as they offer better priced, better
quality products to their customers.
The field service organization can now evolve into a truly cutting-edge profit center
by offering this new technology to clients in a premium, cloud-based ‘software as a
service’ model (see definition). It can offer personalized services that apply the
knowledge gained from thousands of prior actions to the specific client profile and
their stated goals.
Measure-
Profiles
ments
Raw data Raw data
Historical
Product
Mktg Uptime Quality
Dev.
Personalized Predictions &
Sales Prescriptive Actions Rol
Field Service
Manufacturer Client
Valuable insights & recommendations
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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

In addition, this model also allows field service to strengthen its position, offering a
premium service to both the customer and back to the manufacturer. On the one
hand, customers can benefit from less downtime, optimized inventory management,
and less dispatches. On the other hand, the rest of the company also benefits from
more and better quality data for sales, customer profiling, product development, up-
selling, cross-selling, targeting, brand reputation, and more. Field service sits be-
tween the manufacturer’s operations and the customer’s operations, providing value
to both. Field service can transform from being purely technical to dealing primarily
with knowledge, a much more valuable commodity.

5. Sources of Data
The more data that analytics software can analyze, the more accurate its predictions
and recommendations will be. There is a great selection of valuable data within both
the manufacturer and the client, such as the product’s technical database, accounts
database, CRM, service reports, IoT sensors, etc. Structured data (e.g. databases,
spreadsheets) is easier to analyze, but there is just as much value in unstructured data
if you can access it, know what you’re looking for, and how to make decisions based on
your findings.

Typical Sources of Data to Be Analyzed

Structured Unstructured

Product data such as tolerances, Call center notes such as queries, com-
component limits, operating ranges, plaints, frequently asked questions
operating life expectancy
»» Technician reports: warnings,
»» IoT sensor readings: real-time recommendations, replacements
streams and historical trends (see »» Social media: feedback on prod-
below) ucts, questions, sales queries
»» Usage history: production cycle »» Multimedia: pictures or videos of
counts, operating hours, mileage components
»» Financial data: component costs, »» Customer feedback: online prod-
technician costs, energy costs, parts/ uct reviews, quality targets
product pricing, training pricing,
payments
»» Client profile: quality goals,
productivity goals, energy consump-
tion, number of units and sites,
business hours
»» Field service records: failure
rates, maintenance schedules, ser-
vice periods, call center records

All in all, the software can use the data to:

a) construct a profile for each client that enables the software to personalize de-
cisions,
b) build up an overall picture of how different products behave in different client
profiles.

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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

IoT Data Sources

IoT sensors provide an ongoing stream of data that can alert management to immedi-
ate problems, but they also build up usage history over time. Historical data can be
used to find patterns of behavior across similar clients when diagnosing problems or
trying to recommend a solution.
Similarly, when the data analytics software is analyzing the data stream in real time,
it could be looking for sudden spikes or other changes in the data, or trends over time
that match those seen on other sites. Taken in the context of that site or client profile,
they could point to a simple recommendation to fine tune, or detail extra action to be
planned in the next maintenance visit, or in extreme situations, suggest emergency
maintenance before imminent failure.

Data From Internet of Things Sensors

Some examples

»» Machine readings: temperatures, tolerances, humidity, fluid levels, pressure,

sound levels
»» Counters: operating cycles, mileage
»» Energy consumption: diesel, gas or electricity
»» Geospatial data: GPS coordinates, distances
»» Production output quality measurements: images, pollutants, fail rate

The sensors can produce an incredible amount of data, however, the right systems
need to be in place to manage it. A research report by the Aberdeen Group ‘Asset
Management: The Changing Landscape of Predictive Maintenance,’ which surveyed
149 executives, organizations using IoT, reported an average of 30% data growth year-
over-year, but 54% of organizations said their data analysis capabilities are insuffi-
cient. A cloud-based software-as-a-service system offers an immediate solution.

C C C C
The Service of Things

Connect Collect Correlate Collaborate

The 4 Vs of Big Data

VVVV
Internet of Things

Volume Variety Velocity Veracity

Scale of Data Different form Analysis of Uncertainty of Data
of data Streaming Data
40 Trillion Poor-quality data
Gigabytes of data In 2020, wearables Quarter billion is costing on
will be created by will exceed 500 connected vehicles average
2020. million shipments. by 2020. $14.2 million.

Analytics Value

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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

Sensor data can quickly warn of problems ahead, but only if the warning is delivered
to the right person in time for action to be taken. This is when the field service work-
flow and the analytics software must be capable of receiving a real-time stream of
data, so the right alerts can be raised immediately. In the same report, Aberdeen
Group found that 56% of real-time streaming data systems users were satisfied with
the speed of information delivery compared to just 25% of other users.

The Impact of Streaming Data Streaming data integration and analytics

All others

75 %
60% 58% 62%
40%
25%

Frequency of access to % of users satisfied with % of users that improved

timely information the speed of information speed of decision making
delivery YoY
n=692 Source: Aberdeen Group, February 2015

6. Using Predictive Data Analysis in Field Service

Predictive Data Analysis forecasts future events by comparing the current situation
and trends against a combined database of historic events and operating parameters.
Decisions can be made based on the history of all installed similar products and com-
ponents in similar usage profiles and patterns. Once a forecast has been made, it is up
to the management and staff to decide on the correct course of action.
When IoT sensors are added to the above environment the predictions become much
more accurate and timely. Decisions can be made faster and with more granular data
than by only relying on industry averages and data recorded on technicians’ visits.
Predictive Data Analysis has many benefits for the customer, the manufacturer, and
the field service organization itself.
Benefits for the Customer:
− Receive a warning when the end output product quality may likely suffer due to
component wear or other factors, e.g. higher throughput.
− Receive a warning when equipment productivity is likely to be reduced.
− Receive a warning when operator safety might be at risk.
− Receive a warning when maintenance is required that may lead to production
downtime.
− Predict likely changes in energy consumption, for instance, changes due to
equipment age or higher production rates.
− Predict when components will reach the end of their life sooner than average,
so they can be replaced before catastrophic failure.
− IoT sensors monitor for sudden changes that may cause earlier failure or lower
performance than expected.
− IoT sensors increase personalization and accuracy of decision-making.

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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

Each of these forecasts can result in several outcomes. A technician may need to at-
tend to a situation urgently, additional steps can be added to the next scheduled
maintenance, the client could carry out some fine-tuning to optimize the equipment,
training can be offered, or salespeople can engage to recommend new products.
Benefits for the Manufacturer:
− Feedback on product development for future improvements;
− More detailed customer profiling in marketing campaigns;
− Flag sales opportunities such as replacements, upselling, cross-selling, further
maintenance contracts.
Benefits for the Field Service Organization:
− A more holistic view of the installation and client;
− Higher value and more personalized services enable premium pricing;
− The field service team becomes more of an outsourcing partner for equipment
management;
− A higher percentage of scheduled service jobs within the contract raises profit-
ability;
− Better forecasting of spare parts;
− Better project management according to the field team’s skills;
− Less time spent onsite recording measurements and diagnosing problems.

7. Using Prescriptive Data Analysis in Field Service

Prescriptive Data Analysis Software goes to the next step after forecasting likely is-
sues and recommends what action to take. The decisions are based on huge amounts
of data from past actions and their outcomes at sites with similar usage profiles. The
decision-making process is consistent and does not rely on staff’s opinions or hearsay.
IoT devices can be controllers as well as sensors. This means that the software could
be empowered to automatically adjust settings remotely with a quick human approv-
al, if needed. Share trading in stock exchanges has been automatically run by comput-
ers for many years, as have airplane flight systems, so the principle of software con-
trol in high-risk environments is well established.
This type of software brings many benefits.
Benefits for the Customer:
− Less downtime and better optimized, more efficient equipment;
− Recommendation of alternative equipment based on usage profile/run rate;
− Real-time analysis of usage and recommended preventative actions to avoid
failures;
− Reconfigures equipment remotely in real-time;
− Remote shutdown of equipment, if safety of operators is at risk;
− Increases ROI of customer’s capital investment and overall productivity of the
business, making it more profitable and competitive;
− Adds value to the client’s service offering meaning they have better sales mes-
sages to give to their customers further down the value chain.

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White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

Outcomes might be:

− New field parts to be fitted and reconfigured at the next maintenance window;
− Optimization based on the site’s usage profile;
− Possibility to recommend upgrades or cross-sell new products for reliability,
productivity, safety, or energy usage reasons.
Benefits for the Manufacturer:
− Recommend marketing campaigns (e.g. upselling, cross-selling) to specific mar-
ket segments;
− Recommend product adjustments for specific market segments and profiles of
customers;
− Recommend pricing adjustments for profitability and/or market share.
Benefits for the Field Service Organization:
− Faster problem resolution that involves fewer staff members;
− Spare part ordering is informed by analytics on-demand;
− Automatic rerouting of technicians based on real-time alerts;
− Increased technician productivity through more accurate prediction of visit
requirements and resources required;
− Automated decision-making, allowing technicians to get to know their clients
more closely.

8. Preparing for Data Analytics

Implementing a new Data Analytics software solution requires time and care, plus
access to large amounts of data. A manufacturer’s customer may consider implement-
ing their own software, but signing up for the manufacturer’s cloud system lets them
get up and running much faster. Customers benefit from great amounts of industry
data and the expertise of the product experts.
However, even with a cloud-based system there are a number of preparatory steps
that must be taken:
− To get the most benefits, accept the need to move away from data silos held by
local teams or departments to creating a central database accessible by all staff
(with permission according to the role). Only then can the analytics software
take a holistic view when making predictions and recommendations.
− Build real-time data streaming and automated analytics decision-making into
the standard field service processes and workflow.
− Create a secure central database accessible by machines and humans on de-
mand.
− Use data strategically to improve product and process reliability.
− Move the field service business model from reactive maintenance to outsourced
predictive and prescriptive maintenance.

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 White Paper: The Shift from Reactive to Proactive Service with Data Analytics and Internet of Things

9. Challenges
Data Analytics and remote decision-making raise questions about security, liability,
and quality control that the industry as a whole must address. Delays in standing up
to those responsibilities will not stop technology advancing, which will be good for
those taking first-mover advantage.

Challenges for Data Analytics

Understand the data Data is information and ultimately knowledge. Some

of the challenges are deciding what data to gather,
how to gather it and understanding what it means.

Privacy and security With tough new EU rules on citizens’ privacy and
increasing numbers of cyber-attacks, ensure you un-
derstand your responsibilities and can meet them.

Ownership and legal Who takes responsibility for actions that are recom-
liability mended by the manufacturer’s software? Who owns
data collected by 3rd party sensors?

Compliance Especially in heavily regulated industries, it is

important to be able to show the decision-making
processes.

Integration of Signing up to a cloud-based system will often make

multiple systems of this easier, but care must still be taken with data
sensors, 3rd parties, integrity.
internal databases,
client databases

Coresystems
CH: +41 56 500 22 44
DE: +49 761 887 95 777
USA: +1 (415) 887-1944
www.coresystems.net
About Coresystems
Coresystems is a leading provider of mobile and cloud-based field service and
workforce management software for mid-sized and large enterprises’ field service
organizations. Since Coresystems’ founding in 2006, more than 190,000 users
across the world have utilized Coresystems’ innovative, real-time field service
management software to improve their business and field service processes. Core-
systems has also pioneered “crowd service” – which allows customers to leverage
an Uber-like platform to find available field service technicians in real-time. Core-
systems is headquartered in Switzerland with international offices in San Francis-
co, Miami, Berlin, Freiburg, Shanghai, São Paulo and London.

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