Magazine Article | March 17, 2009

How You Can Benefit From Smart Services

Source: Field Technologies Magazine

Industry experts explain what Smart Services are and the various ways they can impact your business processes.

Integrated Solutions, January/February 2009

Remote monitoring is one of the many uses of M2M (machine-to-machine) technology. Companies can deploy an M2M solution that will allow them to receive data from various pieces of equipment to monitor the equipment's performance and health and often diagnose problems proactively. For example, I recently wrote a case study about convenience-store chain Wawa ( Wawa is using M2M technology to remotely monitor and control each refrigeration unit in more than 250 of its stores from a central location. By doing so, the company has decreased the frequency of on-site service calls.

Smart Services is when a company offers the functionality of remote monitoring and diagnostics as a service. So, rather than implementing an on-premise M2M solution like Wawa did, you could take advantage of M2M technology either by offering it as a service or by reaping the benefits of that service. According to Marc Petock, VP of global marketing and communications at Tridium, a global M2M company, the uses for and benefits of M2M (including Smart Services) are far-reaching. "Today, there are approximately 50 billion machines worldwide that can incorporate M2M technology. By 2020, there will be more than a trillion," he says. In addition to Petock, I spoke with Steve Pazol, VP, global Smart Services, Qualcomm Enterprise Services, to help you fully understand the benefits Smart Services can offer.

Smart Services 101
As previously mentioned, there are two ways to view Smart Services, one of which is if you manufacture a product or provide a service for which offering Smart Services could add to your bottom line. "Smart Services provide a two-way link between product manufacturers and their customers, enabling the manufacturer to gather usage and behavior information to proactively respond with maintenance and repair and to provide value-added contextual information," says Pazol. To illustrate, I'll refer to an article I wrote on Varian Medical Systems ( Varian manufactures and services medical systems used throughout various hospitals in the United States. Obviously, uptime of this equipment is important to maintain customer care; therefore, Varian has to service the equipment in the most efficient manner possible. To do so, Varian recently implemented an M2M solution that allows the company to remotely monitor the usage and health of its equipment. By doing so, Varian can proactively avoid downtime, and when a customer does have an issue, Varian can often diagnose the problem remotely so visits to the site and time spent there are reduced. Using M2M in this way to offer Smart Services enables you to decrease service-visit truck rolls (in turn, decreasing fuel and labor costs) and often earn recurring revenue from companies who are more than willing to pay for such service. "Offering Smart Services can help you gain a competitive edge over companies using traditional service methods. By remotely monitoring, repairing, and controlling equipment, you increase customer satisfaction with faster problem resolution and concrete savings on service costs [through fewer site visits]," says Petock.

Which leads to the second view of Smart Services — yours is a company that desires the benefits of M2M like Wawa experienced, but doesn't have the capital, internal resources, or knowledge to effectively deploy a similar solution on your own. Using Smart Services goes back to the age-old debate of whether hosted vs. premise-based solutions are the way to go. The answer? It depends on what your company's goals are with the technology, the capital you have to invest up front, and the internal resources you have to manage the technology. Many companies, especially in today's economic slump, are choosing to make fewer large, up-front capital investments and would prefer to pay someone a monthly fee to handle the headaches and growing pains that often accompany a new technology deployment. In this case, taking advantage of Smart Services is an avenue to gain the advantage of M2M without having to invest in the infrastructure or manage the data yourself. For example, the case study on Mike Bubalo Construction (see page 30) illustrates a company that is experiencing M2M benefits by paying a monthly fee. Bubalo is paying a company to monitor the usage, idle time, and location of its equipment; the company accesses this information in dashboard format via a website. "Taking advantage of Smart Services remote diagnostics enables companies to decrease downtime associated with waiting for problem diagnosis and then waiting while the appropriate resources are gathered to fix the problem," says Pazol.

Smart Services: How Do They Work?
To enable communication from one machine to another, there must be an embedded communications device (such as a wireless module, SIM card, or microprocessor) in the equipment you wish to monitor. This device enables the communication of data from that piece of equipment to a server, either via cellular communication or over the Internet. The data transferred to the server is read by a software application that displays the information and can be designed to be viewed in dashboard format, produce usage reports, and provide alerts when preset thresholds are met. If you are an end user paying for Smart Services, this information is accessed via a secure website.

Experience Smart Services' Business Benefits
"Smart Services deliver multiple benefits to adopters and providers alike. Companies stand to gain from operational improvements, and manufacturers who embed the technology in their products improve customer service and generate recurring revenue opportunities," says Petock. Indeed, there are benefits on both sides. First, as a manufacturer or service provider who offers Smart Services, you are getting a step ahead of the competition in terms of customer service. In addition to improved customer service, deploying M2M to offer Smart Services allows you to make your service offering more efficient for your own company. "By offering Smart Services, you gain efficiency by reducing your dependence on costly labor- and resource-intensive methods of service delivery," says Pazol. For example, with remote diagnostics, you are able to identify the equipment problem remotely and take the appropriate resources (i.e. tools or parts) for repair the first time you go on-site, rather than making a trip there to identify the problem and a return trip to repair.

As a user of Smart Services, there is another set of benefits to gain. You can experience better asset utilization and lower operational costs. For example, Mike Bubalo Construction was having issues with equipment sitting idle at job sites and not knowing where it was when it was needed. Using Smart Services, Bubalo monitors the usage of its equipment, so if it isn't being used on one job site, it can be used at another site. Smart Services are commonly deployed to monitor the usage of lighting, heat, and electricity. By determining when these resources aren't needed, and even setting automatic turn-ons and shutoffs, businesses are able to minimize their use and decrease costs as a result.

The basis of Smart Services, whether you are offering them or using them, is to move your thinking and actions from reactive mode to proactive mode. In doing so, costs can be minimized and efficiencies gained. With M2M growing so rapidly, it's not a question of whether or not you should be considering deployment; rather, will you do so proactively or react only when your competitors do?