SAP has been positioned in the Leaders Category in the IDC MarketScape: Worldwide Service Life-Cycle Management Platforms 2023-2024 Vendor Assessment (doc #US49989623, October 2023).
Service life-cycle management is defined by IDC as the process of servicing a product or an asset through its lifetime. This includes customer support, service request, service planning, service execution and field service, spare parts management, warranty management, and recalls.
Service life-cycle management is no longer a silo unto itself; data from the aftermarket can be leveraged by other enterprise applications to better inform the enterprise and deliver value to customers across their journey with the service organization.
In fact, recurring revenue streams have become a central focus for companies in recent years, particularly those with capital-intensive assets, as they navigate the swiftly changing and highly disruptive business landscape. In response, businesses are actively seeking innovative approaches to offer everything-as-a-service propositions enabling new revenue streams, ensuring a consistent and reliable flow of income, and delivering superior customer values.
This strategic shift not only addresses the need for sustainable revenue models but also reflects the adaptive nature of companies in the face of ongoing market fluctuations.
Business Value of Service Life-Cycle Management with SAP
At SAP we believe that integrated services are a vital part of many businesses’ future, and that service excellence can inspire loyalty and grow revenue while also reducing costs and environmental impact. SAP has the end-to-end portfolio to:
- Offer enhanced subscription management from quotation to payment
- Optimize and mobilizing resources, both internal and external, for efficient service delivery
- Extend equipment life through proactive service and optimization strategies
Having the appropriate underlying software is vital to enabling growth and fulfilling the organization’s requirements both now and in the future.
For example, if a company’s revenue model depends on equipment uptime, they may want to optimize maintenance as much as possible. To do this, they need to design intelligent products that have IoT sensors that can capture key information about how the product is performing. Is it trending toward breaking down? Is a key component due for a replacement? This is where predictive analytics comes into play.
With the ability to analyze incoming sensor data in the context of historical performance data, they can predict that a machine needs maintenance or needs replacement parts, and then take the appropriate action to send a maintenance person out with the appropriate instructions, tools, and parts.
Monetizing an as-a-service model may require a new billing/quote-to-cash process that can be adjusted to subscription and usage-based payments. It is important to know if the billing and accounting environment can consolidate and change billing models and resolve disputes and returns on the fly.
For the as-a-service model to work, it is also essential that the front office and back office are seamlessly integrated. If the contract calls for monthly billing based on usage, this data needs to be available, by designing the product to capture and communicate the usage back to the business process, in order to ensure accurate and timely invoicing, revenue recognition, and analysis.
Service Management Solutions from SAP
End-to-end service management solutions from SAP enable companies to continuously deliver service experiences, inspire loyalty, and grow revenue and margin while reducing their environmental impact. They can:
- Sell, contract, and engage with enhanced subscription management throughout the subscriber’s life cycle from quotation to payment
- Plan, optimize, and orchestrate with asset strategies based on failure mode and reliability-centered maintenance, while ensuring the right spare parts in the right amounts at the right time
- Schedule and execute jobs and workers — both internal and external — in real time leveraging mobile solutions, giving service partners the access they need to manage their technicians, jobs, and outcomes
- Invoice and close with integrated billing, accounting, and profitability management to drive service profits for overhead cost management, product costing, and profitability analysis