Most companies who have integrated M2M into their operations have done so for strategic reasons. M2M slashes costs, opens new income opportunities and delivers benefits to customers. That is why companies who have taken this route have both increased income and improved their margins. Plus, it is not unusual for income from services to actually exceed income from products.
There are three key reasons for implementing M2M. The first is about staying ahead of competitors, the second is to add new services and the third is to become irreplaceable for customers.
The important thing is to take the first step and position yourself as a leader in your market. The most obvious activity that a connected product can make more efficient is an existing process. Moving from reactive to proactive action delivers huge value, often in the form of cost reductions. Major savings can be achieved by being able to carry our tasks when required, implementing assignments faster and using field personnel more efficiently, for example. Certain tasks can be implemented from a distance with substantial costs savings as a result.
By staying ahead of the competition a company can differentiate itself in the market and commence building a unique relationship with a customer.
The next step is to add value to the product by creating new services. What tasks does a customer apply when using a product, what part of the process is the product used in? Can the company assume responsibility for an element of the customer’s application of the product? Customers are able to make their processes more efficient by being given information about the product’s use, the functions used most and the problems that usually arise.
The third step is to take a larger grip. We are now talking about totally leaving product sales and delivery and taking responsibility for a function. The relationship with the customer is now extremely tight. The delivery is so vital that the customer and supplier often begin a long and, for both parties, profitable partnership.