Unlocking business potential: The power of outcome-based services in the age of Industry 4.0

Author: Schneider Electric

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Given the pace of change today, there’s no standing still. Over 90% of businesses are investing heavily in digital transformation. Many of these businesses have shifted from reactive service delivery—traditional break/fix service models—to outcome-based and customer-centric models. This shift highlights a more nuanced appreciation of customer priorities and capitalizes on the new technologies Industry 4.0 provides: IoT, big data analytics, automation, and AI. These tools reshape how services can be crafted, aligned with customer goals and expectations, and delivered.

integrating data with advanced digital technologies and AI allows for the development of predictive models and tailored recommendations that improve operational efficiency and drive outcome-based services.

Industry 4.0 and its role in outcome-based services

Industry 4.0 enables us to harness IoT for capturing precise data directly at the customer’s premises. By integrating this data with advanced digital technologies and AI, we can develop predictive models and tailored recommendations that improve operational efficiency and drive outcome-based services. This shift creates opportunities for a more holistic and better-connected company ecosystem. By using these service models that emphasize customer satisfaction, efficiency, and effectiveness, service providers can tailor their offerings to better meet business goals.

The critical role of digitalization and user adoption

As an enabler of outcome-based services, digitalization turns data into actionable insights that help optimize operational performance. This makes it a very powerful growth enabler for business. In fact, digitalization now represents 15.5% of global GDP—over US$13.6 trillion – and it is growing fast.

Digital connectivity makes it possible to benchmark facility operations through real-time data and analytics access. Combined with AI and algorithms, you can achieve better energy management and operational efficiency. You can also reduce unplanned downtime by up to 75% and planned downtime activities by up to 40%. This extends equipment lifespan and significantly contributes to achieving sustainability targets.

Incorporating digitalization into your operations also facilitates the transition from traditional maintenance models to proactive predictive and condition-based maintenance. This shift further enhances equipment reliability and resilience.

The outcome-focused, structured approach

Developing customer-focused, outcome-based services builds from the most fundamental outcomes to more advanced customer needs. Each step is interconnected:

1. Safety and compliance set the stage for all services. They ensure that every service delivered meets rigorous safety standards and adheres to standards like the newly-mandatory NFPA 70B. It’s more than just ticking boxes. This outcome helps customer buildings and facilities operate in a safe, code-compliant environment that protects their people, customers, equipment, and business integrity.
2. Resilience and reliability fortify infrastructure to prevent potential downtime and failure, keeping productivity resilient and on track. Connected devices and software maximize uptime and create robust recovery protocols for quick bounce-backs from any issues. Resilient operations with reliable electrical networks keep businesses humming, optimizing, and producing goods without skipping a beat.
3. Efficiency and scalability fine-tune the tools and manufacturing processes for peak performance while keeping the door open for growth—like enhancing drives and automating installations—so maintenance doesn’t pause productivity. And because processes and resources for greater efficiency are optimized, operations can scale up to changing demands.
4. Sustainability is now central to customer operations and underpins the move towards circularity. This economic model emphasizes reusing, sharing, repairing, refurbishing, remanufacturing, and recycling materials and products for as long as possible.

The power of outcome-based services lies in the approach. Customer-focused, outcome-based services build from the most fundamental outcomes to more advanced customer needs. Each step is interconnected.

Demonstrated success of outcome-based services

There are solid, real-world examples of outcome-based services in action. For example, BASF leverages data-driven services and uses high-value data to maximize its power distribution substation, maximize plant uptime, and make the right decisions at the right time. With 63 assets remotely monitored for analysis and over 100 variables measured and computed, the chemical giant can monitor the health of its electrical distribution equipment and its motor control centers that drive its processes. This connectivity allows them to share information with their service provider and troubleshoot issues collaboratively in real-time.

Nestlé Nescafé also uses services with outcomes focused on their needs: predictive maintenance, reliability, and lower total cost of ownership outcomes. Their power disruptions could cost as much as $52K per hour. Their electrical equipment must operate reliably in harsh conditions, so they’ve digitalized their power infrastructure for better operational visibility. They now have improved visibility into their power usage and have implemented a platform that allows for future-proof scalability.

Maximizing value with a comprehensive service partner

The service industry is embracing proactive and preventive strategies that help clients achieve their business goals and challenges. We recognize that each company has its own objectives and challenges, and that it’s important to find the right partnerships that can provide the unique solutions required. At Schneider Electric, our partnerships allow for a wide range of integrated services that cater to every facet of customer’s operation. We can cover all bases, from digital transformation to outcome-based service delivery.

Schneider Electric Services is a lifelong partner. We aim to create a symbiotic relationship that advances your goals—while anticipating and adapting to needs—to ensure operational continuity and strategic customer advantage.

It’s important to remember that this digital-first shift is as much about people and mindset as technology and requires a significant cultural shift within organizations. Schneider Electric Services can communicate the value of digital connectivity and data analytics, emphasizing the human role in delivering desired outcomes rather than just the technical aspects of connectivity.

Ready to digitalize your business with Industry 4.0?

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Tags: AI, Digital Power Services, digital services, Digital transformation, energy management, Industry 4.0