Is it Time to Revisit the Idea of Outcome-Based Automation Service Agreements?

The Industrial Internent of Things (II) is breathing new life into remote services.  Recent advances in data science, artificial intelligence, and computing power have converged to allow companies to take large amounts of plant and asset data and transfer it to the cloud for analysis.  This approach provides a cost-effective way for end users to outsource the predictive analytics of the often overwhelming cache of plant and asset data to the technology suppliers’ experts who, in turn, provide guidance on how to improve plant operations, increase maintenance effectiveness, and avoid unplanned downtime. 

The IIoT also makes it much easier for end users to rely on suppliers for simple “micro services” that provide real-time feedback on the condition of certain classes of plant assets, from sensors to control valves to pumps and heat exchangers.  These micro services can also incorporate “lightweight” analytics models that can present information in very simple ways on mobile devices.  More complex and far reaching services can incorporate sophisticated models and analytical tools to optimize the performance of thousands of individual assets or classes of assets across an entire plant, multiple plants, or the entire enterprise. 

In both cases, the “expert analysis” aspect of these solutions is what makes them a service.  End users are increasingly turning to automation and equipment suppliers, OEM skid-mounted equipment manufacturers, and even technology licensors to provide bundled solutions that incorporate expert feedback either dynamically in real time or offline. 

These new types of IIoT-enabled services could not exist without the products and applications.  The new breed of connected products go hand in hand with connected services.  Services are becoming a much bigger component of markets that once focused almost exclusively on products and hardware.  Many end users are also moving to a model where they don’t even purchase the equipment.  The equipment itself can be provided as part of an outcome-based service agreement that includes the software and monitoring services.  Many industries have had success with this model, with GE’s airline “turbines as a service” model probably the most well-known example. 

ARC’s latest and greatest supplier provided automation services market research discusses these and related trends in far more detail.