In the automotive sector, it is no longer fashionable to call a business a car manufacturer; they are suppliers of transportation solutions. This is not twisting the meaning of the message. It is a very true example of how organizations that once manufactured the asset that carried out the task of transportation, have now become end-to-end service providers. General Motors investing in ride share service Lyft is just one example of a manufacturer becoming a servitization business.

The HVACR sector is going through a similar period of heated change as automotive. Industry professionals demand more than just solutions and products; they expect a full-service offering. Forward-thinking decision-makers should therefore be looking at ways of transforming its business models to become more service-centric.

Businesses must first recognize the need to adopt a service mindset and then work pragmatically to develop and mature their service organizations, which means working with partners with a like-minded care and approach to the customer. In the past, Panasonic had a technical approach to service. In the 2020s, however, service means so much more, whether the customer is commercial or residential.

Service-centric HVAC

The first step in the journey to servitization is a holistic analysis of the service operations right across the organization, including a business maturity assessment. With this understanding, businesses are able to formulate a step-by-step strategic approach to develop the level of maturity servitization requires. Depending on baseline maturity, step one will for most companies involve the adoption of common tools that promote uniformity of processes, reporting and ways of working.

The HVACR sector is going through a similar period of heated change as automotive

Let me take you back to the automotive sector for an example of why this is such a crucial step. If you were to go to a BMW or Mercedes showroom, you would expect to get the same experience regardless of what country you are in. Germany, France or the UK, you would expect a similar kind of service. And that's really what all service providers in the HVACR space should be aiming for; no matter where the customer is—whether it is Italy, Czech Republic, Spain or Norway—they receive a consistency in service.

One of the main challenges to this process, and one that faces most of not all companies in the sector, is that different nations or regions have established their own ways of doing things, creating a silo mentality. To counter this, while still respecting independence, businesses need to develop a service offer that has a top-down governance in terms of the technology platforms in use and the operational tools and processes to sell service and report on growth and sales. While taking care not to stifle the creativity and uniqueness of regional subsidiaries, a firm hand will be needed to steer away from each country going off at right angles.

Standardizing technology platforms

Standardizing technology platforms is a crucial part of this transition. Panasonic has partnered with enterprise software provider IFS for a central remote assistance solution to be used by sales, support and technical staff across Europe. This is an important first phase of our strategy, as it offers a truly unified way of working. Everyone in the organization has to work in the same way, and to the same high standard.

One crucial realization is that servitization is inextricably linked with digital transformation and the application of new technology to reinforce business imperatives. In the case of Panasonic, the choice to deploy a merged-reality software solution that has been a remote solution to provide our teams with a merged reality software platform that blends two real-time video streams into an interactive environment has been a decisive first step toward our servitization vision. Installers, field technicians, engineers and customers must be able to share real-life situational context with remote product experts to diagnose issues, share knowledge in real-time and accelerate the repair time rates.

Servitization is inextricably linked with digital transformation and the application of new technology to reinforce business imperatives

Considering the benefits that can be reaped even through an incremental technology investment strategy, businesses can’t afford to remain on the servitization fence. Just looking at the potential benefits of remote assistance technology in the HVACR sector, companies should with relatively little effort be able to realize significant reductions in repair rates while also reducing or even eliminating time-consuming and environmentally unfriendly site visits. By equipping service staff with the right technology, they will also be able to capture customer feedback in real time as well as easily share knowledge and technical insight with coworkers.

Future opportunities

Finding and deploying the right enabling technology is a key part of any servitization initiative. Another crucial step is examining the HVAC service sales structure itself to determine how services are sold.

The holy grail is for customers to see you as a solution to their problems, rather than a company they buy products from. This means examining what offerings are appealing to the customer base, and how to develop those into subscription-based offerings. For most HVACR companies, this will translate into the delivery outcomes, and for the customer to trust their service provider to guarantee their air conditioning, for example, is always operating optimally. If you look at hotels, hospitals, retail, restaurants, warehouses, industries, offices, and many other applications, they want to get on with doing what they do best – they don't want to worry about HVACR equipment. That's our job, and we need to determine how to best meet that need.

Finding and deploying the right enabling technology is a key part of any servitization initiative

As a business moves to a servitized model, so too must its service engineering modernize. Opportunities include providing feedback from the engineers in the field, and from customers to the product development team, which will improve the creation of new products and solutions.

In today's economy, the customer expects that if a premium product is purchased, then a premium service has to be part of the same offering. The ultimate goal is to maximize customer retention, and to do that we need to mature and innovate in how we provide service to our customers. This is a new beginning for the sector and I'm excited for the journey.

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Karl Lowe Head of European Service, Panasonic Heating & Cooling

Karl Lowe, Head of European Service at Panasonic Appliances Air-Conditioning Europe, describes how remote product support is poised to raise the stakes in the heating, ventilation, air conditioning and refrigeration (HVACR) sector.

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