As headwinds loom, full recovery from COVID-19 appears to be a long trek for industrial firms in particular. Is there any real chance of turning things around?
It may take years longer than anticipated to bounce back completely, but this reality is not a setback. Many manufacturers have, at this point, invested in connected machinery and digitally transformed aftermarket service interactions—thereby generating a huge treasure of data. Those who redouble efforts to monetize data will likely reap robust revenue gains in times of economic hardship, inching closer towards full recovery.
A sudden rise in digital urgency across industrial sectors has pressed manufacturers to innovate and improve aftermarket service quality as they searched for ways to reactivate growth globally. Fast-tracking digital innovation has helped many rebound from pandemic-induced lows—at least partially!—but industry players haven’t stopped watching for signs of full recovery. This still feels like a far-off goal to many as new variants of COVID-19 spread and tough headwinds threaten to slow plans of complete business recovery. What’s more, experts presume supply chain delays, labor shortfalls, and rising prices, which could hobble global economic growth and recovery, will likely stretch into 2023. But while concerns mount over the prospect of continued disruptions, industry analysts reach a more optimistic conclusion—offering a clue to the way ahead:
“[Data monetization] can ensure continuous revenue even when the business is disrupted by external factors, such as supply chain challenges or human resource shortages.” — Gartner, Top Five Business Trends in Manufacturing for 2021
The revenues of those who successfully monetize their data appear to hold up reasonably despite COVID-19’s disruptive impact—marking a big step in recovery plans, too. This article looks to elaborate upon this matter, discussing how manufacturers largely focused on data monetization increase the value of aftermarket services to sustain robust revenue growth and lead the full recovery of their industrial firms.
Recovery Is Moving to the Next Level As Data Monetization Becomes a Larger Focus
Data monetization is, in more specific terms, “the process of using data to obtain quantifiable economic benefits,” according to the Gartner Glossary. Though the concept of monetizing data has been on the minds of manufacturers for some time, many are only now beginning to realize its real potential. Thanks, in part, to the pandemic-induced digital acceleration, data monetization is considered among the most influential trends impacting the manufacturing sector in 2021 and onwards.
Expert insights reveal why adopting data monetization practices needs to be a top priority for manufacturers:
“Data monetization gives manufacturing CIOs the ability to obtain revenue from digitizing their products and services. The rapid digitalization within manufacturing organizations creates large amounts of data. CIOs can share and monetize this data across the ecosystem. Using this approach, CIOs can use information as an asset, and create new services or enter new business models.” — Gartner, Top Five Business Trends in Manufacturing for 2021
Industrial firms keep a record of historical data. As more aspects of their business are digitized, manufacturers periodically acquire new information from operational machinery, connected equipment, digital service interactions, or supply chain activities—data that, when combined with historical records, helps firms extract actionable insights to:
- Understand where and how equipment is used—or when and why it is not—to improve productivity and effectively thwart risks
- Forecast demand to minimize inventory shortages or excesses and ensure availability
- Respond to supply chain disruptions and potential shifts in market dynamics
Manufacturers can deliver more strategic value by utilizing the vast quantities of data produced daily to expand their aftermarket service offerings. Through data-driven digital services, industry players may provide more personalized aftermarket experiences that involve a perfect mix of digital, self-service, and human interactions. More importantly, personalization is precisely what most customers demand in exchange for their data.
Interpreting different behavioral data points will allow firms to tailor offerings to individual customer preferences and geographical locations and create differentiated service propositions. But as clients prove more willing to share their data for service personalization, firms must also commit to continue demonstrating the value customers get from trading information. In times of recovery and transition, creating value comes down to supporting the business continuity of all customers. Those who use data to surface compelling insights on how to keep the customer’s assets up and running can maximize profits as they:
- Conduct predictive maintenance for critical equipment
- Deliver real-time technical assistance remotely
- Provide customized self-service platforms
Alternatively, manufacturers can opt for selling their data, but not everyone sees this move in a positive light. A vastly better investment is, as Gartner writes, to “monetize data by working with IT to transform it into insights that trigger customer engagement and create revenue opportunities.”
Regardless of how manufacturers choose to monetize data, this strategic initiative is integral to the speed and strength of their full recovery from the COVID-19 crisis. A recovery plan that puts data monetization at the forefront could help firms yield profitable revenue growth and bounce back far stronger than initially expected.
There Is Still Much Work to Be Done
Data monetization is becoming a large focus for those willing to establish and sustain revenue growth amid exceptional volatility—and soon, this practice will be on the cusp of more widespread adoption. As Gartner’s prediction states:
“By the end of 2024, half of global heavy asset manufacturing organizations will have succeeded in monetizing their data.” — Gartner, Top Five Business Trends in Manufacturing for 2021
As efficient monetization becomes more pervasive, it might directly intersect with other trends to shape tomorrow’s manufacturing industry. Therefore, those who want to continue propelling growth with innovation and withstanding unexpected shocks should keep a close watch on fast-rising industry trends.
Surely, a manufacturer’s ability to exploit new monetization opportunities will determine whether recovery progresses or stalls. But economic slumps may linger—and leading multiple smart innovation initiatives appears to be indispensable in creating new value opportunities and navigating future business disruptions. Firms may find it necessary to leap ahead to form stronger ecosystems of partners, view the company experience as a unified whole, and combine product/digital offerings to drive differentiated value and strengthen their resilience as industry changes occur.