Augmented Reality in Service: Ready for Prime Time?

Si2 Partners have just published the first management report in their “Technology in Service” series on Augmented Reality. Based on surveys of service managers, senior executives and digitization professionals, the reports will shine a spotlight on the state of play of digital technology in industrial and technical service businesses. The survey results are used to draw lessons and develop insights on digital strategies and operational challenges and solutions, best practices, and the right ways forward for companies attempting to master digital change.

Converging advances in Machine Learning algorithms, sensing, connectivity, and computing capacity in the Cloud combined with imploding costs are driving the digitization phenomenon at rapid, and possibly increasing speed. The Internet of Things, Industry 4.0, Big Data and, more recently, AI have become hot constant topics of business conversation and hold the promise of massive improvements in productivity and wonderful new product and service offerings. Additive Manufacturing (3D Printing) and Augmented Reality (AR) are emerging as powerful complements. Yet the promise is accompanied by major disruption in the economics of many industries and of prevailing business models. Managements struggle with the consequences.

In its ultimate form, Augmented Reality is a transformational technology: It liberates information and data from 2-dimensional screens or pages and enables radically improved absorption and contextualization by users; It allows remote collaboration in a shared environment; And it acts as an interface between humans and machines, bridging the virtual and physical worlds regardless of location. Already in 2013, Gartner was predicting additional annual profits in field services of US$ 1 billion by 2017 for companies using Augmented Reality. Field services seem an obvious first area of application for Augmented Reality, where the productivity and economic impacts can be quick and significant: Technicians in the field can be supported by experts to solve problems faster with fewer errors. Instructions can be delivered in digital form in 3D, superimposed on the relevant objects (machines); And far better collaboration can be enabled. All this promises substantial cost and productivity gains for service vendors and considerable benefits for customers, in the form of higher availability and better response. The flipside is that AR’s impact on prices is yet unknown, as is its impact on volumes. After all, technology tends to reduce prices paid for outcomes (dematerialization) and, if customer maintenance teams can be directly supported adequately through AR, demand for field service may be affected (disintermediation).

Our report examines whether Gartner’s prediction has happened and analyzes whether and how companies are adopting Augmented Reality technology; the challenges they are facing, the potential solutions and the opportunities they perceive and provides some initial insights on how AR will eventually transform the service business.

Survey Highlights (Excerpts)

 Augmented Reality (AR) is very new to most service companies and businesses,
but the trend to introduce the technology is accelerating.

 Less than 1/3 of participants say they use AR in their business today, and of
those, 53% introduced AR only within the past 12 months. But 1/3 of non-users
say they will implement AR within the next 12 months.

 Remote, virtual support by an experienced human, whether of own field
personnel or directly of customers is the dominant use mode of AR today.

 But some participants are piloting digital content (e.g. use of 3D models for
instructions or simulations) and integration with real-time machine data
through the Internet of Things to provide context to engineers.

 Most companies take AR introduction decisions based on productivity and
cost considerations. Most expect to save on scarce engineering resources and
provide better service (faster response times, lower MTTRs, improved FTF rates)
to customers. Some are creating AR-based offerings and have expectations of
additional or different revenue streams.

 AR projects are mainly initiated by line managers rather than digitization
experts. It seems that the potential benefits of AR, at the intersection of
operational and information technology, are more evident to people directly
involved with operations.

 Selected AR system features, applications, and use modes are not always fit
for purpose: One size does not fit all. This leads to lower levels of acceptance
and demotivation and can jeopardize the achievement of objectives.

 Lacking connectivity at customer sites appears to be a significant problem in
AR service applications, where users are obliged to rely on third party or public
networks.

 Satisfaction and acceptance leave room for improvement. Interestingly, customers demonstrate a higher acceptance of AR activities of service vendors than their own personnel. This is not surprising, as, in the end, customers will be the main benefactors of AR applications.

 Most participants, 56%, are themselves satisfied or very satisfied with their AR system. However, only 44% say that acceptance by users is good or excellent.

 Most managers say that AR is already making a difference, particularly in speeding up interventions (MTTR) and reducing travel requirements. The majority, 72%, say that results are on par or above expectations, 12% say results are mixed, and 16% that it’s too early to tell.

For further Information visit www.Si2partners.com or email info@si2partners.com

Si2 Partners
www.si2partners.com
www.serviceinindustry.com

Si2 Partners is a boutique consultancy and management services firm. We help our clients leverage services to beat the competition and win in industrial markets. We provide research, consulting solutions and business execution support, as well as management development and training. Through our “On-Demand” service we offer rapid access to expert practitioners and consultants for management advice, insights, problem-solving and best practices

Bruchhauser Weg 22
69124 Heidelberg
Germany

info@si2partners.com

This release was published on openPR.