Our comments on:
Towards A Customer-centric Construction Equipment Industry
Why big data is a big deal
European OEMs (56%) rank aftermarket services the second most important trend that will dominate the industry in the next five years. For the average European OEM, aftermarket services currently make up 15 to 20% of total revenues, whilst carrying multiple times higher EBIT margin than new equipment sales.
Generating higher profits from boosting aftermarket services is attractive. It is reflected in the European Construction Equipment Survey (2015/2016) in which there is a striking shift in key success factors from operations focus to customer centricity. OEMs find it important to get a deep understanding of how their customers create value and build services around this knowledge while being on the technological forefront in such offerings.
Simultaneously, OEMs rank big data as the least important technology and the technology that they are least prepared for.
This is puzzling. On the one hand, OEMs recognize the importance of getting insights into their customers’ business, providing remote monitoring of their machines and effective fleet management. On the other hand, OEMs do not recognize the importance of data.
This is contradictory, but evidential of the widespread and consistent misuse of the term big data, which is unfortunate. So, if big data is not a technology (and it is not!) what is it?
Big data is data. Data is information. Today, there is a lot more information than just five years ago. However, ‘more information’ does not sound as sexy as big data, but the two terms describe the exact same thing: that we can now access, store and process more information than ever before.
Recently, researchers looked at the question of cancer biopsies. They wanted to investigate which of 9 tell-tale signs was the most indicative of cancer so that general practitioners, equipped with this knowledge, could detect cancer at an earlier stage. They asked the computer to analyse the data and determine whether cells were cancerous or not.
Surprisingly, the computer found 12 tell-tale signs that best predicted that a specific biopsy of the breast was in fact cancerous. Why is that surprising? What was the surprise? That the medical literature only knew 9! The computer, being equipped with data, was able to spot three new tell-tale signs which in fact the medical literature did not know existed.
More data does not only let us see more of the same thing we were already looking at. More data allows us to see new. It allows us to see better. It allows us to see different. That is why big data is a big deal. OEMs can use big data to predict when a machine or a component failure is going to take place in the next 24 hours and subsequently offer a customized and real-time deal on this service.
Data will transform OEMs’ business models, generate new revenue sources and bring OEMs and their customers closer together.