Dispatch from Field Service Palm Springs 2022 - Entytle
Dispatch from Field Service Palm Springs 2022
Our observations on the trends impacting Industrial OEMs
We just spent a few days in Palm Springs participating in the Field Service event. It was nice to hit the event circuit once again post the pandemic. We met many Industrial manufacturers up close and had a chance to get a sense of market sentiment and priorities for the coming quarters and years.
Here are a few megatrends that Industrials need to keep in mind:
- The impending “Great Retirement” is real. Almost every OEM everyone is looking out 2-3 years and predicting a big brain drain. The skill and experience gap is real. But no clear solution for it as of now, knowledge sharing was discussed as a solution – but still has challenges with scaling.
- The pandemic has created supply constraints; also an artificial surge in demand as customers placed orders across multiple vendors to guarantee delivery. Many manufacturers are nervous about this “fake demand” and are expecting order cancellations later this year. The result is going to be a capacity and inventory glut that will take some time to work through. Expect layoffs and cutbacks everywhere
- Technology investment is happening everywhere – adoption and true value capture are definitely lagging. Lots of customers told us about their outdated and legacy technology and the desire to modernize – but also how hard it was to get these approved by management
- Data and software will be the name of the game – but will be stymied by a lack of talent across the board. “Do it yourself” is prevalent across a surprisingly large proportion of manufacturers we spoke with at the conference. Coupled with the talent issues this is a recipe for incredibly slow and bumpy tech modernization – often with undesirable, low ROI outcomes.
- Technology and talent challenges can drive a self-reinforcing cycle – without good technology, great talent does not want to join. Without great talent, how do we develop and implement solid technology? How do we break this cycle? Even harder if we stick to our historic “Not Invented Here” position.
- Customer experience is an increasingly important priority – but no one has a good definition and understanding of what it means for their customer. Is it a portal? Yes. Is it being proactive? Yes. Is it being data-driven? Yes. Is it transparency? Yes. Is it customer “self-serve”? Yes. But what to prioritize and why and when?
Our sense is that manufacturers are in a state of flux and all the above issues are going to create huge opportunities for someone to break away from the pack and create new and different models for the future. The question is who will they be? An incumbent or a digital native? And when will we see this change roil the market? The change is here, not a decade from now