Coen Jeukens is vice president of global customer transformation at ServiceMax. He works with customers and prospects to fully unlock the true value and potential of their service organizations. Prior to joining ServiceMax, Coen was the services contract director at Bosch where he implemented an outcome-based business model, with highly impressive results. Coen is also a regular keynote speaker at prominent field service conferences around the globe.
“We’ve defined ERP as the system of record for our installed base.” This is a common declaration across industries. But is it the smartest choice for managing the lifecycle of products in the field? When a business focuses on the service lifecycle of an installed base, an alternative approach may better serve your system of record needs.
This blog is part two of a three-part series:
- Part 1: How the Service Bill of Materials Links Engineering to Service
- Part 3: How the Service Bill of Materials Enables Cross-selling & Upselling
Why ERP falls short for field-based systems of record
ERP systems are often an excellent choice for managing centralized data assets. But when it comes to tracking products, equipment, and assets that are in use at customer sites, the ERP system of record has limitations. Once products are deployed in the field, they generate a vast array of usage data—such as maintenance actions, performance metrics, and user interactions. Capturing and managing this unique information requires a system of record that goes beyond traditional ERP functionality.
Understanding the bill of materials lifecycle
A product’s Bill of Materials (BoM) evolves across its lifecycle, transforming to meet the needs of each stage. Here’s how it progresses:
Engineering and manufacturing: from as-designed to as-built
- As-designed: During the design phase, engineering creates an initial BoM with a comprehensive list of parts.
- As-built: In the manufacturing phase, the engineering BoM is adjusted to reflect the final built product specifications for each batch.
Sales and customer use: as-sold and as-maintained
- As-sold: When a product is configured during the sales process, the as-sold BoM may vary slightly from the as-built version.
- As-maintained: Once the customer begins using the product, the BoM must adapt to reflect real-world conditions. Customers use products within (or occasionally outside) expected specifications, affecting maintenance requirements. The BoM now reflects the as-maintained product configuration, capturing unique details based on actual usage, environmental conditions, and maintenance history.
The role of service lifecycle management (SLM)
For Original Equipment Manufacturers (OEMs), the primary reason to reconsider the ERP installed base as the system of record is total product lifecycle cost.
The impact of lifetime operating expenditures (Opex)
For mission-critical assets, the operating expenditure (Opex) over the product’s lifecycle can far exceed its initial capital expenditure (Capex). Thus, if you aim to deliver value to customers, your focus should be on service lifecycle management (SLM).
An SLM asset record is purpose-built, connecting data across the entire lifecycle: as-engineered, as-built, as-sold, and as-maintained. As discussed in [Part 1], the Service BoM establishes maintenance standards that drive product uptime and longevity. SLM, as a system of record, integrates engineering, manufacturing, sales, and service data, extending digital thread to enable complete lifecycle support for field-deployed products.
The role of the enterprise data architect
In making the system of record decision, business and IT often approach this decision from different perspectives. While a business team might see the operational benefits of moving away from ERP, IT may have concerns about data integration and infrastructure.
Building a cross-functional data framework
This is where the enterprise data architect plays a crucial role. The data architect evaluates the needs of each department, determining how data flows, is shared, and is stored across the organization. The architect considers questions such as:
- What is the primary system of record for each function?
- How is data transferred across functions?
- Does each function “own” its data, or is data part of an enterprise-wide resource?
In the case of the Service BoM, a centralized data framework means that engineering insights can seamlessly transition to after-sales service, providing invaluable lifecycle management data.
The increasing value of asset data
As the value of asset data continues to grow, the timing is ripe for creating an integrated digital thread that keeps operations running smoothly, extending product lifespans, and maximizing customer value. Using SLM as the system of record and the Service BoM as a data pivot point, OEMs can gain unprecedented insights into asset health and performance.
In [Part 3] of this series, we’ll explore how Service BoM and SLM data can help generate new revenue opportunities through effective cross-selling and upselling strategies.
Learn more about service bill of materials
An SBOM serves several critical functions, all of which impact the successful service of a product.
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