In the new normal, the manufacturing industry needs an integrated approach to warranty management backed by intelligent automation and embedded analytics
Warranty-as-a-service, leveraging Internet of Things (IoT), enables organizations to gain marketshare and increase brand perception
It can also improve revenues and profits, while enhancing customer experience
It has been a Catch-22 situation for manufacturers. On the one hand, they spend vast amounts on research and development in their quest to create new and differentiated products. On the other, technology and globalization have shortened the differentiation period by enabling easier imitation of products.
‘Warranty-as-a-service’ breaks this impasse. By shifting the kaleidoscope to view warranty as a post-sale strategy of Customer Experience (CX) rather than a cost center, Original Equipment Manufacturers (OEM) can discover opportunities to generate revenues, raise CX levels and enhance brand value.
CX-led warranty management offers two advantages.
One, it can streamline processes for greater transparency, and reduce warranty pay-outs and false claims while holding suppliers accountable for product quality. Research shows that automotive suppliers pay only 10 percent of the industry’s warranty costs against their fair share of 37 percent. Plus, 20 percent of pay-outs were estimated to be fraudulent claims.
Two, it can increase revenues and profits by providing service contracts that are highly relevant to customer needs. For example, in the automotive industry, vehicle service contracts could leverage the extension of warranty duration for additional services such as oil and filter changes, towing, repairs, emission control, and more. When modeled right, they can create positive customer engagement and relationships, and deliver additional revenues.
Only an integrated approach can bring organizations to this future state in warranty management. It should start with a 360-degree view of the customer, backed by a high degree of intelligent automation and configurable business rules, embedded analytics and workflows, and a scalable platform. In short, what is required is a transformed warranty-as-a-service capability for end-to-end management of the warranty lifecycle. This is evident from the WNS-Corinium Intelligence 2021 global survey, in which all respondents said they were transforming their operations to bake Artificial Intelligence (AI) and advanced analytics into business processes.
So, what does a next-generation warranty-as-a-service entail? Here’s a brief snapshot.
Cloud-based predictive analytics for actionable insights to prevent fraud and plug revenue leakage, pick early warning signs for preventive repairs, enhance service performance, and improve inventory planning and availability
Embedded analytics and dashboard for crucial insights into business performance for faster and better decisions, improved first point of resolution, and significant up-sell and cross-sell opportunities
Intelligent automation for digitization of product registration, customer and dealer interactions, and claims registration, and real-time metric tracking through workflow tools. When combined with AI, it minimizes manual interventions and streamlines processes across the warranty lifecycle
Self-service mode for claims registration, uploading of claims documents, and creation of claims in the service desk to reduce cycle time, and improve customer and dealer experience
A digitized warranty strategy moves away from treating it as just an effective mode of claims administration to an integrated, seamless and connected operation across the value chain. Such a transformation will enhance CX by:
Identifying and correcting production issues and processes for higher quality levels
Improving the management of component suppliers to enhance product quality
Aligning warranty policies to enable better customer usage
Improving service logistics in terms of location of repair centers, accuracy in stocking spare parts and deployment of right-skilled professionals
Driving compliance in line with legal and regulatory norms
IoT plays a significant role in achieving this connected state. Products can be automatically registered for warranty and monitored through sensors to ensure the right usage. Repairs can be validated to ensure right-first-time fixes and costs related to inventory can be efficiently optimized. Problems can be identified well before product failure to apply the right warranty service, and avoid downtime issues and improve CX.
For example, luxury brand Bulgari’s digital warranty card helps activate, authenticate and manage the warranties of its products throughout their lifecycle. The company has deployed an IoT platform to create a digital record for every instance of its products in the market and their warranty-related attributes. A customer purchasing any product can scan a QR code on a mobile device to activate the warranty. The warranty data can be accessed from anywhere by the product owners, dealer networks and manufacturer for smart warranty management.
Such a connected warranty strategy enables organizations to gain market share and increase brand perception by proactively providing customers with a strong message of quality and reliability.
Agile warranty operations focused on reduced spend, improved processing time and enhanced dealer and customer experience will be crucial as OEMs look toward business recovery in the new normal. Companies stand to directly impact their bottom lines by optimizing operations, improving sales conversions and preventing revenue leakage by way of fraudulent claims.
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Banking & Financial Services
16 November 2022
02 September 2022