A fundamental problem for the further adoption of ’smart’ maintenance in service triads is that costs and benefits are dislocated in time and place. When maintenance is done with IoT enabled condition-based maintenance, in so-called CBM-driven smart services, uptimes and revenues will increase for the asset owner. However, the revenues for the other stakeholders may decrease. OEMs may provide fewer spare parts and service providers may sell fewer direct maintenance hours. And so, what is obviously beneficial for the service triad as a whole does not happen because of this misalignment. Contractual arrangements are needed that overcome these misalignments, so-called performance-based contracts. This calls for an integrated perspective on costs and benefits of smart maintenance over time. Constructing formal business models of these dynamics with all the relevant stakeholders is a proven method to develop such an integrated perspective and the associated performance-based contracts. Moreover, these dynamics change over time. The challenges and opportunities in the early stages of service growth are different from those later on. In the talk, all these business model dynamics will be discussed, based on recent work with OEM eager to develop CBM-driven smart services.

The slides are available here.