Hello, and welcome to Analyst Insights, where we dive into the latest analyst research and highlight current technology trends while looking ahead to what's coming. Hello, and welcome to today's webinar. My name is Stephanie Caldwell, Senior Marketing Program Manager here at PTC. Before we get started, I'd like to cover a few housekeeping items to ensure a smooth experience in the ON24 console. At the bottom of your screen, there are multiple application widgets you can use. All widgets are movable and resizable, so feel free to adjust them to get the most out of your desktop space. You can expand your viewing area or maximize it to full screen by clicking on the arrows in the top right corner. For the best audio quality, please make sure your computer speakers or headset are turned on and the volume is up so you can hear the presenters. If you experience any delay or interruption in your audio or video, you can refresh your browser by hitting F5 on your keyboard. If you have any questions during today's webinar, you may submit them into the Q&A widget at any time. Check out the Resources widget, where you will find more great content to complement today's discussion. This webinar will be available for replay. You will be able to access the replay on demand shortly following the conclusion of the webinar. We are excited for today's content, and with that, let's get started. Hello, and welcome to today's Analyst Insights, How AR Improves the Service Experience. My name is JJ Lechleiter, and I'm the Senior Vice President and General Manager of Vuforia here at PTC. I'm joined by John Carroll, the Founder and CEO of Service Council. Today, we're going to dive into how manufacturing companies tackle the challenges of high customer expectations and changing requirements for the workforce, how they can improve the service experience for their customers, and we'll have a closer look at what this means for the automotive industry. Let's get started. John, when we ask our customers about critical topics, they specifically mention challenges with workforce efficiency and increasing product complexity. Can you share your experience? Yeah, happy to do that, JJ Thank you very much for the invitation to have a talk with you about this important topic. The Service Council is a Boston-based research firm, and we're fortunate to be able to ground our opinions within the context of research data. We do primary research, and one of those research efforts that we do annually is called the Voice of the Field Service Engineer Survey. It's currently in market this year, our 2023 version. The 2022 results revealed some really interesting trends. For example, according to the 2022 Voice of the Field Service Engineer Survey, we saw that there was an engagement issue. Even when we went down to the younger demographic, into Gen Z, X, and Y, we saw that 54%, 60%, 65%, and 67% were not committed to the role in the profession of being a field service engineer. There is certainly an engagement crisis. When you start to think about all the things that are happening on the opposite end of the spectrum, age spectrum, you have a retirement crisis that is doubling. The Bureau of Labor Statistics suggests that those executives over the age of 65 are going to double from now until 2050. What does that mean for service leaders? It means that there is a huge pinch on them in terms of meeting capacity, upholding quality of service delivery, and meeting customer expectations when they arise. A lot of organizations are moving towards predictive and proactive approaches to be able to schedule and build their workforce around the issues that they know are going to happen, not be reactive. On workforce efficiency, those things are really pinching into service leaders and causing a huge challenge with respect to capacity management. We see a lot of focus in terms of the evolution of workforce utilization. Rather than looking at it from the number of jobs per day, looking at the time spent being productive. Part of the reason there, I believe, is the engagement crisis. Those that are younger and leaving the demographic, that demographic that's leaving the workplace and not committed to the role of a field service engineer, are challenged by the pressure they're facing from management and customers. It's not an easy job. Building on that, on the product complexity side of things, I think you had referenced that previously as well, we're seeing a number of indicators that suggest that the role of the field service engineer is evolving. It's becoming more complex, more challenging. 84% of field service engineers believe the knowledge required is increasing. 82% believe that the technological skill sets are increasing. 65% believe that products overall are more complex. There is a lot of focus on upskilling, reskilling, making sure that the technicians have an easier, frictionless job in their day-to-day. Yeah, absolutely. We're seeing the same thing. Specifically, one of the industries where we're seeing a lot of those trends really hit is in automotive. With the electrification of vehicles, there's new skill sets for technicians to learn. Are you seeing these trends in data? Indeed, yeah. You know what's interesting is we believe uncommon industries share common pains and pressures. When you look at manufacturing as an umbrella, the same things that are being felt in automotive are being felt in building automation and high-tech and HVAC and industrial manufacturing. There are a number of commonalities that we're seeing in terms of the data. When we look at the automotive market specifically, there is an increase, you're right. It's becoming more complex because to be a service technician for an electric vehicle is a lot more difficult than a normal standard vehicle. It requires more training and more skill sets. We look at the data that suggests that electrification is going to continue to climb. Last year, 14% of registered vehicles were electrified. This year, we're seeing that rise to 19%. When we look at certain geo-regions, there are some that are a little bit more advanced in terms of their adoption of electric vehicles. APJ in China, 60% of market. I think EMEA is around 30% of market. The U.S. is trailing, about 10%-15%. There is some work to be done there. There is a greater skill set, a different skill set required when you start to think about electric vehicles. I think that kind of ties back to the greater technological needs that we're hearing from the technicians in terms of the day-to-day. What about the other side of the coin? Traditional vehicles, there can be long wait times, months and months to get a new vehicle, which ultimately it's meaning that older vehicles are on the road longer, which has increased service needs. I mean, you see any of those trends as well? Yeah, yeah, for sure. I think you're absolutely right. With the supply chain lag that has hit us both from a consumer and a business perspective, we're seeing the production of goods slow down a little bit. To get a new vehicle sometimes is 18, 24 months if you customize that vehicle. What that's doing is it's increasing the number of vehicles that are in market that are older. It's increasing the length of the asset lifecycle. When that happens, there's a greater need for service, as you talk about. These trends are all kind of creating a greater pressure on service to perform at the point of issue. How can we be predictive? How can we connect our vehicles? How can we get a little bit more knowledgeable about the events that are about to happen, predict, proactively support those so that we can eliminate them altogether? I mean, you're talking to service people, different companies every day. I mean, what's the benchmark service experience in automotive? I mean, what are customers looking for? I think that the new competitor for any industry is the consumer experience that you face in your day-to-day job and your day-to-day life. It's no longer we were at our annual conference last year, and many from our advisory board were commenting, "My competitor is not that other manufacturer next to us. It is the consumer experience that I feel in my personal life." If you can track and trace a pizza from Domino's through order to build to delivery and consumption, you ought to be able to do that within the service experience. We do hear a lot of focus on shifting left, getting closer to the customer, meeting the customer where they want to be met. Customers are demanding remote experiences, self-service. Time to resolution is really, really important. They want an effortless experience, just like the technicians, just like our engineers. They want that effortless customer experience where their effort is low in terms of resolving issues, and they like to do it on their own at times. What's preventing companies from delivering that ideal customer experience? I think that there's a lot of signals that organizations are moving in that direction. They're trying and attempting to meet customers where they want to be met. You know, you've seen a lot of digital transformations. We've heard that term enough. As we look at some of the digital transformations, there's a couple of issues of modernization versus transformation happening that we're seeing in terms of the trends. A lot of modernization in pockets. The remote triage and diagnosis phase of the service journey might be digitized and might be remote, but it's not necessarily threaded into the other channels of service delivery that might be required in that service experience. When and where there's a remote experience that then transitions to a dispatch scenario, is it clunky for the customer? Is there a challenge with respect to jumping from channel to channel in terms of the service experience? That is where we see a lot of focus on weaving together the technologies, all these little modernization efforts together into that integrated process workflow. Yeah, it's interesting to hear you mention the integrated process workflow because that's actually exactly where we're seeing a lot of pull and opportunity for our automotive customers. Specifically, customers like PACCAR or Volvo, they're utilizing augmented reality as part of an integrated workflow, actually, so that they can do simple tasks that, if done incorrectly, can lead to scrap, rework, wasted time. Things like finding a component on a vehicle. You have the new service technicians that you're talking about coming in. May have not seen this configuration before. Using augmented reality for those simple tasks can be highly valuable, is a great starting point. Yeah. There is a lot of focus on upskilling and reskilling, to your point, in terms of enabling those engineers to have access to the information they need at that moment of truth with the customer. I would agree with you there. Talking about augmented reality a little bit, our job is to make our customers' lives easier with the use of augmented reality. What are you seeing in your surveys about the adoption of AR? Yeah, nearly one out of five respondents to a recent survey believe that 50% or greater of incoming calls could be supported by AR. There is a propensity to want to engage with AR experience. Greater than one-third of respondents, 35%, believe that incomplete field visits could have been supported by AR. AR, three out of 10 service leaders are signaling a new technology investment in AR in 2023. It is part of the digitization of the service experience. It is an integral part and perhaps even a prerequisite to achieving proactive service. We think that it is becoming more commonplace to have that AR, VR, MR, XR experience where that technician can see the connection between the digital and the physical worlds together. We're talking about new trends, new technology, younger workforces, acting as service technicians. I mean, let's talk about those younger digital natives for a moment. Have you found any changes based on those digital natives and their willingness to adopt enterprise software? Is there anything they're looking for, different user experiences or differences in how that software operates based on what they use in their everyday lives? We know that their communication methods are a little bit different. I text my 14-year-old daughter, or I call her, and then she texts me. They certainly have their own preference in terms of the way in which they communicate, the way in which they consume information. To your point, they're a little bit more tech-centric in terms of being adopting of new technologies and the expectations of the career that they're jumping into. We still see that there's an importance of creating an omnichannel experience and not creating a one-size-fits-all methodology to how you're enabling your workforce. The demographic of your workforce still spans from those 21-year-olds all the way up to 65-plus-year-olds in some cases. We need to consider the different learning methods that perhaps even the younger demographic has. Think about the omnichannel experience. are a lot of parallels between customer and employee experience. I think that it's important to think about how you can create that omnichannel experience for the diversity of your workforce, depending on their learning methods, depending on their preferences, depending on perhaps even sometimes their limitations in terms of who they are as a person. We need to think about those opportunities to create a pathway for all different walks of life to gain access. We call it a technician-agnostic platform. That is creating this information output and capability platform that enables all technicians to do the same thing. That's really interesting. I mean, so far, we spent a lot of time talking about the technicians, the younger workforce coming in. Let's talk about content authoring for a moment, the authors of these service procedures. There's a ton of data that goes into creating these different service instructions. I mean, how important is the connection to other systems, to other workflows, other inputs, and really fueling not just the utilization of augmented reality, but these workflows in general? Yeah, it's critical. We are hearing a lot more focus on asset lifecycle management from cradle to grave. What you can learn from the manufacturing and engineering process, design process, all the way through the post-sale experience. How does that work its way back in a circular motion to enable design for serviceability and future products that are serviceable and supportable? We see a lot of emphasis on capturing that data, assimilating that data, and making it effectively into the process of refining your go-forward process. There's a lot of emphasis on this. We're hearing a lot more collaboration between service leaders and engineering and operations. We hear a lot more collaboration between service and supply chain. There's a lot more connectivity that's happening by way of thinking about it more as an asset lifecycle, not just that isolated post-sale experience. Really, really good point you made there. I mean, what I find is when we talk to our customers is that there's always going to be the need to take knowledge from an experienced technician and share it with all of the new hires or those that need to be trained. And we provide a lot of great tools to do that. There's a real need for knowledge transfer in the industry today. We're also seeing that the real value can be unlocked when companies can get to scale with the use of augmented reality for guidance, like the component location that I mentioned earlier. The way that you can get that experience to scale is by connecting into those other workflows. There's a wealth of 3D product data that exists in PLM systems. As soon as you can connect that PLM system to augmented reality, you can unlock thousands of variable dynamic experiences that can guide service technicians based on a VIN-specific configuration of a vehicle that they may be servicing. There is a tremendous amount of value when you can connect that digital thread. That has really been a focus of ours recently. We asked service leaders what are their planned priorities for this coming year. Tackling the workforce challenge was number one, of course. There is a lot of people orientation. There is a continued investment and expansion of focus on technology investments. I think it was 67% of service leaders indicated that they'd be increasing their investment in technology in 2023. When we sort of peel back the onion and look at the different types of technologies that they're focusing on implementing or investing in, we actually looked at it from new and expanded investments. On the expanded investment side, they're expanding their investment in areas such as knowledge management, business intelligence, machine learning, IoT, some of those areas that capture data, make data more accessible, democratize data, make it accessible to the workforce and the masses. On the new investment side, interestingly enough, we saw field service management systems and service lifecycle management rise to the number one new investment. It signals to us a couple of things. There's a little bit of a battle between where does the service business reside. Is it in CRM? Is it in its own best-of-breed application? We believe that the more asset-centric industries that are more complex probably require that greater sophistication of tech platform with a connection down to serialized components and some of the things that get deeper into the asset lifecycle management side of things. SLM, that's one area that we think is why that's there as a new investment. The second is still lots of disparate systems. The consolidation effort and bringing it into one platform remains a focus. Absolutely. We covered a lot of topics today. With all the feedback that you've gotten through your Voice of the Field Service Engineer Report, is there anything, any recommendation that you'd leave companies that are watching today with? Yeah, I would leave our listeners to think about the importance of the front line, to perhaps get in the front line and do ride-alongs and learn about their day-to-day, consider them. 40% of field service engineers did not feel they had a role in innovation at their company. 60% didn't believe that management reacted to their feedback to improve their day-to-day life. They're leaving the workplace in masses. How can we get them engaged in the process of innovation so that when we roll out new capabilities, it's not the flavor of the month and we don't turn them out to some new mandate that they have to adopt or they're going to get in trouble? Make them part of the process. They are touching the customer most often, and they're critical to transformation because their adoption is really critical. I would also encourage our listeners to think about this concept of a technician-agnostic platform. With all the challenges of labor and skill set shortage and availability, the opportunity to upskill and reskill is paramount right now. How can you do that? You can do it through AR. You can do it through business intelligence, knowledge management, all the critical data elements that you can make accessible to the front line. We still hear from the front line, they spend an inordinate amount of time on paperwork and admin. That's the bane of their existence, 20% of their day. They spend a lot of time finding information. That's the number two dislike of their day-to-day. How can we create that frictionless experience and upskill, reskill with all these critical technologies that should be part of that woven platform? I think that's really good guidance. As we see the automotive industry evolve, leveraging digital tools like AR can improve workflows and the customer experience. With a focus on delivering an excellent customer experience, implementing the right tools is key. We're excited to see how AR transforms and enhances the industry. Thanks for tuning in to today's discussion.