Welcome!

News Feed Item

IBM Study Uncovers New and Innovative Ways for Electronics Companies to Improve Warranty Operations and Reduce Costs

Advances in predictive analytics, cognitive computing and Internet of Things (IoT) offer an opportunity to transform traditional warranty processes

ARMONK, N.Y., April 20, 2017 /PRNewswire/ -- IBM (NYSE: IBM) today announced results from a global benchmark survey analyzing electronics industry warranty performance, finding significant potential for improvement in warranty and supply chain operations.

According to the new IBM Institute for Business Value (IBV) study, Powering Warranty Reinvention: How Electronics Companies Leverage New Technologies to Improve Warranty Management, many companies don't put enough focus on effective warranty management or treat it as a competitive differentiator. Warranties are a critical part of product upgrades and launches, particularly for electronics companies that constantly introduce new features, software or experiences. Underestimating the operational impact of returns and repairs can have a profound effect on company reputation and bottom line.

  • On average, warranty costs are close to 3 percent of revenue of those companies surveyed.
  • Of that 3 percent, less than 1 percent is actually spent on direct repair or replacement of defective goods.
  • For a one-billion-dollar company, that's USD 20 million in processing and administration costs across the repair cycle.

IBM assessed the warranty management performance of 304 surveyed electronics companies in North America, South America, Europe, Asia Pacific, the Middle East and Africa. The survey evaluated the potential impact of new warranty management practices across four key areas: reduced operational costs, improved brand integrity and customer experience, identification of new revenue streams and competitive differentiation.

The study uncovered three key competencies common among companies with highly effective warranty management:

  1. Standardized processes and improved communication across organizations to reduce cost and improve insight.
  2. Increased traceability back from warranty management into manufacturing and the supply chain.
  3. Broadened interactions and information sharing across the ecosystem, including support for customers, service providers and the original equipment manufacturer (OEM).

The results also demonstrated that average warranty costs for bottom performers were 50 percent higher than costs for those at the median and 150 percent higher than those at the top. That means a company with USD 1 billion in revenue could expect warranty costs that are USD 27 million (or 150 percent) higher, on average, than a top performer.

"Effective warranty management does not only improve your bottom line, it can also can have a direct impact on customer satisfaction and retention," says Cristene Gonzalez-Wertz, Electronics Research Lead, IBM Institute for Business Value. "If consumers believe a company treats them fairly when products fail to live up to expectations, they are more likely to buy the company's products in the future, building brand loyalty."

IBM also found that, when integrated successfully, IoT can be a powerful competitive differentiator, increasing the potential for new revenue streams through innovative commerce and data sharing/insight opportunities. IoT data can be combined with existing warranty data to obtain new insights into companies' customers, products and operations. In turn, this can lead to enhanced support processes, optimized product service, and the provision of new and differentiating experiences for customers, all of which can help drive revenue. Enabling a 360-degree digitized view also allows companies to forecast warranty costs more and predict detection of problems earlier.

Based on the global study findings, IBM recommends that electronics companies start improving their warranty management systems by taking the following steps:

  • Simplify and standardize warranty processes across products, divisions and repair teams
  • Increase process automation
  • Communicate warranty and service information to business functions
  • Use technology and big data to improve accrual management
  • Use advanced analytics for fraud detection

Access the full IBV study findings here.

For more information about the IBM Institute for Business Value visit www.ibm.com/iibv

Media Contact:
Suzanne Cross
[email protected]
617-693-1811

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ibm-study-uncovers-new-and-innovative-ways-for-electronics-companies-to-improve-warranty-operations-and-reduce-costs-300442968.html

SOURCE IBM

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...