In this 15-minute podcast, I’m joined by Emerson’s Johan Classen to discuss how enabling technologies that the Industrial Internet of Things brings is changing the way services can be delivered to process manufacturers and producers across the lifecycle of their operations.
Jim: Hi, everyone. And welcome to another Emerson Process Experts Podcast. Today, I’m joined by Johan Claassen, who is Vice President of Global Lifecycle Service Operations for Emerson’s Process Systems and Solutions business. Johan has an electrical engineering degree from the University of Pretoria in South Africa and has been with Emerson for more than a decade. Prior to his work with Emerson, he was an engineering and maintenance manager with Sasol, in South Africa. Welcome, Johan.
Johan: Hey, Jim. Good to be with you this afternoon.
Jim: That’s great. Let’s start out by asking, what made you decide to pursue a career in services?
Johan: You know, it was actually the way that things just unfolded as, you know, when I started after my university degree, I started with Sasol, you know, in South Africa. And I guess all of my 23 years of my career I’ve been kind of in the services trades, I’ve just been on a different side of the fence. So with Sasol, you know, I grew up as an engineer. And, you know, I quickly went onto management and maintenance management and operations management. And, you know, so I got to see services from a customer perspective, you know. And then, through Emerson, I’ve got the opportunity, now, to see it from a different angle, you know. And, how do we supply services to our customer? And, you know, it’s kind of been interesting. I always say that I’m still a customer at heart because of that 13 years. And then, Emerson, I’m now 10 years so, you know, it’s getting close where I can’t say that anymore. But I think it’s great to have been on both sides of the coin and working with customers. You know, services, for me, is the place in the company where we deal with customers pretty directly through this. It’s where, once they’ve installed your products and your technology, you know, this is where we come in and help them, you know, just servicing but also drive the value out of the investment that they made. And I think it’s that aspect, for me, that really drives me to the service business and give me a passion and energy to get up every morning.
Jim: Well, I think that’s really valuable, having that background and being in the shoes of the customer for having lived it so many years. So tell us about market trends and growth opportunities you see in Lifecycle Services?
Johan: Well, I think, Jim, if I look at some of your posts you’ve had in the last couple of months here, we know that the industrial Internet of Things is a big…will have a big influence on our business going forward. You know, digital transformation, mobile, all of those trends are things that, you know, not just affects our products but it also affects our services. And, you know, if we look at all of that coming together and, you know, as customers are embracing, you know, digital and IoT, I think it’s going to fundamentally change the way that we do service through. So if you think about that, more and more assets will be connected as customers become more comfortable with, you know, connecting the asset into the cloud and sharing data up there. And, you know, fundamentally what will happen is that it will necessitate the need for our service people to go to site and make that less and less true. Because as you are more connected, there’s no need anymore to, you know, to go and do monitoring on-site. You know, we will do that out of the comfort of our monitoring centers, our offices or wherever our field service people are stationed, so I think that’s one trend.
The other side that I think has been going for quite a while is what we call the consumption/the consumption gap. And that’s something that, you know, is not our new term. It’s something that TSIA or the Technology Services Industry Association have coined. And, you know, they talk about the complexity avalanche that’s happening with…you know, as technology companies like ourself are introducing more and more functions and features to our products, it’s the ability of a customer to leverage that function and feature to, you know, to deliver a business outcome. And I think that’s where people are struggling. And then, two, have kind of…you know, so functions and features have been increasing but the ability to leverage that, you know, has kind of been slowly growing so that creates a gap. And I think that gap is where, we, as Emerson can come in from a service point of view and really help our customers to drive value from the investment that they’ve made. You know, so that’s the second trend, you know.
And then, I think as we…and we’ll talk a bit about it probably later. Is, as we think about the new millennials…I know everything these days if you look at the millennial generation, everything is done digitally. Everything is done on mobile. They like doing everything in apps and, you know, so I think if you look at business models, business models is going to be changing as well. You know, from where I think, traditionally, customers have been, you know, they buy our technology. We help them implement that through our project services. And then, you know, we’ll come through with services and kind of you know, maintain it. And, perhaps, if they have problems, we’ll help them. But I think there’s a new trend that’s coming where they’re saying we don’t want to own the product anymore, we just want to buy an outcome. And that’s where, you know, business models like -as-a-Service…you know, Software-as-a-Service, Product-as-a-Service, Platform-as-a-Service…you know, anything -as-a-Service will come in. And I think that is, again, where services will have a huge part of to play because it is a subscription model. You know, it goes for three years, five years, you know, and we will have to manage that. And I think those are key trends that’s going to really fundamentally change the way that we do business and service in the future.
Jim: Yeah, I think that really resonated with me, what you said about that gap. Because, you know, in no matter what the technology applied, it doesn’t seem like we know everything about it and we’re not getting all the value. And to be able to have some kind of service or an expert come in and really get that value from what some of those extra functions can be really valuable in this digital transformation. So speaking of those digital transformations, how do you see that and IIoT changing they way we, as Emerson, work with and develop relationships with our customers?
Johan: So again, it ties to what I said. I think it will definitely change our business models on, you know, how do we sell to our customers. You know, not just being able to sell the product and, you know, just transferring the technology through that sale. it will be where I think the risk will transfer onto Emerson. And customers will say, “Well, you know, I’ll pay you if it works. And I’ll pay you a monthly subscription fee.” So it’s pay-by-use, you know, those are kind of things that I think will change it. Change the way that we sell.
And, also, I think there’s…if you look at the future, you look at artificial intelligence and machine learning. There’s also things that, you know, as you go to market, I think it’s going to be a differentiator for companies that develop that and develop it in a sense where it can make things easier for the customer, too. Where you can come in and say, “Well, you know, when, traditionally, to service you with that, you know, we had to use people to do basic fault-finding. Through AI and machine learning, I think, the basic fault-finding will be done by algorithms, too.” And that will make it cheaper for the customer. You know, it will kind of reduce a bit of our dependence on service people. But, you know, we’ll use those service people for the tougher problems to solve that AI and machine learning, in the beginning probably won’t. You know, you’ll still need…there’s a lot in the media around AI will come and replace humans. I don’t think so. I think it’s just, where we apply humans will be different, you know.
Jim: Right. Kind of change the nature of…
Johan: …of what they do, you know, and move more towards the complex problem-solving, etc. So I think those are things that’s really going to drive change and how we interact with our customers, you know?
Jim: Why is the role of a customer value manager so important in the new outcome-based service model?
Johan: So, as you think about -as-a-service, you know, it’s clearly something that’s new in our business but not so new in the IT space. So customer success or customer value manager is the concept that we really got from the IT industry. And I think the IT industry, as they have implemented these -as-a-service models — monthly subscription or yearly renewals — you know, they realized that there’s a need for someone that needs to be working close to the customer to deliver that value and that outcome. And, you know, so it’s…gone are the days where you can just leave the customer and just selling a subscription. Because if you do do that and he doesn’t see the value, you know what happens — he cancels the subscription. I mean that’s what we do, you know, we…I’ve got golf apps. And if I see there’s a new feature on another golf app, what do I do? I just cancel my subscription. It’s very easy. I mean you don’t even talk to someone. You just go in and you say cancel and it’s done, you know. So I think that’s going to be…and that’s the value of this person, this new role in the organization that is really working closely with a customer, not just as a contract manager but truly understanding the customers’ business, understanding their processes, and how this -as-a-service model will help them drive value. And measuring it through KPIs and just constantly being there for the customer and really be the person that closes that consumption gap, too. He needs to be that same point of contact between the customer and Emerson, in bringing in resources, as required.
Jim: Yeah, that sounds just critical because, especially in measuring the value of it. Customers are so busy just doing what they can to produce the things, they don’t necessarily stop to measure what that value. So having that to show that it is delivering business value is a critical thing. So tell us about a recent challenge that you’ve been working on to solve?
Johan: So I think it’s kind of a bit related to what we’ve been talking about. As, you know, we think about digital, again, and we think about mobile, you know, I’ll be the first one to say this. In, you know, that if you look at our service business, we’ve kind of been old school in how we do service. You know, we do things very manual, very paper-based. You know, but we like to talk about digital and Plantweb and all these kind of, you know, great digital concepts but the way we do business is still very, very manual. So one of the challenges we had to overcome is…and, also, getting ready for this transformation and all these new trends coming our way is, how do we, you know, transform digitally, inside our own business, you know? And the one area that we looked at is how we interact with customers from a field service point of view? So we wanted to make our interaction with customer easy, and simple, and fast. You know, from where they request a service to where we invoice them for that service/we complete the work. And we’ve looked at our whole business process, you know, right through. And we’re taking that and we’re making it mobile and we’re making it digital. We’ve partnered with Oracle and their cloud solution to do that for us. And, you know, in the next month, here, we will be ready to launch our first application in that space to do that. So, you know, again, it’s a growth automation solution so, you know, trying to solve it for all our business units and just improving the way that we do business from a service perspective.
Jim: It’s great to hear that digital transformation going on, even the boundaries between suppliers and customers and making that more seamless. That’s definitely going in the right direction, there. I love that. So outside our world of process automation, what do you personally enjoy doing in your spare time?
Johan: So I’m the fortunate father of two daughters. And you know, we recently became…you know, Tanya and myself became empty nesters. So we now have…you know, it’s a different phase of our life. And, you know, we’re just enjoying time to get to know each other again, so that’s taking a lot of time and you can do things different, now. So we love to go out and just enjoy life and, you know, dining and, also, the outdoors. I know, at this point, probably not the best time, in winter. But, you know, Austin’s a great place and I love just traveling, you know, through Texas and seeing different places, just hiking, etc. And then, you know, the one that’s probably more contentious — my golf. You know, I do love golf and, you know, I’m trying to get to a single-digit handicap so that takes some time. But, hopefully, in the future, we’ll get there.
Jim: Well, that sounds great. From one empty nester to another, it is a different and exciting phase of life so congrats on reaching that milestone. So I guess, finally, as a wrap-up, what opportunities does Lifecycle Services offer for millennials, you know, starting their careers in the field of process automation?
Johan: That’s a great question. And it’s something that I know we, as the service council, have been talking about. Is, how do we attract young and upcoming professionals into our service business? I think a lot of people has always seen services…you know, I always talk about the complaints department and how we change that, you know, and that perception of what service? And it is a lot more. You know, as I’ve talked today about digital transformation and how we’re embracing it. We are looking at millennials and we know that that’s the next generation. And you know, if you think about, again, how they transact, you know, through Amazon and Uber, it needs to be easy, simple, and flexible, too. And, you know, and we, definitely, as we look at our offerings, we look at messaging, and we look at our solutions, we’re trying to align with that and make things mobile and make it easy and make it an application you know, that they can interact with. What better place to be than in the area where over 60% of our revenue is coming from and where people like Mike Train and Sabee Mitra want to see a lot of growth. And I think that is an area for me that, why would you not want to be there? It’s a growth area. It’s where we’re going to grow, you know, significantly and invest significantly.
Jim: Yeah. And I think if you look at it from our customers’ side, they’re challenged with doing so much more, maybe, with fewer people and everything else so they naturally want to rely on key partners to help them with…through that part of it. It just makes a lot of sense.
Johan: They want to focus on the core business, you know. They want to focus on making products and, in the end, leave the, you know, the speciality to suppliers and OEMs to come in and provide the service for them.
Jim: Well, Johan, thank you so much for joining us, today. I really enjoyed it.
Johan: Thank you very much, Jim. Great spending time with you.
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