We have all experienced that moment… staring at a dysfunctional product and wondering what the repairs will cost us. And more importantly… is the product still under warranty? As a customer, it seems like a solid and straightforward customer service process, yet the warranty management process is viewed as a manually intensive administrative task that’s not exactly the most productive or efficient.
Warranty management is a critical set of processes and activities within service life-cycle management.
While manufacturers may have viewed the warranty management process to be a drain on resources and revenue, technology has changed the game.
Technology: The pill to warranty management headaches
In an increasingly competitive world, manufacturers are beginning to recognize the opportunity technology offers. Not only in terms of minimizing costs but also in enhancing customer experience through optimization of the warranty management process.
By optimizing warranty processes, manufacturers can reap financial and operational benefits and positively impact their entire service life-cycle: increased asset reliability, better production, and improved supplier relationship management.
Studies show that the market for warranty management systems is valued at $2.87 billion in 2019 and is expected to reach $6.24 billion over the next five years, growing at a CAGR of 13.8%.
Let’s look at some of the issues that warranty management solutions can resolve:
Problem: Multiple Stakeholders
The warranty process runs across multiple partners, which can be both internal and external, to the manufacturer. It’s easy to lose sight of metrics within this network of dealers, partners, and OEMs. As a result, product performance, usage, and ultimately, the customer experience gets affected.
Technology Solution: Warranty Management Systems
Software solutions can radically improve connectivity across the service life-cycle. Warranty management solutions can help reduce claims processing by 70%, by bringing all stakeholders together into a seamless system. Warranty Management Systems can positively impact collaboration with suppliers, channel partners, and customers by enabling manufacturers to focus on functionality that provides visibility into a product’s warranty life-cycle.
Problem: Information Siloes
The lack of transparency has many manufacturers struggling to gain visibility into their customer or product usage. This is especially true in industries where products are sold through dealers, retailers, distributors, resellers such as automotive or other equipment and machinery. With so many stakeholders involved, it is apparent that information is disconnected, leading to inefficiencies, delays in new product introduction, and ultimately dissatisfied customers.>
Technology Solution: IoTs and Closed Loop Collaboration
The ability for warranty operations and other service processes to leverage connected product data hinges on the number of connected assets. While the data is available, legacy systems often prevent visibility across relevant teams. By connecting smart devices and sensors and the data generated by machine networks, manufacturers can access a new level of insight needed to intelligently update the warranty claims processes.
Problem: Time-Consuming and Fraudulent Claims
One of the reasons warranty management is considered to be a costly affair is due to the amount of time and resources needed to investigate warranty claims. Time to process a warranty claim often requires customers to wait without their functioning product leading to increased frustration. Where the processing is still manual, errors and fraud can further derail the warranty management process.
Technology Solution: AI & Machine Learning
AI-driven real-time analysis of warranty claims helps understand behavior based on environment and recommend efficient product usage. This technology can help improve performance, reduce failure rates, and enhance productivity. Additionally, as more data is fed into the system through IoTs, machine-learning can enable automated warranty processes to make recommendations at a much faster pace than ever before.
Problem: Duplication of Efforts
Redundancies in data can cause a lot of problems in warranty management processes. It is estimated that more time and money is spent that more time is spent on administrative tasks such as updated customer information than on resolving the problem. This duplication of data inadequacy can often result in errors and more siloes within the service life-cycle process.
Technology Solution: Automation
Automated warranty claims systems can enhance process efficiency by reducing or eliminating manual efforts in claim submissions such as parts return and payments, turnaround time, and increasing productivity. Data accuracy will also be improved human error can be circumvented, reducing errors and redundancies.
The future indicates that with the increasing use of smart devices, wearables, and smart home units, adopting a warranty management solution will likely enable an unparallel customer experience.
Technology partners that offer warranty and service contract management expertise, which leverage AI and ML, will provide a distinguished advantage to the manufacturers. And manufacturers that quickly move towards a system to take advantage of these capabilities can secure their business competitiveness through increased customer satisfaction and enhanced product quality.
SOURCES:
https://www.mordorintelligence.com/industry-reports/warranty-management-system-market
