As manufacturers focus on the benefits of modernization and the competitive advantage it creates, the IT department has gained an increasingly important seat at the table when it comes to the organization’s strategy and direction. If anyone is focused on the digital future, it’s the people tasked with keeping IT systems going, troubleshooting and heading off problems before they become catastrophes, and ensuring that customers, both internal and external, are satisfied.
Keeping an eye on that digital future can be especially daunting when you’re dealing with legacy warranty management systems.
In many cases, existing systems may have been purpose-built to manage warranties over a decade ago. If you’re fortunate, there may still be someone within the organization who was part of the team who built it—they pull the right levers and turn the necessary dials to keep it running. In other cases, the stakeholders who rely on that legacy system have discovered the workarounds to do their jobs, but it’s far from optimal. Claims fall through the cracks, quality and turnaround time plummet, and your warranty manager spends weekends swivel-chairing between software systems to merge the sales and claims data for a report they need.
Ultimately, customers suffer and the manufacturer’s focus on servitization is derailed before it has a chance to gain traction.
“But We Don’t Have the Resources to Modernize Warranty Management Now”
Part of IT’s role in becoming the hero of the story is building a business case for an end-to-end warranty lifecycle management system.
From your perspective, the writing is on the wall: Your team spends too much time and resources trying to make an end-of-life system work. Moving to a SaaS-based model with a partner who can assume the burden of hosting, maintenance, and backups will save time and money. However, leadership may not see it the same way; instead, legacy mindsets around that legacy system see it as a cost center rather than a key to better customer service and increased revenue.
Like your hot water heater at home, it’s tempting to try to extend its life for as long as possible. But that’s a risky proposition: When the inevitable happens and things go wrong, they will go very wrong and ultimately be much more costly. The same is true of your legacy warranty management system.
Ask Yourself and Your Team the Right Questions
If you’re a CIO or project manager, building that business case can start with asking yourself the right questions and presenting answers to key stakeholders. These include:
What needs to improve?
Identify the functional and financial differences between your current state and modernization. This should include how the organization benefits internally, how the product improves, and how customer satisfaction may increase.
What will you save?
Obviously, there will be an upfront cost around modernization. Focus on how quickly you’ll reach the breakeven point and start saving over a realistic timeframe.
What needs to change?
Upgrading your warranty management system must work with the organization’s overall transformation goals. Identify what must change now vs. nice-to-have improvements.
Who needs to be involved?
Build a list of stakeholders, from IT colleagues who will need to maintain a new system and the warranty manager to organizational leadership, to leaders of key functional areas that integrate with warranty management, as well as suppliers, distributors, and dealers.
What does success look like?
In addition to what you’ll save, how else will the new warranty management system benefit the organization? Coming up with these key performance indicators will take some digging and collaboration with the stakeholders you identify.
Better Warranty Management Isn’t Just About Claims and Cost
We recently detailed findings of the Warranty Chain Management (WCM) Benchmark Survey in 2020, conducted by Strategies For Growth. That study found that the top driver of the increased focus on warranty management performance for organizations isn’t cost. It’s post-sale customer satisfaction, followed by a desire to improve customer retention and meet the customer demand for improved warranty management services.
Modernizing your warranty management experience will douse many of the internal fires IT fights with the legacy system. But beyond that, it acts as the cornerstone that helps drive higher margin revenues from loyal customers who get a better warranty experience. Customer-centric manufacturers are embracing this digital future for that reason, and IT professionals are uniquely positioned to champion and drive the transformation.