Maintenance Customer Trends

Maintenance Trends for 2022: Sustainable IT

Sustainability has become one of the biggest topics for leadership in both B2C and B2B businesses this year. These initiatives are dominating our world in multiple capacities. This includes the political bills being debated in Congress to the type of straws people are using with their morning summer drinks. People care how the companies they work with are addressing sustainability. In an increasingly competitive ecosystem of maintenance providers, sustainability initiatives should be top of mind for executives in 2022.

According to a recent Forbes report on The 8 Biggest Business Trends of 2022:

Every organization must seek to eliminate or reduce the environmental costs of doing business. Decarbonizing the supply chain is a sensible place to start, but forward-thinking businesses are looking beyond the supply chain to improve sustainability across all business operations.

Companies Focused on Adaptable Partnerships Grow Alongside Clients

Companies that want to show their sustainability must first prove their adaptability to their customers. A CEO can start by asking:

• How has your company changed to meet the growing importance of sustainable business practices?
• What systems or vendors do you have in place to help you reach these goals?
• How is your company tracking your efforts?

In a world of increasing transparency customers look to utilize vendors in line with their own green initiatives and who can provide data to support their claims.

Does your company have a green IT initiative? If you are employing any sort of TPM into your client’s maintenance, then the answer is already yes. If your TPM provider is using artificial intelligence to run service delivery, then you are even more effectively green than your competitors.

Here are a couple ways TPM contributes to a more sustainable IT globally.

Extend the Useful Life of Current Customer Equipment

One common myth that many customers hear from their OEM’s is that they need to refresh – essentially rip and replace – their existing hardware every 3 years. While this may drive profits for the OEM, the cost on the environment as well as the rising budget pressures on companies to fund such large capital expenditures just isn’t sustainable, long-term.

OEMs often force customers to upgrade their equipment as soon as it reaches so-called end-of-life (EOL) or end-of-support (EOS) status. But just because a contract or warranty has expired doesn’t mean the equipment is no longer working. TPM can provide full-service support in these circumstances, including replacement parts and technical support.

Many OEM’s have a list of reasons TPM is a risky fit for enterprise customers. There are cases where TPM should not be used in place of OEM support. It’s important for companies serving enterprise customers to understand what those cases are. Many independent analyst firms including Gartner and IDC have written on the benefits of utilizing a Hybrid Maintenance Strategy. If you want to learn more, here’s a quick read on the subject, Should Your Business Consider Using TPM?

Waste Management in IT Supply Chains

Regardless of industry the 3 tenants of waste management are reduce, reuse, and recycle. But how does this relate to channel partners and IT maintenance?

According to a 2016 report, Gartner estimated that more than 10 million data center/network devices were under TPM, and 71% of very-large enterprise customers leveraged a TPM for support of some devices.[1] That’s 10 million devices that were saved from unnecessary obsolescence and kept out of an already overburdened IT waste management and recycling system. This kind of extension of equipment is more important than many companies may realize when it comes to sustainability.

Although efforts to recycle have grown since 2014 according to a recent report, “only 17.4% of e-waste is known to be collected and properly recycled.” The recycling for e-waste in the USA alone (one of the largest e-waste contributors) is only at 16% right now.

Efforts to build more effective means of e-waste recycling are underway but they take time to scale and bring on-line. Usage is currently outpacing our ability to effectively process e-waste globally. Anything a business can do to reduce or reuse current IT matters. This includes asking important questions like whether an upgrade is being driven by a real business need or by a default policy from the OEM.

Companies looking to not only grow a more sustainable business but also looking for ways to fund their digital transformation would benefit from a channel partner that was able to offer them alternative maintenance solutions. A hybrid maintenance strategy that combines both TPM and OEM support can effectively reduce the environmental footprint and cost of IT maintenance.

Use TPM to Drive Green IT Initiatives and Larger Profit Margins

Building a more “sustainable” business does not have to be at the cost of a channel partner’s profit margins. Not only does TPM provide customers with up to 40% off OEM support costs, but it also drives larger profit margins for channel partners to sell TPM rather than hardware. On average TPM contracts provide 30% margins to resellers. Most hardware sales drive a much lower margin and a much higher cost to clients.

Simply by extending the useful life of existing equipment a company can reduce the output and slow down the consumption of resources. Simultaneously a reseller that understands a Hybrid Maintenance Strategy can also drive better profit margins and savings for their customers.

The Circular Economy in IT Maintenance

As the saying goes, “one man’s junk is another man’s treasure.” For industries looking to reduce their carbon footprint, finding a way to match old resources to new users is another way to effectively expand green initiatives. “A circular economy is “a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products as long as possible.” [2]

 Many TPM providers offer or partner with IT Asset Disposition companies. For companies where extending certain equipment isn’t a fit for their particular needs, partnering with a TPM with an ITAD component means that that old equipment will continue to find use. ITAD companies ensure that equipment is properly cleaned of data and repair, reuse, resell, or recycle old equipment, saving it from the landfill.

Data Transparency Powers Sustainability for Businesses

As CEOs look for smarter ways to create greener outcomes for the environment and their bottom lines, the role of data moves to the forefront of every conversation.

Driven by increased demand for environmental accountability in manufacturing ecosystems, IDC analysts predicted that by 2025, 40% of G2000 manufacturers will use traceability technologies to mitigate risk and boost transparency. Gartner analysts predicted that by 2025, 40% of all manufacturing IT will own the responsibility of data modelling for sustainability and net zero carbon targets. Over 53% of manufacturers are already investing in data infrastructure, business analytics and AI, and data orchestration to meet these demands.
–Forbes

Most TPM companies are still using a manual process to predict and spare parts for clients, often charging multiple clients for spares (especially for ones that have a very low rate of failure) in various FSL’s. This results in higher costs for clients and less accurate back-ups. Large inventories also create a much bigger footprint environmentally as wasteful sparing strategies require larger FSL facilities and energy output to house all the equipment. It’s important for CEOs looking to implement Hybrid Maintenance Strategies that they also look to find TPM partners doing the most to mitigate wasted resources using intelligent solutions.

The Role of Artificial Intelligence in IT Maintenance Sustainability

Artificial Intelligence is driving greener IT maintenance. When AI is used to help build a company’s Hybrid Maintenance, it works on a much leaner and more accurate model.

Risk profiles are built accounting for a multitude of factors including equipment type, location, and need at the individual company level. Quotes are much more accurate and less wasteful.

Parts are stocked intelligently, against a real strategy. This means companies aren’t paying to overcompensate for unknowns with more equipment and resources. With a truly intelligent service provider, companies can be assured that they are only paying to spare and house the equipment and personnel they will need to meet their service’s needs.

Change Your Understanding of Risk to Succeed

CEOs are under a lot of pressure to increase profits while also steering long-term initiatives for their companies. Utilizing a provider that uses TPM and data science will support both these goals. With a partner like CloudCover the strategy changes from, “how many parts should we stock?” to, “how are we going to deliver service if that low probability component fails?”

A TPM provider using AI focuses on producing better outcomes overall including pricing and delivery. Those outcomes also lead to less wasted resources and a greener IT practice for every company they serve. Utilizing a Hybrid Maintenance Strategy ensures you are participating in a more sustainable IT future for yourself and your maintenance clients.

Learn more about the latest trends in IT maintenance delivery by getting a demo of the CloudCover Platform.

[1] Gartner, Market Guide for Data Center and Network Third-Party Hardware Maintenance, Rob Schafer, Christine Tenneson, Mike Toussaint, Daniel Bowers.

[2] https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits