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Increase in Maintenance Outsourcing, OEM Post-sales Service Driving Field Service Market
Field service management solutions market seen reaching $532 million as manufacturers look to increase revenues, offset lower product margins, ARC reports
Dedham, MA — October 2, 2008 — An increase in maintenance outsourcing and OEM post-sales service is expected to drive greater sales for field service management (FSM) solutions in the years ahead, as manufacturers seek to increase revenues and compensate for lower product margins, according to a new ARC Advisory Group study.
The worldwide market for FSM solutions is expected to grow at a compounded annual growth rate (CAGR) of 7.8 percent over the next five years, rising from $364.6 million in 2007 to a forecasted $532 million-plus in 2012, ARC reports in "Field Service Management Solutions Worldwide Outlook."
A number of publicly traded, best-of-breed field service management suppliers have been reporting strong revenue growth over the last few years. "The FSM revenues of these three best-of-breed suppliers registered a combined compound annual growth rate of 17 percent for the 2004-2007 period," according to Clint Reiser, enterprise applications analyst at ARC and principal author of the report.
"Solid growth in the FSM market is forecasted to continue," Reiser added. "This growth is expected to be driven largely by an increase in maintenance outsourcing and OEM post-sales service to asset intensive manufacturers."
FSM software has enabled OEM post-sales service organizations to more effectively administer the complexities associated with managing an overabundance of information and a large, often geographically dispersed workforce, ARC said. Equipment OEMs are expanding their product offering with post sales services in an effort to increase revenues and offset decreasing product margins.
These services come at an opportune time when many manufacturers face labor constraints due to a limited pool of available skilled workers. A continuing increase in services offered by these organizations is expected to result in an uptick in demand for field service management applications.
In addition, novel technologies, such as mobile wireless, geographic information systems (GIS) and remote asset monitoring, are expected to stimulate growth in the FSM market. Mobile wireless is considered an area with a great deal of growth potential.
The worldwide market for FSM solutions is expected to grow at a compounded annual growth rate (CAGR) of 7.8 percent over the next five years, rising from $364.6 million in 2007 to a forecasted $532 million-plus in 2012, ARC reports in "Field Service Management Solutions Worldwide Outlook."
A number of publicly traded, best-of-breed field service management suppliers have been reporting strong revenue growth over the last few years. "The FSM revenues of these three best-of-breed suppliers registered a combined compound annual growth rate of 17 percent for the 2004-2007 period," according to Clint Reiser, enterprise applications analyst at ARC and principal author of the report.
"Solid growth in the FSM market is forecasted to continue," Reiser added. "This growth is expected to be driven largely by an increase in maintenance outsourcing and OEM post-sales service to asset intensive manufacturers."
FSM software has enabled OEM post-sales service organizations to more effectively administer the complexities associated with managing an overabundance of information and a large, often geographically dispersed workforce, ARC said. Equipment OEMs are expanding their product offering with post sales services in an effort to increase revenues and offset decreasing product margins.
These services come at an opportune time when many manufacturers face labor constraints due to a limited pool of available skilled workers. A continuing increase in services offered by these organizations is expected to result in an uptick in demand for field service management applications.
In addition, novel technologies, such as mobile wireless, geographic information systems (GIS) and remote asset monitoring, are expected to stimulate growth in the FSM market. Mobile wireless is considered an area with a great deal of growth potential.
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