"The first book's chapter on Business Value explored a number of different issues. It did this by observing the transformation of business from selling a product@ and deriving future income from spare part sales@ to selling a service in which regular income is received in return for effective maintenance of the asset. The resulting service business requires a much deeper understanding of how the asset is used and how parts degrade@ and hence can be maintained@ thus providing the rationale for IVHM. This book explores these areas in greater detail@ and is principally focused on two major questions: ? How does an organization make a viable business from a service proposition? ? Given that a service is going to be provided@ how much should be spent on IVHM in support of the service? The first question is usually answered by the construction of a business model@ while the latter is addressed by a business case@ although common terminology has not been agreed upon. Both approaches can be fraught with difficulties once the details are examined and ways of reducing risk@ for example with risk and revenue sharing partnerships@ are often sought. In constructing Business Models@ for a new product in a service wrapper@ regular income will appear as the customer pays for the service. This has to be set against maintenance activity that can be many years downstream and unscheduled events such as ""infantile mortality"" (unexpected consequences of new product introduction) that have to be managed. Similarly@ when a new service is to be offered@ should the outlay on IVHM be 0.1%@ 1%@ or 10% of the asset's cost@ or should it be related to the value of the asset in service? In this respect@ IVHM could be viewed as an information system that is integral with the product in service@ an insurance policy@ or as risk mitigation@ although the through-life cost and implication of operation cannot be ignored. The objective of this book is to provide the tools and techniques for constructing a business case while also providing some of the context in which the case is framed@ addressing questions such as: ? What markets are being targeted and will the local cultures be accepting? Will the provision of IVHM imply service provisions (e.g.@ data retrieval) that cannot be met? ? Can IVHM address a number of issues with a platform at the same time (e.g.@ safety)? ? Will the incorporation of this technology give us a market lead over our competitors? It is essentially a book for the commercial@ rather than the technical side of the organization@ but should prove readable by both. Before proceeding to the main content of the book@ it is useful to consider@ at the very highest level@ the interaction between the many different and varied entities that come together to deliver a complete service and how the understanding of their individual roles can lead to new businesses being created."
SAE R-414-2012 history
2012SAE R-414-2012 Integrated Vehicle Health Management Business Case Theory and Practice