Warranty as a Service vs a Warranty Management Software

For manufacturers to sustain their business today, the need to address complexities in warranty management processes is crucial. In recent years, market agility has seen a progressive move towards personalizing services. To meet such customer expectations, businesses today must employ efficient warranty management software that addresses the complexities of a product’s warranty lifecycle management.

Cost-effectiveness also plays a crucial role in managing warranties of different products across portfolios. An increase in the cost of managing a warranty would mean an added cost burden on the company revenues which has an inverse effect on the profitability of a company. Such is the level of synchronization required to attain a balance between efficient and cost-effective management of a warranty. 

This has also brought about an interesting outlook towards the overall warranty management process. These two different approaches are Warranty management and warranty as a service. The outlining principle of both these approaches is to streamline the processes of managing a warranty, there are striking differences between the implementation, structure, and functionality of these approaches to the process.

To understand the difference between these two approaches to warranty management, we will dive deeper into the functions of these processes and understand their impact on the process.

What is Warranty as a Service?

Warranty as a service is a model based on an outsourced approach to warranty management as it implies that a manufacturer completely outsources the complex process of managing a product warranty to a third-party provider. The company that provides this service is responsible for providing all services to the customer. This would mean that the third party would own solving customer queries related to the warranty of a product. The third party manages the entire process with a service cost charged.

Complying with the manufacturer's policies, the third party would ensure timely delivery of customer service to cater to customer queries. In the warranty as a service model, the third party would act as an extended arm of the central warranty management team where there are coordinated efforts to improve and enhance the efficiency of this process and work towards making this a profitable functional area of the business. To further understand this model, we would need to explore its key components:

1. Claim Management: From the moment a claim is raised, the third party would ensure the warranty claim is processed, the due verification is completed, and a response of approval or rejection has been communicated to the customer. There are various SLAs the two parties involved get into. As a provider of a crucial function to manufacturers, the warranty provider has to ensure a smooth and defined claims management process. 
2. Replacement and Repair: Under warranty as a service model, the logistics have to be managed by a third party. The third-party would manage repair centers where the replacement logistics are also handled. After a claim is processed, these repair centers would be enabled with the utmost facilities and policies to ensure smooth management of these centers. 
3. Customer Support: Essential and proportional to the existence of any company, this service function has a massive effect on the overall functioning of the company. In this model, the third party would ensure the training and enablement of the personnel to the company policies. 
4. Reporting and Data Analytics: This is an area that directly impacts the futuristic growth of the company and helps craft strategies to augment the marketing and growth teams. Under warranty as a service, the trends in the process would be studied and necessary reporting would be done. This helps gain insights from the trend analysis and reports shared and lay down strategies for future company campaigns. 

What are the Pros of Warranty as a Service?

This model is very effective in cases where manufacturers want to reduce the burden of handling the complexities of the warranty management process. In addition to this, various other factors play an important role in ensuring smooth warranty claims processing. 

1. The Operational Burden is Reduced: We all understand that warranty lifecycle management is a complex process with various touchpoints where the data is exchanged and providers capture that data to gain insights into warranty data analytics. Outsourcing the entire warranty management process enables manufacturers to focus on critical and core business functions to drive revenue and business growth.
2. Reduced Costs: This model reduces the additional cost burden on the manufacturer. When it comes to managing customer queries of warranties, there would be a need to employ resources for training and costs for infrastructure and technology. Warranty as a service eliminates these costs by managing the entire warranty management process.
3. Scalable Solution: When opting for this model, manufacturers often have questions related to the scalability of this process. As the third party is capable of managing the process, they also offer scalability and can handle a large volume of customer queries related to product warranties. As a scalable solution, the third party can also manage customer queries for products across multiple regions. 
4. Enhanced Efficiency and Expertise: Third parties offering this solution bring their expertise, and specialized knowledge and employ standardized warranty management processes to ensure fair and efficient functioning. By employing industry best practices, the third party ensures smooth and accurate warranty claims processing for various product lines across the manufacturer's product arsenal. 
5. Quicker Implementation and Integration: As the entire process is managed by the provider of this model, the said third party would ensure quick implementation and integration of warranty services by eliminating the time taken for extensive training and development. This would also reduce an added responsibility on the manufacturer and enable them to manage the crucial business processes and aspects to focus on future growth. 

What Are the Cons of Warranty as a Service?

Now that we have understood the pros and how it enables businesses to strategically focus on crucial business tasks, let us understand how this dependency can also have negative implications on the warranty management process for manufacturers. With crucial and complex management, there are diverse aspects that a manufacturer needs to clarify before entering into such an agreement as it would mean dealing with crucial customer data and ensuring security and transparency in processes. 

1. Increased Dependency: In this model, there is a higher dependency on a third party for warranty claims processing and delivery of services. This means there have to be measures undertaken to ensure a transparent process. There also has to be some control of the manufacturer on the entire process where crucial checkpoints are analyzed and customer satisfaction is given a top priority.
2. Customization of a Process is Limited: When a manufacturer manages the warranty of a product, they have the option to offer customizations and personalize the warranty as per their needs and requirements. With third-party management, there is a limitation on this process as the manufacturer would be reliant on the third party. 
3. Security of Data: This is a major area of concern for every manufacturer outsourcing their warranty management process to a third party. Customer data privacy is a humongous task today and ensuring such compliance is key for businesses across diverse domains. This model brings in the risk of customer data privacy and security of customer data. Providers of this model would need to ensure a transparent process where they prioritize the security and privacy of the customer.

With such complexity in the management and delivery of services to customers for warranties, it is a process that is of extreme importance to the manufacturers. An efficient process would mean that the warranty claims are processed quickly, there are no delays in customer communication, the security of customer data has high importance and there are service level agreements to ensure smooth functioning of the warranty process. Now that we have understood warranty as a service model, let us move further to understand the second aspect related to the management of this process.

What is Warranty Management Software?

This is a technology solution that most companies employ to streamline their customer claims processing to repair or replacement. This is a comprehensive software that is easily integrated into the ERP systems of a manufacturer. With such a solution, it becomes easy for manufacturers to understand the customer needs and also provides analytics and insights into the warranty data for various products. An automated offering, warranty management software provides a deep understanding of the scope of improvements in various internal functions of the entire process. This software is also customizable and can cater to various needs and requirements of different companies. 

What Are the Components of Warranty Management Software?

There are various components of this software. It can help streamline and automate the entire warranty process for companies. Let us understand the crucial components of this software in brief.

1. Claims Processing Automation: Whenever a claim is raised, there are some key functions associated with that claim. A manufacturer would need to validate the claims and initiate the claim. Post the validation and initiation of the claim, this software also enables a tracking mechanism for each claim which provides a deeper understanding and transparency into the claims data and processing. 
2. A Centralized Database for All Data: For efficient management of warranties, this solution provides a centralized management of all details. This eliminates data redundancy, duplicate claims, fraudulent claims, and much more. There are clear and transparent processes set which enable a secure and central management of all warranty claims. 
3. Management of Repair and Replacement: As this software provides tracking for various claims, it also provides insights into the repair and replacement process for any product. As the claims would be validated, the automated process would verify this against the policies of the warranty and act accordingly. If the product does not meet the manufacturer's policy for repair or replacement, it will automatically decline the need for replacement and vice versa. 
4. Insights, Analytics, and Reporting: As we discussed before a warranty management process is complex and there are various touchpoints for data, it becomes evident for companies to use the data to gain deep insights into the warranty data and process. A warranty management software is designed to provide insights into the trends, failure rates, and much more. This enables the manufacturer to understand the scope of improvement in the product and empowers them to make the products better.
5. Easy Integration: Manufacturers use centralized management software for all business functions and processes and any new software must be integrated with said ERP, CRM, or DMS systems of a manufacturer. Be it automotive, consumer appliance, or any other industry, this integration is critical. This warranty management software can be easily integrated with such software to provide deep insights into the warranty data and streamline the communication between systems. 

What Are the Pros of Warranty Management Software?

As a centralized system for all warranty-related information, this innovative and technological solution brings to the table many attributes that act as a boon to businesses. 

1. Control Over Warranty Process: A brand is as good as its customer service and warranty remains a crucial factor to ensure future growth and strategies. Warranty management software provides full control over this complex and critical process to the companies. With such a solution, they can monitor and better align their brand with the expectations of their customers. 
2. Higher Customization: When managing warranty claims for any product, companies understand that sometimes they would need to customize various workflows and set processes. This system enables such customizations and boasts of features that can streamline the entire process. The warranty policies can also be designed using this software. 
3. Security of Customer Data: As we have mentioned the importance of customer data security for companies, it becomes evident that there is no compromise on this aspect. This in-house solution would ensure that the data is secure and managed centrally with the help of this software. Sensitive data is also kept under locks and this software implements industry best practices to ensure the compliance and security of data. 
4. Better Experience for Customers: When a company manages the warranty directly, customers are better served. The customer queries are responded to faster as there is no requirement for constant to and fro between teams and departments to gather information. With all policies and workflows in a central platform, the customer is always kept at the forefront. Such measures would mean that there would be no customer queries left unanswered or unresolved. 
5. Cost Efficiency: Although some would argue that the initial cost implications for warranty management software would be high, compared to the costs in the longer run, it is optimized. This ensures no additional load on the company especially related to costs. As the processes are automated and can be customized, this software opens up various possibilities to save costs in the long run. 

This software definitely encapsulates various aspects of the entire management process and adds value to the existing systems for companies. 

What Are the Cons of Warranty Management Software?

1. Initial Investment is High: Many businesses do not have a high budget to deploy such solutions which limits the implementation of such software. For these businesses, the initial cost is of equal importance as saving costs in the long run. In such cases, this software doesn’t fulfill the needs of the companies.
2. Support and Maintenance Are Ongoing: In some cases, there are some additional operational costs that a WMS might incur. These costs would include the training cost for the staff, additional updates or newer, faster versions, and additional staff to manage the process. Although this is an automated offering and manages the entire process on its own, it would completely depend upon the manufacturer on how they wish to utilize the software within their organization.

Conclusion: Warranty as a Service or Warranty Management Software?

This is a discussion that would often divide people on various opinions and aspects, the solution would completely depend on the outcomes, budget, and utilization of these services. This differs for various companies for example, an automotive company would have set workflows that would be based on their policies. In such cases, the dealers would need to communicate with manufacturers for all warranty-related information. In the case of consumer goods or sanitaryware companies, this entire process might be different as they would have different products with a different use and shelf life. 

In the first case, outsourcing the warranty process is an attractive solution that brings in various benefits such as minimal management and effective implementation, the warranty management software augments the company's branding and standards. Customer satisfaction plays an important role in both these aspects and businesses need to understand the need for any of these solutions. 

Ultimately, it depends on the budget of a company, how they want to use the data gathered from the process, how the process can be streamlined, and how scalable is the solution they want. Data security is also a major concern which is taken care of in the case of warranty management software. Businesses need to provide careful consideration of these processes so they can implement a warranty management strategy that best suits their needs and futuristic goals.