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What kind of warranty management software do manufacturers need?

In addition to simplifying administrative tasks, warranty management software can help companies improve customer relationships. An expert outlines the technology and best practices needed for a better warranty management process.

For manufacturers, warranty management can come from standalone warranty management modules or from more comprehensive...

software packages that combine warranty management with other modules. Companies also have the option of outsourcing warranty tasks to a variety of third parties.

First, let's look at a few of the available software modules and some accompanying best practices.

Warranty management. Managing warranties is not just an administrative process. Warranties should be constructed based on an understanding of product reliability and the financial implications of product defects and failures. Best practice is to review the overall financial impact of failures and the cost of warranty management to improve products and reduce warranty costs. Many products -- like automobiles, industrial equipment and electronics -- have high-cost warranties. Thus, careful analysis is critical to maintain the profitability of the products and the enterprise.

Warranty software should include the design, management and tracking of claims processes (return, repair, replace or payment) through the expiration of warranties.

Warranty management and contract management. The value of this combination is that companies can maintain awareness of all their commitments. What agreements exist and what might be the operational, financial, legal or reputational impact of those agreements? In addition, as warranties expire, this type of module can send out alerts to suggest new service agreements or products to the customer.

Customer relationship and loyalty with warranty management. The concept here is to engage customers in a longer-term relationship through warranty management. With many warrantied products such as apparel or other consumables, there's a low probability of customers acting upon the guarantees. However, companies want the customers to register the product so they can create an ongoing relationship. These relationships should not act only as a method to sell more products, but also to genuinely engage customers in product and service feedback to enhance future product design.

Warranty management and recalls. Recall management is a headache unto itself. Manufacturers need to know which products customers have bought and whether these products are still warrantied. Warranty administration modules can help, but recall processes from customer notification, managing recall logistics, repair or replacement and return to customers, especially for large volume sales, can be extremely challenging. Companies may turn to third-party service providers to manage their recalls.

Warranties management and field service. Many products are sold, serviced, upgraded, etc. through channels and repair partner networks. Often the partner doing the service was not involved in the initial sales, so the module has to be able to provide capabilities for warranty management, lookup, validation, reporting and so on.

Service lifecycle management or service management suite. A lifecycle management module or suite looks at the product from design through operation and repair through end of life. Thus, it should include all the capabilities for warranty mentioned above. Often, field service modules focus on the repair process and leave warranty and customer administration to other software products. A lifecycle product should meet the entire set of requirements.

As mentioned, there are firms that specialize in managing your warranty programs. Many organizations outsource this function to such firms, since warranty administration is still a somewhat paper-intensive and people-intensive business. A warranty management service should handle staffing as well as all the functions related to customer service both online and in the call center, handling claims, records management, returns management, product tracking and routing, in addition to tracking customer satisfaction and other metrics.

Warranty management departments and firms may also track customer satisfaction and other metrics, but analytics is an area they could stand to improve. Warranty management is complex and requires close scrutiny to ensure business goals are met. Although customers don't like products to break, it is a familiar and often not unexpected event. However, the way customers are treated through the warranty process can make or break a company's reputation and future sales.

Next Steps

How manufacturers can provide better field service

Considering the product as a service trend

As manufacturers ready for the product as a service model?

This was last published in April 2015

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