At a glance

  • Manufacturers and dealers count on parts and service for margin; BCG puts services at about twice the margin of new equipment.
  • Few record each unit as a serviceable asset on the day it ships, with its configuration, its site, and its warranty.
  • Without that record, the parts order and the service contract go to whoever reaches the customer first.
  • Leaders who fix it let the sales order create the installed base, then run parts and service from it.

The aftermarket starts the day a unit ships, well before a customer calls with a problem. On that day the unit either becomes a record your service team can find, or it disappears into a customer’s plant.

The first case pays for years in parts, service, and contract renewals. The second leaves that revenue to whoever the customer calls first.

The margin is in the aftermarket, and it depends on a record

Services carry about twice the gross margin of new equipment, according to a February 2025 BCG study of industrial manufacturers. New equipment typically earns 15 to 25 percent. Spare parts and consumables run about 50 percent.

The companies that prioritize services earn a third or more of their revenue from them, BCG found. Only 4 percent have succeeded with recurring digital-service revenue, so the money is still in parts and service contracts.

Those numbers assume you know what you sold. Parts capture, the share of your units’ parts demand you actually win, depends on knowing which units are in the field, where they are, and how each one was configured.

Most installed bases are rebuilt from memory, one call at a time

The common pattern is familiar. The unit ships from the ERP, service runs in its own tool, and the service team first meets the unit when the customer calls. A coordinator types in the serial number and hopes the configuration on file matches the machine.

That installed base is assembled after the fact, from the customers who call. The customers who buy the part somewhere else never appear. Contract renewals slip because nobody sees that the warranty is about to end.

The unit is sold in one system and serviced in another, and nothing carries the record across.

Let the sales order create the asset

The fix is a design decision made before launch, and we call it the day-one record. When a unit ships, the order creates a customer asset in Dynamics 365 Field Service. It carries the serial number, the configuration as built, the site it went to, and the warranty start date.

Installations, planned maintenance, and repairs then run against that asset. Parts come from the same inventory sales promises from. A service warehouse or a technician’s van is a warehouse in Supply Chain Management, and a part used on a work order is consumed and billed once.

Finance sees margin by service contract as well as by product. In September 2026 Microsoft made connected Field Service, Project Operations, and Finance workflows generally available, so a finished job reaches the invoice without being keyed twice. We connected the field to finance the same way for a Southeast fueling-infrastructure services company with more than 500 technicians.

With the tools shared, your record is the service advantage

Diagnostic tools are becoming a shared resource. On July 8, 2026, the FTC and five states settled with Deere. Under the 10-year agreement, owners and independent shops get the same diagnostic and repair tools Deere’s dealers get.

In Europe, the EU Data Act has given users of connected products access to their machine data since September 12, 2025.

When tools reach parity, the independent shop still lacks one thing: your record. It doesn’t know the as-built configuration, the warranty terms, the service history, or which part is on your shelf. Those stay yours only if you captured them.

Dealers measure the stakes as absorption, the share of dealership overhead covered by parts and service gross profit. The North American Equipment Dealers Association’s guideline is 80 percent or higher. The installed base is the population that absorption lives on.

Agents can work the installed base once it exists

With the record in place, agents take the follow-up between people. Buyers can let the Procurement Agent, in paid public preview, chase supplier confirmations and late deliveries for service parts, then decide what to expedite.

Service managers can review schedules drafted by the Field Service Scheduling Operations Agent. It is still in preview and not for production use, so don’t design a rollout around it yet. Neither agent helps if nobody knows which unit is where.

Where the sales order can’t carry the whole record

This approach has limits. When you sell through distributors or dealers, the ship-to address is the dealer, not the end customer. There the record depends on warranty registration or a data-sharing agreement with the channel, so the design starts with that agreement.

Units sold years ago need a different start. Rebuild what you can from service history and warranty claims, and accept that it will be partial. Begin the clean record with the next unit you ship.

Equipment dealers have one more limit. Dynamics 365 is not a dealer management system on its own. Serialized whole goods, OEM parts price files, and OEM warranty formats need the OEM’s template or a dealer ISV.

What aftermarket leaders should do next

Decide where the installed base is born. Make the sales order or the shipment create the asset, with the serial number, the configuration, and the warranty date.

Put service parts in the same inventory as finished goods. Service should draw from the stock sales promises from, and each part should be billed once.

Measure parts capture as well as parts revenue. Revenue can grow while your share of your own units’ demand shrinks.

Start with the next unit you ship. Don’t wait to clean up twenty years of history before you record the first unit correctly.

Give people the record before you give them agents. An agent that can’t find the unit can’t sell the part.

How we know this

This point of view comes from Ludia’s Dynamics 365 delivery for manufacturers and service businesses. Product status is as of Sept 29, 2026; Microsoft now ships changes continuously, so we re-check before every plan.

  1. Services margin, parts margin, and services share of revenue: Boston Consulting Group, Aftermarket Services Drive Growth and Higher Margins for Industrial Manufacturers (Feb 18, 2025).
  2. Right-to-repair settlement: Federal Trade Commission, FTC, States Secure Settlement with Deere & Company (July 2026).
  3. Machine data access: European Commission, Data Act (applies from Sept 12, 2025).
  4. Absorption guideline: Farm Equipment, Increasing Absorption Rate and Attracting Repeat Business (Oct 6, 2025).
  5. Connected Field Service, Project Operations, and Finance workflows: Microsoft, Build the future of agentic ERP with new Microsoft Dynamics 365 capabilities (Sept 23, 2026).
  6. Procurement Agent status: Microsoft Learn, Supplier communications features of the Procurement Agent.
  7. Scheduling Operations Agent status: Microsoft Learn, Dynamics 365 Field Service planned features (updated Sept 3, 2026).
  8. Field-to-finance delivery for a fueling-infrastructure services company: Ludia client results.