(Topline Results from SFGSM’s 2014 Field Service Management Benchmark Survey – Part 1)
Each year, Strategies For GrowthSM (SFGSM) conducts a series of Benchmark Surveys among its outreach community of more than 45,000 global services professionals. Total responses for the 2014 Field Service Management Benchmark Survey are 1,104, representing a microcosm of the global services community.
Overall, survey respondents identify the following as the top factors, or challenges, that are currently driving their ability to optimize field service performance:
- 52% Customer demand for improved asset availability
- 47% Need to improve workforce utilization and productivity
- 43% Need to improve service process efficiencies
In order to effectively address these challenges – and strive to attain best practices – respondents then cite the following as the most needed strategic actions to be taken:
- 52% Develop / improve metrics, or KPIs, used to measure field service performance
- 44% Invest in mobile tools to provide field technicians with real-time access to required data and information in the field
- 35% Integrate new technologies into existing field service operations (i.e., iPads, Tablets or other devices, etc.)
The survey results reveal that nearly two-thirds (66%) of respondent organizations currently operate service as an independent profit center (or as a pure, third-party service company), compared with only 31% that operate as cost centers. While there has not been a significant change in these percentages over the past two years or so, this two-thirds ratio validates the fact that profit centers now represent the dominant business model for the services community.
It is noted, however, that the percentage of organizations running service as an independent profit center varies – sometimes significantly – from one industry segment to another. For example, the medical/healthcare segment reflects only 57% running as profit centers, compared to 65% for the Computer/IT Services segment and 77% for industrial/manufacturing – a 20% spread.
US$1 billion-plus organizations come in at 74%, while SMBs (i.e., Small and Medium-sized Businesses) report only 55%. Not surprisingly, organizations reporting total annual services profits of greater than 30% come in at 76% – one of the highest levels among all of the segments covered in the survey. As such, they are not only operating service as a profit center – they’re actually making a significant profit by doing so!
More importantly, the respondent base clearly reflects the predominant mode of Field Service Management (FSM) solutions currently being deployed – that is, typically off-the-shelf, either with some customization (37%), or basically right out-of-the-box (4%), comprising 41% of the respondent base in total.
More than a third of respondents (35%) are either using home-grown, or internally-developed automated systems (23%), or custom solutions developed by a systems integrator (12%). However, the most perplexing statistic may be the fact that nearly one-in-five respondents (18%) are still running their field service organizations basically via a series of manual processes (and spreadsheets).
Despite the means by which field service operations are being managed today, one of the more compelling reasons for why so many organizations are looking for ways to improve or enhance their service delivery performance and, ultimately, their corresponding levels of customer satisfaction and service profitability, is the fact that less than half (43%) are currently attaining as high as a 90% customer satisfaction rating. While more than a quarter (28%) currently find themselves performing in the 70% to 89% satisfaction range (i.e., probably where your organization stands), the best practices organizations typically find themselves at the 95%-plus level – and this is, ultimately, where you want to be!
However, making the improvement from a level of 70% – 80% customer satisfaction to 90% or higher is not simply accomplished through the implementation of new field service software automation technologies; or the deployment of mobile tools, devices and solutions and simply waiting for customers to become more satisfied – there are many additional aspects of service performance that will still need to be improved and/or enhanced in order to have a positive impact on customer satisfaction.
The respondents to the survey have clearly identified the specific drivers that are pushing them to aspire to the attainment of higher levels of performance. For example, customer demand for quicker response time is cited by just over half of the respondent base (i.e., 52%) as the top driver their organization currently focuses on with respect to optimizing field service performance. The need to improve workforce utilization and productivity is next most highly cited by 47% of respondents.
It is noted, however, that these two market drivers have essentially “flip-flopped” over the past two years in terms of characterizing the most important market drivers currently impacting the market’s path toward service delivery optimization. As such, once again, the top market driver is focused on satisfying the customer, rather than strictly on improving internal processes and/or productivity – a reflection back to the more historical perspective of the field service community.
However, there are several other key drivers that also impact between one-third and one-half of the market, including the need to improve workforce utilization and productivity (47%), the need to improve service process efficiencies (43%), customer demand for improved asset availability (35%), and an internal mandate to drive increased service revenues (33%).
As such, the common threads that tie all of these drivers together may be best categorized into three groupings essentially comprising:
- Customer demand for quicker response and improved asset availability;
- Field technician utilization, productivity and efficiency improvement; and
- An internal mandate to drive service revenues – and profits.
The results of the survey reaffirm the relationships between and among these three groupings by linking internal process and productivity improvements directly to improved customer support, ultimately leading to reduced costs, increased revenues, more satisfied customers, and a healthier bottom line.
Another key influencing factor revealed through the analysis of the survey findings is that only two-thirds (67%) of the services organizations surveyed have experienced any improvement in year-to-year field technician productivity in the most recent period. In fact, one-in-12 have actually experienced declines in productivity over this 12-month period – some of which were up to 50%! These levels of year-to-year declines in performance are largely unacceptable in an environment where a majority of FSOs remain on a path toward improved service delivery performance.
We also believe that it is a mistake to dwell only on the “top” factors that are driving the market – and the organization. In fact, there are several other factors that respondents cite as just “bubbling under the surface” with respect to their potential impact on the overall well-being of the organization. These include:
- 32% Competitive pressures / need for market differentiation
- 18% Escalating field service operations costs
- 15% Customer demand for more accurate service call scheduling
- 6% Need to reduce dispatch-related errors
- 5% Need to reduce / eliminate incidence of night / weekend work
Again, while not necessarily representing the top market drivers overall, these factors still resonate with many field services organizations in terms of their impact on the way day-to-day business will need to be transformed in order to meet customer – and market – expectations for meeting service performance and customer satisfaction expectations. Best practices field service organizations typically take all of these factors into consideration when evaluating their service performance and identifying more effective ways by which to satisfy their customers.
Next up (in Part 2) will be a discussion of what many of these FSOs are currently doing – and planning to do – with respect to addressing these key market drivers.