Best Practices Field Service Organizations (FSOs) Use Targeted KPIs to Measure Their Industry-Leading Service Delivery Performance

(Drill-down Results from SFGSMs 2014 Field Service Management Benchmark Survey – Part 5)

Perhaps one of the greatest differences between Best Practices organizations and the general population is that the former place significantly more emphasis on the development of, and in most cases, the continuous improvement of, the KPIs and metrics they use to measure, monitor and track their field service performance over time. Presently, 61% of Best Practices organizations cite the development and/or improvement of the KPIs they use to measure field service performance as the number one strategic action currently being taken (as well as planned over the next 12 months). This compares with only 52% among the general population.

The top Strategic Actions currently being undertaken by Best Practices Field Service Organizations are:

  • 61% Develop/Improve Metrics, or KPIs to measure FS Performance
  • 42% Invest in Mobile Tools to support Field Technicians
  • 35% Integrate New Technologies into existing FS Operations
  • 30% Automate existing Manual FS processes and activities
  • 28% Provide additional Training to FS Technicians and Dispatchers
  • 24% Provide Enterprise-wide Access to important Field-collected data
  • 21% Increase Customer Involvement in Web-based Service Process
  • 20% Improve Planning & Forecasting with respect to Field Operations
  • 13% Hire additional Field Service Technicians and/or Dispatchers
  • 11% Outsource some, or all, Field Service activities to partners or vendors

Further, while current and planned investments in new technologies and mobile tools are cited fairly equally between the two categories of respondents, there are other key differences that give the Best Practices organizations an advantage over time. These include:

  • 30% of Best Practices organizations are currently taking steps to automate existing manual field service processes and activities, compared to only 26% for the general population); and
  • 21% of Best Practices organizations are currently increasing customer involvement in Web-based service processes, compared to only 18% for the general population).

While these relatively small differences may not look like much of a differential between the two groups, they do make a difference in the ongoing ability of Best Practices organizations to meet their customer’s expectations – and continually raising the bar – simply by doing so!

Planned strategic actions over the next 12-month period reflect an even more dynamic, rather than static, approach to the field services marketplace. For example, almost half (i.e., 49%) of Best Practices respondents plan to integrate new technologies, and another 43% plan to develop and/or improve their use of field service KPIs, or metrics, in the next 12 months.

Still another 35% plan to improve their planning and forecasting activities, and almost as many (i.e., 32%) plan to invest in the next generation of mobile tools to support their technicians in the field. Other key planned actions will be taken in areas relating to providing additional training for field technicians and dispatchers (28%), automating existing manual field service processes or activities (26%), increasing customer involvement in the service process via We-enabled self-help (i.e., call initiation, scheduling, visibility into call status, etc.) (25%), and providing enterprise-wide access to important field-collected data (22%).

What these data primarily show is that the Best Practices organizations recognize the need to take specific strategic actions to enhance and improve existing service operations, and that these actions begin first and foremost with the need to develop and/or improve the use of service metrics and KPIs for measuring and monitoring their overall service delivery performance. It also shows that FSOs recognize the need to invest in the right technologies and mobile tools to empower their resources both in the field, and in the back office, to improve existing processes, meet the evolving and growing needs of customers, and make greater contributions to the bottom line.

The survey findings also reveal that there are as many as 14 individual service performance metrics, or KPIs, presently being used by a majority (i.e., 50% or more) of the Best Practices organizations that participated in the 2014 Field Service Management Benchmark Survey (compared to only 5 among the general population). They include:

  • 90% Customer Satisfaction (up from 80% among the general population)
  • 78% Total Service Revenue (up from 72%)
  • 75% Total Service Cost (up from 69%)
  • 68% Service Revenue, as a Percent of Total Revenue (up from 52%)
  • 58% Mean-Time-to-Repair (MTTR) (up from 46%)
  • 57% On-site Response Time (up from 49%)
  • 54% Percent of Total Revenue Under SLA/Contract (up from 45%)
  • 53% Service Level Agreement (SLA) Compliance (up from 45%)
  • 53% Service Contract Renewal Rate (up from 42%)
  • 51% Field Technician Utilization (down from 59%)
  • 51% First Time Fix Rate (up from 47%)
  • 50% Service Parts Revenue, as a Percent of Total Service Revenue (up from 43%)
  • 50% Customer Retention (up from 43%)
  • 44% Field Technician Productivity (down from 48%)

As such, it appears that Best Practices organizations already have taken steps to keep field technician utilization and productivity in check, and – as a result – are using a multitude of other KPIs to measure, monitor and track their respective performance.

Next up (in Part 6) will be a discussion of which tools and technologies Best Practices FSOs are using to directly support their field techs and customers.

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What Best Practices Field Service Organizations (FSOs) Are Doing to Differentiate Themselves from the Rest of the Pack

(Drill-down Results from SFGSMs 2014 Field Service Management Benchmark Survey – Part 4)

Overall, survey respondents meeting the requirements for Best Practices status (i.e., attaining both 90% or greater Customer Satisfaction, and 30% or greater Services Profitability) identify the following as the top factors, or challenges, that currently drive their desire to optimize field service performance:

  • 50% Customer demand for quicker response time
  • 43% Need to improve workforce utilization and productivity
  • 40% Internal mandate to drive increased service revenues
  • 40% Need to improve service process efficiencies

The data clearly reflect that those Field Service Organizations (FSOs) which have already attained Best Practices status appear to place somewhat more emphasis on key market drivers such as customer demand for quicker response time, and internal mandate to drive increased service revenues than their non-Best Practices counterparts. Therefore, it should come as no surprise that they are also attaining the highest levels of Customer Satisfaction and Service Profitability among the overall survey universe.

However, in order to effectively address these key challenges – and strive to maintain their Best Practices status – respondents then cite the following as the top strategic actions they are currently taking:

  • 61% Develop / improve metrics, or KPIs, used to measure field service performance
  • 42% 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.)

While the survey results reveal fairly similar patterns reflecting the integration of new technologies and investment in mobile tools to support the field force, the big difference is reflected in the percent of Best Practices services organizations that are currently developing and/or improving the Key Performance Indicators (KPIs) they will be using to measure their respective performance; i.e., cited as a top strategic action by 61% of Best Practices respondents, compared to only 52% for non-Best Practices respondents.

The remainder of this white paper provides additional insight into each of these and other related areas that may be influencing your organization’s drive to attain Best Practices, as well as highlighting those resources that the leading organizations currently have in place – or are planning to implement – that have already taken them to Best Practices status.

The survey results reveal that 81% of Best Practices respondent organizations currently operate service as an independent profit center (or as a pure, third-party service company), compared with only 66% among non-Best Practices organizations. Even so, there are just under one-in-five (18%) that still operate as cost centers – even though they are attaining high levels of customer satisfaction and overall services profitability. Nonetheless, there are only roughly half as many Best Practices organizations that are still running service as a cost center, compared to all others.

While there has not been a significant change in these percentages from similar surveys conducted over the past two years or so, this 4:1 ratio strongly validates the fact that profit centers now represent the dominant business model within the Best Practices services community.

It is noted, however, that the percentage of organizations running service as an independent profit center varies – sometimes significantly – by size of organization (i.e., based on annual revenue or turnover). The overall survey findings indicate that 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 service 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!

The Best Practices respondent base also clearly confirms that the predominant mode of Field Service Management (FSM) solutions currently being deployed is mainly off-the-shelf, either with some customization (40%), or basically right out-of-the-box with no customization (6%), comprising nearly one-half (46%) of the respondent base in total. This figure is just over 10% higher than that cited by non-Best Practices organizations.

More than a third of respondents (34%) are either using home-grown, or internally-developed automated systems (15%), or custom solutions developed by a systems integrator (19%). While this overall percentage appears similar to that cited by the general services community, Best Practices organizations are far more likely to deploy a custom solution by a systems integrator (i.e., 19%, vs. only 12% for non-Best Practices), but far less likely to develop their FSM solution internally (i.e., 15%, vs. 23% for non-Best Practices organizations).

However, the most perplexing statistic may be the fact that nearly one-in-five Best Practices organizations (18%) are still running their field service operations basically via a series of manual processes (and spreadsheets) – the same percentage attributable to the total respondent base!

The key drivers that most influence Best Practices organizations to improve the overall performance of their field service operations are similar to those cited by the general population, although, in a slightly different order – i.e., one that places somewhat more emphasis on the customer. For example, both sets of survey respondents cite customer demand for quicker response time and the need to improve workforce utilization and productivity as their top two market drivers.

However, while the general population focuses more on the need to improve service process efficiencies, the Best Practices organizations, having already done some work to improve this area, are able to turn their focus back to the customer, primarily with respect to meeting their demands for improved asset reliability – while, at the same time, also meeting internal management’s mandate to drive increased service revenues. Thus, for most Best Practices organizations, the need to improve internal service processes comes after these more immediate challenges that focus, first, on the customer; second, on productivity; and third, on driving service revenues – all key components that ultimately contribute directly to the bottom line.

While these market drivers may differ somewhat in intensity in each of the two surveyed populations, it is clear that the main focus remains squarely on the customer – particularly among the Best Practices organizations. They have already recognized that they could not initially attain – nor maintain – their elite status in the services community without having focused first on their customer’s needs and requirements; and, next, on improving the internal services operations necessary to meet their expectations.

As such, the common threads that tie all of these drivers together among Best Practices organizations 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.

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 Best Practices organizations. These include:

  • 38% Competitive pressures / need for market differentiation
  • 21% Escalating field service operations costs
  • 13% Customer demand for more accurate service call scheduling
  •   6% Need to reduce / eliminate incidence of night / weekend work

It is noted, however, that while 6% (i.e., 1-in-sixteen) respondents in the general population cite the need to reduce dispatch-related problems, this factor apparently is not an issue among the Best Practices organizations.

Another key influencing factor revealed through the analysis of the survey findings is that 71% of the Best Practices services organizations surveyed have experienced some improvement in year-over-year field technician productivity (i.e., measured in terms of average calls completed per day), compared to 67% among the general population). However, more than half (i.e., 52%) have also experienced improvements in service revenue, per field technician during the same period. An even greater percentage (i.e., 61%) have also experienced improvements in their year-over-year service profitability.

In fact, these year-over-year increases have led the Best Practices organizations in attaining a mean average of 49.6% service profitability in the most recent reporting period, compared to only 38% among the general population. Further, at a mean average of 95%, Best Practices organizations currently enjoy customer satisfaction levels that are substantially higher than those attained by the general population (i.e., only 85%).

Each of these lofty levels of performance assure that most Best Practices organizations will likely retain their standing in the overall services community: first, through sheer momentum; and finally, by the fact that they already have, in most cases, addressed – and taken steps to improve – each of these key areas of performance, typically leaving them more able to focus on what originally took them to the top – the customer (and the bottom line).

Next up (in Part 5) will be a discussion of which KPIs Best Practices FSOs are using to measure their industry-leading service delivery performance.