Running a Global Services Organization

Globalization is becoming the norm in the services industry. A market once content with relying on a local, regional – or even national – services organization is increasingly becoming even more reliant on a global support infrastructure. Continuing advances in technology and the proliferation of cloud-based Services Lifecycle Management (SLM) solutions have empowered even the smallest of services organizations with new and expanding possibilities to improve their global service and support operations.

For example, as a result of this trend, we have seen a growing customer demand for global service agreements that result in uniformity in the delivery of service to customers all around the world. In many cases, the unique local or regional service and support needs are rapidly disappearing for many customers who no longer wish to deal with local organizations anymore but, instead, are looking for consistency in global service and support performance, as well as (relative) uniformity in pricing across regional territories based on single contract negotiation.

Customer requirements for service and support will never be the same from one country to another, any more than they will be the same from one customer to another. However, one thing remains very clear – the requirements for service are becoming increasingly standardized on a global basis. A growing number of businesses are going global each year in terms of sales, marketing and services capabilities, supported not only by the proliferation of new Internet-based tools and multinational strategic partnering, but also by the increasing demand for global services and support as evidenced by the market as a whole. However, there are many key functions that will need to be consolidated into a global organization.

Another factor supporting the movement toward globalization is the ability to improve internal efficiency. In a typical decentralized organization, many functions are duplicated and performed independent from each other, which leads to increased communication efforts and differing ways of operating. We have seen organizations where product support documentation was developed by at least three different regional organizations, in some cases, providing conflicting information. For these organizations, operating on a more uniform basis would serve to both improve efficiency dramatically and, at the same time, provide a higher level of consistency in the way in which certain activities are performed. Through improved information and communication technology, new opportunities are also being created that allow services organizations to perform certain business functions more efficiently at a global level, while maintaining local control over their individual market segments.

A third factor supporting the case for globalization is the ability to reduce costs while maintaining or improving service level. The greatest area of opportunity involves the logistics operations where local policies have historically resulted in high investments in inventory, especially for slow moving items. Based on what we have seen in the industry, it makes sense to elevate certain of these functions to a global level in an effort to:

  • Meet customer requirements
  • Increase efficiency
  • Improve consistency

The details of each of these functions obviously will vary by company, but the basic functions do exist in virtually all of the companies in the services sector.

There are many functions that may be offered on a global basis

The best way to determine which functions can be offered on a global basis is to evaluate them from both an efficiency and consistency point of view. However, this does not mean that all tasks must be performed at a global level. Dependent on the individual situation, certain tasks may still be outsourced, or executed at the regional level. A good example is training, where the overall structure of the training programs and material should be consistent all around the world, although the courses can be fine-tuned and provided at regional or local training centers to reduce travel cost. Still, there will likely be increasing pressure on services providers to ramp up to their customers’ increasing global needs by offering a full range of global service and support solutions.

Among the principal functions that may be offered on a global basis are:

Business Development

The Service and Support function is critical for all businesses and has to be an integral part of the overall business strategy. For this reason, it is important to be actively involved in the planning activities that result in the development of a Service and Support Business Development Plan that addresses:

  • Service and Support product portfolio
  • Global marketing plans
  • Global Customer Care and Sales

This business function is most critical at the global level because it ties everything together and establishes a framework for setting the goals and objectives for the other parts of the organization.

Product Management

The Product Management function is also critical at the global level. Historically this function has been highly technology-oriented, and tied very closely both to the business’ development and manufacturing environment as well as its regional and local operations. With the implementation of global systems, this function can now be most efficiently managed at the global level. The function includes tasks such as:

  • Lifecycle management
  • Product documentation
  • Product analysis
  • Sustaining engineering

As stated earlier, the information and communications systems presently available allow for a faster and more reliable information flow to be managed at a central point, thereby requiring the need for only minimal additional investments in research and communications tools to support a global operation.

Logistics

The Logistics function probably represents the greatest opportunity from a cost reduction point of view. Historically each segment of the organization was responsible for its own planning and execution, which generally led to the implementation of multiple independent logistics systems requiring additional safety stock and a huge risk for obsolescence. Based on our consulting experiences, and supported by information culled from our ongoing surveys, creating a Global Logistics System, supported by the right automation systems, commonly reduces the inventory requirement by 20% – 30% without jeopardizing customer service levels.

At the same time, the risk for obsolescence is reduced which also creates additional cash for a company on the basis of lower reserves kept in the books. Dependent on the situation, most of the specific operational aspects of the logistics function may be outsourced to logistics service providers, which ultimately changes the focus of this function from one of execution to basically one of managing the function. At a global level, the Logistics function should include, at the very least:

  • Forecasting and inventory planning
  • Procurement
  • Repair management
  • Inventory control
  • Vendor management

The benefits of a global operation are obvious through the elimination of safety stock at all levels, automatic replenishment based on planning and forecasting, alliances with global parts and services vendors, etc.

Training

Training also needs to be consistent on a global basis. However, the development of good training programs and tools requires specific knowledge in addition to product knowledge. For this reason, it is most efficient to develop training programs at a global level, which will allow for specialization where required, and will improve the overall quality of the individual courses and material. This would encompass:

  • Customer training, and train-the-trainer
  • Technical and Partner training
  • Licensing (if services are outsourced to other companies)

Newer developments in training techniques via distance learning and the Internet are just an extra motivation to centralize this function at a global level.

Field Service

The Field Service function should also be managed on a regional or local level. The principal reasons are that labor restrictions and language barriers are still important geo-centric issues. The challenge is to determine what the appropriate service level should be from a management and support perspective (i.e., second/third line support).

In most situations a hybrid model may be developed where first-line support is provided at the local level, while second- and third-line support are concentrated at the regional or global level. Dependent on the specific type of business, the availability of new technology and expanding Internet capabilities may offer opportunities to increase operational efficiency in an environment where the location of the actual support person becomes less important.

Customer Support

The Customer Support function is a front-line function that is very dependent on the regional and local situation. Similar to the field service function, the level of centralization will be dependent on the local situation and culture. It remains important, however, to link all of these functions together via centralized automation systems and rolling out the appropriate communication systems to allow for local optimization.

Regional and local functions must also be carefully integrated


Because of key factors such as cultural differences, language barriers and the importance of a local presence, certain functions may still be best performed on a regional or local level. Although the trend is typically geared more toward the centralization of certain functions at a regional level (e.g., Pan-European, ASEAN) some cultures still require a local presence to do business. The challenge is to determine which front-line functions are absolutely necessary at the local level, and which can be combined at a higher geographic level.

Although some customers will do business on a global basis, the majority of sales will still occur at the local level, dependent on the culture of the region or country. Some markets might even have local requirements that point to a local sales function. However, all local sales functions supporting the business’ service and support products should be in line with the company’s global programs.

How does your organization get there?

Looking at each of these business functions and determining which can more effectively and efficiently performed at a global level is easy – you simply take a step back and apply some common sense, and the conclusion is almost the same for every business. However, in most cases, managers have to deal with an existing organization that has historically grown to where it is now operating on a non-global basis, and the change to a global environment is likely to greatly impact both the organizational structure, and all of the people in the organization.

In addition to these more tangible effects, there will also usually be many underlying issues that have to do with other, harder-to-define issues, such as philosophical and geo-political factors, changing roles and responsibilities, new reporting structures, etc. To address these issues, a careful approach will be necessary, and it might take some time.

The transition from a regionalized to a globally-managed operation is not easy. There will be a great deal of roadblocks that require attention, and the sensitivity of certain solutions will require a well-crafted and thought-out approach. For this reason it is generally helpful to seek assistance and support from an external party to manage the overall effort and ensure the development of the most appropriate global business model.

Best Practices Field Service Organizations (FSOs) Use an Expanded Variety of Tools and Technologies to Directly Support Their Field Techs and Customers

(Drill-down Results from SFGSMs 2014 Field Service Management Benchmark Survey – Part 6)

A three-quarters majority of Best Practices organizations (i.e., 75% or more) currently support their field technicians with a variety of online capabilities, including the ability to track and update the current status of work orders (86%), the ability to initiate service orders (81%), access to customer/asset service history (76%), and access to product schematics/documentation (76%). This generally compares to a two-thirds or greater (i.e., 67% or more) majority among the general population. Ability to provide customers with an Estimated Time of Arrival (ETA) / Estimated Time to Complete (ETC) is additionally cited by a 65% majority of respondents.

Other capabilities currently being provided by a majority of Best Practice organizations to their respective field technicians include:

  • 60% Access to real-time parts inventory / availability
  • 56% Availability of required parts, either in van or en route
  • 56% Access to problem resolution scenarios

Whether it is access to data and information that represents the past (i.e., customer/asset history), the present (i.e., current status of work orders), or the future (i.e., providing customers with an ETA / ETC), the Best Practices organizations already recognize the importance of real-time data and information access.

However, the key to success for most Best Practices organizations is that they are also providing their customers with a comparable set of online tools to make both their – and their field technician’s – lives much easier. By providing customers with the right mix of Web-enabled self-help capabilities, the leading organizations have essentially been able to run their respective services operations more effectively, while also increasing existing levels of satisfaction by allowing customers to become part of their own “support team”.

The primary online capabilities currently provided to customers of Best Practices organizations include:

  • 71% Ability to order parts (up from 65% among the general population)
  • 65% Ability to view current status of work order (up from 59%)
  • 63% Ability to initiate / create service tickets online (up from 59%)
  • 58% Ability to update status of current work order (up from 55%)
  • 46% Ability to track service parts shipping status (up from 45%)

By making the customer part of the service delivery team, Best Practices organizations can continue to benefit from reduced time and cost-related factors – while increasing existing levels of customer satisfaction. Customer access to online service order data and information is clearly a “win-win” scenario for both parties.

However, the greatest impact on the future of Field Service Management is most likely to come as a result of the growing acceptance of Cloud-based technology. The results may be somewhat surprising to some, as they suggest that there is little difference between Best Practices organizations and the general population with respect to their preferences for how they will be acquiring their next (or first) FSM solution and/or upgrade – the vast majority seem to be leaning toward a Cloud-based solution (i.e., by a ratio of nearly 3:1).

Among those Best Practices organizations currently planning an FSM implementation in the next 12 months (or considering doing so in the next 24 months), a Cloud-based solution is preferred by 56% of respondents, compared to only 19% citing a preference for Premise-based. Another one-quarter (25%) remain undecided at this time. The corresponding percentages for the general population are virtually identical at 54% preferring Cloud-based, 20% preferring Premise-based, and 26% undecided – a corresponding ratio of 2.7:1 in favor of Cloud.

In the two years since the previous Field Service Management Benchmark was conducted, this represents a sea-change from a market that historically had gone Premise-based for a majority of its Field Service Management software solution needs. As such, the Cloud now allows some of the smaller FSOs to attain – and maintain – Best Practices status and, in many cases, compete directly against the historical market leaders who had previously been the only ones invited to join this elite group.

Based on the results of SFG’s 2014 Field Service Management Benchmark Survey, the key takeaways for Best Practices FSOs are:

  • Best Practices services organizations are significantly more driven than the general population of Field Services Organizations (FSOs) to meet their respective customer demands for quicker response time and improved asset availability; improved workforce utilization, productivity and efficiencies; and increased service revenues.
  • A majority of Best Practices organizations are adding, expanding and/or refining the metrics, or KPIs, they use to measure service performance; they also use a larger variety of KPIs to measure their performance than do their non-Best Practices counterparts.
  • Over the next 12 months, more than 84% of Best Practices organizations will have integrated new technologies into their existing field service operations, and roughly three-quarters (74%) will have invested in mobile tools to support their field technicians.
  • Best Practices organizations are increasingly providing their Field Technicians with enhanced access to real-time data and information to support them in the field; they are also taking the lead in providing customers with an expanded variety of Web-enabled self-help capabilities (i.e., ability to order parts or initiate service calls, track the status of open calls, etc.).
  • Best Practices organizations are currently attaining the industry’s highest levels of Customer Satisfaction and Service Profitability (i.e., 95% satisfaction, and 49.6% service profitability).
  • Best Practices organizations are no different in their preference for Cloud-based FSM solutions – in fact, they share the same preference for Cloud as the general population of services organizations.

In 2014 and beyond, the proliferation of Cloud-based FSM solutions may serve to further normalize the competitive playing field between Best Practices organizations and all others with respect to their ability to use the same tools to reach out to, and serve, their customers. However, the larger enterprises that have already mastered attaining Best Practices status are likely to still maintain a marketing and competitive advantage based at least on their getting there first, and having already dealt with most of the other issues that have historically impeded the ability of smaller organizations to rise to the top.