[This companion piece to the Field Service News May, 2017 issue focuses on the impact of the recent spate of events (i.e., mergers/acquisitions, strategic partnerships, new entries to the FSM competitive landscape, etc.) that appears to be transforming the global services industry. As is the case in the magazine’s multi-analysts interviews, most of these responses are not included in the published feature. As such, please consider this Blog as a more detailed companion piece that provides additional “between the lines” thoughts and opinions.]
Q1: Why do you think that Field Service Providers have recently become an attractive target for investment – is this indicative of the growing importance of field service to the wider economy?
The current spate of acquisitions of Field Service Providers is long overdue. In fact, it should have happened years ago! However, the acquiring organisations seemed to have other priorities in mind with respect to broadening and strengthening their existing offerings, and tailoring them to a more narrowing-defined market space.
For example, CRM vendors tended to focus more on expanding the functionality of their respective CRM platforms, while ERP vendors tended to do the same with theirs. Remember, there were days – way back when – when a Field Service Management (FSM) solution provided only the functionality required to run a services operation – but not a services business (i.e., no accounts payable/billable or accounting functionality; no reverse logistics; no human resources; etc.). In those days past, a services business would also need to acquire ancillary software packages (e.g., anyone remember Peachtree Software) in order to manage the entire services business.
However, it’s a bit different today. As more and more software providers expand their offerings to run the entire business, they now market themselves as offering a “new” type of platform for doing so.
In general, it will be those organisations that move into (or buy into) the field services arena – for all the right reasons – that are most likely to be successful. That is, if a field service functionality makes sense as a logical extension of their existing offerings, then they will be more likely to succeed. However, those that attempt to “ram their way” into what is already a fast-growing and vibrant market sector, some without even having a complete FSM offering, will find themselves “busted” in the eyes of their targeted market base.
Q2: The FSM solution space has seen huge innovation in recent years, is there a danger that with so much M&A activity this innovation will plateau, and if so is the technology now available suitable to empower field serve organisations to meet growing consumer demands?
Currently available technology, coupled with newer technology that always seems to be lurking “just around the corner”, is already sufficient to meet (and exceed) all of the FSO’s requirements for managing their field service operations – and then some! It’s already here!
As such, the global services market is not likely to experience a plateau in terms of recognition, adoption and/or deployment of these new technological advances anytime soon. In fact, as the proliferation of technology appears to be eclipsing adoption by the marketplace, there is no plateau in sight. There is still a “mountain of growth” ready to be conquered!
As such, this accelerating growth is likely to bring more FSM provider suitors to the forefront rather than less. For example, three or four years ago, how many field service managers thought that Microsoft would acquire itself into the fray? Many industry analysts missed the signs that Oracle was about to acquire TOA Technologies. However, with several major players already having acquired, licensed and/or organically entered the field services market, the question arises: Who will be next?
On the demand side, where has Apple been? What about SAP? What about any of the large, global, systems integrators? On the supply side, what, if anything, will ultimately happen with ClickSoftware? What about the “tried and true” historical vendors, like Astea? And what about all of those Venture Capital and investment firms that seem to be gobbling up one FSM vendor after another?
The technology is already here! Watch out for the impending approach of more acquiring organisations!
Q3: Finally, the comments from each of these acquisitions almost universally refer to FSM “platforms” and certainly there is a growing trend for Field Service Management tools to be part of a wider service platform solution. Do you think that ultimately we will see FSM become as integral to business systems as ERP and CRM?
The difference between an FSM solution and an FSM platform is that the former is essentially used to run the services operations, while the latter is used to run the entire business. As far as marketing and market positioning go, doesn’t “platform” sound more important than “solution”, anyway?
CRM-based solution providers have long touted their products as full “platforms” that may be used to run an entire business; ERP-based solution providers have essentially marketed their offerings in the same manner. By incorporating an FSM solution into their respective offerings, they can now all claim (and, probably, rightfully so) that their offerings represent a complete (or near-complete) platform upon which future services functionalities can be built – whether strictly in support of field service operations, or any other business activity.
However, it is not necessarily a “slam-dunk” that FSM will become as integral to business systems as ERP and CRM, as not all businesses have field service offerings – while all have (or should have) an ERP and/or ERP capability. Further, as remote and predictive diagnostics, powered by the Internet of Things (IoT) and Augmented Reality (AR), make further footholds in the general services arena, running a field service operation may become more important, while become less cumbersome to run (and, as such, more likely to be outsourced, possibly, to a third party).
For the time being, FSM will likely remain subservient, in most cases, to CRM and ERP – but will only become more important to those FSOs for whom FSM is basically the whole business to them.
[To access the published Field Service News feature, please visit their website at www.fieldservicenews.com.]