PollockOnService Predictions for Field Service in 2020 – and Beyond!

[Reprinted from the March, 2020 issue of Field Service News.]

[To All Field Services Professionals, I would like to extend you an invitation to download a complimentary Webcast on the topic of COVID-19 – How to React, Recover and Restore”. The Webcast is hosted by FieldAware, the leading cloud-based service management software that runs on any device – desktop or mobile – to accelerate business results, and features mealong with a panel of industry experts. Simply click on the following link to access the archived Webcast (and please feel free to forward this invitation to any of your business colleagues): https://bit.ly/covid19fieldawarewebinarondemand]

There has been a growing shift away from manufacturing toward the Servitisation model for decades already. However, while the manufacturing model is a well-entrenched, deeply-rooted model that everybody understands; the Servitisation model is still not anywhere near being as widely understood – even within the services sector.

The transition from break/fix, to network services, to self-help, to remote diagnostics/support has been steady, and has followed a logical evolution over the years. However, the move toward Servitisation requires more of a “leap of faith” as well as a whole new mode of operating (and pricing) for which many services managers are still not familiar – or comfortable.

This trend has carried on for decades – and the services sector is just about ready to “rock and roll” with it moving forward; however, even some of the key (and more savvy) players are not yet 100% certain that they have it right with respect to re-engineering their overall service delivery structure; services support organisation; KPIs and metrics; services support policies, procedures and processes; pricing, accountability – and the list goes on. As such, this trend will positively carry on throughout 2020 – and well beyond – as each major group of services organisations (i.e., leaders, followers, “wait-and-see’ers”, skeptics, and all others) begin their respective transitions.

The evolutionary prospects for Servitisation are quite simple: the market, as a whole, will need to see some prime examples of success in their respective vertical and/or horizontal services segments before making the plunge. They’ll need to move beyond all of the “failure” and pratfall stories before feeling more confident. They’ll need to hear some success stories – and, in their own segment. Bank/financial organisations will need to see how others in their field have succeeded, and what the positive results have been. The same will go for the medical/healthcare segment, manufacturing/industrial segment, and so on.

Most organisations will also need help with how to price “power by the hour”, “airplanes in the air”, and other “new” ways for pricing their services. I suspect there will be an uptick in the number of case studies, Webcasts and conference sessions focusing on these and other related areas. Servitisation is – and will continue to be – a big deal for years to come.

Organisations are also transitioning from providing corrective maintenance to predictive maintenance, and this trend continues to shape the industry moving forward. Corrective maintenance has worked for many years because, basically, that’s all the industry had to offer. From the break/fix, call the manufacturer’s hotline, days; through the current remote diagnostics and repair days, there has been a common thread running through our industry: Some piece of equipment fails, a call is made (i.e., either by phone, in the past; or, today, remotely from the equipment itself) and a corrective action is taken.

However, these are examples of the soon-to-be-bygone OTR (i.e., On-Time-Response), MTBF (i.e., Mean-Time-Between-Failure), MTTR (i.e., Mean-Time-To-Repair), FTFR (i.e., First-Time-Fix-Rate) and PM (i.e., Preventive Maintenance) days. Through Predictive Diagnostics and Predictive Maintenance the need for any On-Time Response will be highly diminished, as will the need for MTBF, MTTR and FTFR KPIs/metrics, etc. Over the coming years, there will be the need for “new” metrics, such as MTBPF (i.e., Mean-Time-Between-Prevented-Failures); MTTR will be measured in minutes or seconds, rather than in hours or days; FTFRs will be normalised as everything will get fixed in a single attempt, whether it requires a single “try”, or multiple “tries”; and PMs will virtually disappear (or at least be replaced by another PM = Predictive Maintenance).

There will be a whole “new” way of delivering service, as well as measuring the success of the organisation through an entirely “new” set of KPIs, or metrics. [By the way – I have already written many times about the need for “new” KPIs/metrics and, respectfully claim the rights to MTBPF!]

Customers no longer will be pleased simply with equipment that is working, sensors that are communicating, and devices that are operating – they are now beginning to look more closely at how their systems, equipment, sensors and devices are working together, in their behalf to get the job done. A services organisation that merely keeps individual systems or equipment up and running (i.e., maintaining high levels of uptime), but does not ensure that they are all working together to effectively and efficiently execute the company’s business, will ultimately find themselves being replaced by other services organisations that do. The clear winners will be those organisations that “get” Servitisation, and not those that do not.

Again, what will move the needle in 2020, is clearly communicating to the marketplace what failures to avoid (and how to avoid them), and what successes can be had (and how to achieve them). There will need to be an industry-wide educational “push” as to what Servitisation really is, what it can do for the organisation (and what will happen if they don’t embrace it), what the ultimate value propositions are for transitioning to this “new” model, and what some of the best success stories have been.

Further, most services organisations are not currently using their respective Field Service Management (FSM) solutions to their full capabilities. The most successful organisations may come close, but there are few that eke out all of the capabilities that may otherwise be offered to them. Some may augment their FSM solution with a home-grown Excel spreadsheet “patch”; others may be using their Sales & Marketing Management (SMM) or Customer Relationship Management (CRM) solutions for activities that their FSM could (or should) be able to support; and still others may not even be aware of the full spectrum of capabilities they may have right at their fingertips. Again, it becomes an educational process that should be driven by the FSM solution providers themselves through the offering of strengthened professional services, such as customer portals, training, train-the-trainers, etc.

As some FSM solution providers may be focusing more on developing Augmented Reality (AR), Merged Reality (MR), Artificial Intelligence (AI) or Machine Learning (ML) based applications to bolster their offerings, they may be relatively deficient in focusing on the basic, or “core”, components of their solutions and, thereby, miss the opportunity to help their customers/users get the most out of their offerings.

Services organisations will also be relying much more heavily on apps and mobile devices in support of their service delivery performance in 2020. Society, as a whole, is relying more and more on apps and mobile devices for communications; and, in many cases, the services sector is leading the way.

Most FSM solution providers are providing their customers/users with more apps and customer portals to facilitate their use of the solution, as well as for communications with their remote support providers. Every year, a higher percent of business is being conducted remotely, and the need for more functional mobile communications is increasing commensurately. The IoT stands for the Internet of Things; and in this regard, humans may also be considered as one category of “things” that the IoT helps to connect. 2020 will see the proliferation of all types of “things” connected to one another through the IoT: systems, equipment, devices – and people. In fact, the numbers of connected things will likely to continue to grow at an accelerated rate in 2020 – and beyond. The more connectivity there is, the better the delivery of service can be.

Companies will also continue to expand their use of AI-powered field service technology and tools. Basically, companies that are already using AI technology in support of their services operations are much more likely to expand its use over time – and, probably, very quickly. However, companies that do not yet employ the use of AI in their services operations typically lie on either side of the fence: either, “we need to do it now”, or “let’s wait and see how this all works out.” The pressure to embed AI in their services operations will be so intense, however, that there is likely to be a surge in usage throughout 2020 and successive years.

Primary uses of AI include the powering of a chatbot capability; the ability to identify key target markets for selling/upselling/cross-selling products and services; and the ability to make their overall services operations work much more productively and efficiently.

Just as Virtual Reality (VR) has made watching American football games (and European football games, as well) easier for the layman (or woman) to understand, it is also making it much easier for field technicians to repair equipment in the field. No more bulky documents or manuals are required, and training programs can be short-cut (to a certain degree) as AR and VR, merged together into MR, can lead the technician to a “perfect” fix, first time, and every time.

The move toward AR and VR is beginning to grow even faster as more installations have been deployed, and more success stories are making the rounds (at trade shows and Webinars, etc.). In fact, the merging of AR and VR has sent out a signal to the “Wait and see’ers” that they may be missing the boat on AR as it is already merging with VR – all while many of their competitors are beginning to implement AI and Machine Learning platforms in support of their services operations. The time to move is now – before it’s too late in terms of having your competitors ending up being better equipped to support (and market to) their targeted customer base.

With the rise of IoT-connected devices and smart homes, many new challenges lie ahead for the field service industry. The rise of IoT-connected devices and smart homes provides a major value proposition to customers, as well as to the FSM solution providers. However, what also comes along with the benefits are a number of potentially serious consequences.

For example, once virtually everything is connected, smart systems will likely become more susceptible to power outages, hacking and various types of breaches in security. The analogy is: before watches, people used sundials to tell time. Then watches could help them tell time – until they either wound down, or the batteries went dead. Today, if the global satellite network goes down (e.g., as a result of space debris, solar flares, etc.), many things we all take for granted will stop working, including a partial/temporary halt to our ability to tell time, make change, or communicate to one another via our mobile devices.

As an example, as I have been writing this article for Field Service News, I have used a pink post-it note to cover the camera on my iMac. At the same time, Alexa is probably listening to anything I say without me even thinking about it. Further, somewhere across the globe, there is probably someone standing outside the front window of a home and yelling at Alexa, Googol or Siri to “remind me what my password is for the front door security code.” What the “expert” hackers can do to outsmart smart homes or businesses will only get more invasive – and potentially dangerous – over time (i.e., the invasions of privacy tend to happen first, with the “patch” or “fix” coming later). As such, the need to provide continual connectivity PLUS protect the privacy of the customer/user will be paramount as more and more smart implementations go into play.

Making projections for 2020 in the services industry is relatively easy. Basically, everything you have gotten used to is going to change!

  • The “good guys” will make everything better; and the “bad guys” will try to make everything worse
  • Every time you make a mistake, the whole world will find out about it virtually instantly
  • Service fixes will be completed faster – but you won’t always be aware that there was a fix
  • Service pricing may or may not be more expensive – but it will certainly be different
  • New start-ups will enter the market; but some old standbys will be forced to depart
  • Most of the KPIs/metrics you’ve used for decades will be replaced
  • The most successful services organisations will follow the lead of technology – not the competition
  • You think that today’s Merged Reality applications are too futuristic or too soon? Wait ‘til tomorrow, when everything is merged (i.e., connected)

[To listen to an archived copy of Bill Pollock’s companion Podcast, conducted by Field Service News in January, 2020, please click here: Podcast.]

Bill Pollock’s Responses to Field Service Digital’s Predictions for Field Service 2020

[Note: If you’ve just completed taking SFG℠‘s 2020 Remote Expertise Benchmark Survey and would like to download a complimentary copy of our 2019 Servitization Journey Benchmark Survey results, please click here: Servitization Journey.]

The remainder of this Blog represents the companion piece to Field Service Digital‘s “Ringing in 2020” predictions, as published in the December 20, 2019 edition of its digital magazine. However, this Blog contains the full text of my responses to FSD‘s eight questions. Please feel free to visit the FSD Website to view my edited responses, along with those of four other services industry experts, at: FSD – Ringing in 2020.]

Q1. There’s been a shift away from manufacturing toward the Servitization model—will this trend carry on into the next year? How will it evolve?

Pollock: Quite frankly, there’s been a shift away from manufacturing toward the Servitization model for decades already. However, while the manufacturing model is a well-entrenched, deeply-rooted model that everybody understands; the Servitization model is still not anywhere near being as widely understood – even within the services sector.

The transition from break/fix, to network services, to self-help, to remote diagnostics/support has been steady, and has followed a logical evolution over the years. However, the move toward Servitization requires more of a “leap of faith” as well as and a whole new mode of operating (and pricing) for which many services managers are still not familiar – or comfortable.

This trend has carried on for decades – and the services sector is just about ready to “rock and roll” with it moving forward; however, even some of the key (and more savvy) players are not yet 100% certain that they have it right with respect to re-engineering their overall service delivery structure; services support organization; KPIs and metrics; services support policies, procedures and processes; pricing, accountability – and the list goes on. As such, this trend will positively carry on throughout the next year – and well beyond – as each major group of services organizations (i.e., leaders, followers, “wait-and-see’ers”, skeptics, and all others) begin their respective transitions.

The evolutionary prospects for Servitization are quite simple: the market, as a whole, will need to see some prime examples of success in their respective vertical and/or horizontal services segments before making the plunge. They’ll need to move beyond all of the “failure” and pratfall stories before feeling more confident. They’ll need to hear some success stories – and, in their own segment. Bank/financial organizations will need to see how others in their field have succeeded, and what the positive results have been. The same will go for the medical/healthcare segment, manufacturing/industrial segment, and so on.

Most organizations will also need help with how to price “power by the hour”, “airplanes in the air” and other “new” ways for pricing their services. I suspect there will be an uptick in the number of case studies, Webcasts and conference sessions focusing on these and other related areas. Servitization is – and will continue to be – a big deal for years to come.

Q2. Organizations are transitioning from providing corrective maintenance to predictive maintenance—how will this continue to shape the industry moving forward?

Pollock: Corrective maintenance has worked for many years because, basically, that’s all the industry had to offer. From the break/fix, call the manufacturer’s hotline, days; through the current remote diagnostics and repair days, there has been a common thread running through our industry: Some piece of equipment fails, a call is made (i.e., either by phone, in the past; or, today, remotely from the equipment itself) and a corrective action is taken.

However, these are examples of the soon-to-be -bygone OTR (i.e., On-Time-Response), MTBF (i.e., Mean-Time-Between-Failure), MTTR (i.e., Mean-Time-To-Repair), FTFR (i.e., First-Time-Fix-Rate) and PM (i.e., Preventive Maintenance) days. Through Predictive Diagnostics and Predictive Maintenance the need for any On-Time Response will be highly diminished, as will the need for MTBF, MTTR and FTFR KPIs/metrics, etc. Over the coming years, there will be the need for “new” metrics, such as MTBPF (i.e., Mean-Time-Between-Prevented-Failures); MTTR will be measured in minutes or seconds, rather than in hours or days; FTFRs will be normalized as everything will get fixed in a single attempt, whether it requires a single “try”, or multiple “tries”; and PMs will virtually disappear (or at least be replaced by another PM = Predictive Maintenance).

There will be a whole “new” way of delivering service, as well as measuring the success of the organization through an entirely “new” set of KPIs, or metrics. [By the way – I have already written many times about the need for “new” KPIs/metrics and, respectfully claim the rights to MTBPF!]

Q3. Customer expectations for uptime have grown—how have service providers responded? What more can they do? What will move the needle in 2020?

Pollock: Customers no longer will be pleased simply with equipment that is working, sensors that are communicating, and devices that are operating – they are now beginning to look more closely at how their systems, equipment, sensors and devices are working together, in their behalf to get the job done. A services organization that merely keeps individual systems or equipment up and running (i.e., maintaining high levels of uptime), but does not ensure that they are all working together to effectively and efficiently execute the company’s business, will ultimately find themselves being replaced by other services organizations that do. The clear winners will be those organizations that “get” Servitization, and not those that do not.

Again, what will move the needle in 2020, is clearly communicating to the marketplace what failures to avoid (and how to avoid them), and what successes can be had (and how to achieve them). There will need to be an industry-wide educational “push” as to what Servitization really is, what it can do for the organization (and what will happen if they don’t embrace it), what the ultimate value propositions are for transitioning to this “new” model, and what some of the best success stories have been.

Q4. Field service automation software continues to mature, but are companies leveraging the full potential of existing capabilities? What’s standing in  their way?

Pollock: Most services organizations are not currently using their respective Field Service Management (FSM) solutions to their full capabilities. The most successful organizations may come close, but there are few that eke out all of the capabilities that may otherwise be offered to them. Some may augment their FSM solution with a home-grown Excel spreadsheet “patch”; others may be using their Sales & Marketing Management (SMM) or Customer Relationship Management (CRM) solutions for activities that their FSM could (or should) be able to support; and still others may not even be aware of the full spectrum of capabilities they may have right at their fingertips. Again, it becomes an educational process that should be driven by the FSM solution providers themselves through the offering of strengthened professional services, such as customer portals, training, train-the-trainers, etc.

As some FSM solution providers may be focusing more on developing Augmented Reality (AR), Merged Reality (MR), Artificial Intelligence (AI) or Machine Learning (ML) based applications to bolster their offerings, they may be relatively deficient in focusing on the basic, or “core”, components of their solutions and, thereby, miss the opportunity to help their customers/users get the most out of their offerings.

Q5. How much more heavily are organizations relying on apps and mobile devices for service? How will this change in 2020?

Pollock: Society, as a whole, is relying more and more on apps and mobile devices for communications and, in many cases, the services sector is leading the way. Most FSM solution providers are providing their customers/users with more apps and customer portals to facilitate their use of the solution, as well as for communications with their remote support providers. Every year, a higher percent of business is being conducted remotely, and the need for more functional mobile communications is increasing commensurately. The IoT stands for the Internet of Things; and in this regard, humans may also be considered as one category of “things” that the IoT helps to connect. 2020 will see the proliferation of all types of “things” connected to one another through the IoT: systems, equipment, devices – and people. In fact, the numbers of connected things will likely to continue to grow at an accelerated rate in 2020 – and beyond. The more connectivity there is, the better the delivery of service can be.

Q6. How will companies continue to expand their use of AI-powered field service technology?

Pollock: Basically, companies that are already using AI technology in support of their services operations are much more likely to expand its use over time – and, probably, very quickly. However, companies that do not yet employ the use of AI in their services operations typically lie on either side of the fence: either, “we need to do it now”, or “let’s wait and see how this all works out.” The pressure to embed AI in their services operations will be so intense, however, that there is likely to be a surge in usage throughout 2020 and successive years.

Primary uses of AI include the powering of a chatbot capability; the ability to identify key target markets for selling/upselling/cross-selling products and services; and the ability to make their overall services operations work much more productively and efficiently.

Q7. How will AR and VR technologies continue to empower service techs? How rapidly are these implementations happening?

Pollock: Just as Virtual Reality (VR) has made watching American football games easier for the layman (or woman) to understand, it is also making it much easier for field technicians to repair equipment in the field. No more bulky documents or manuals are required, and training programs can be short-cut (to a certain degree) as AR and VR, merged together into MR, can lead the technician to a “perfect” fix, first time, and every time.

The move toward AR and VR is beginning to grow even faster as more installations have been deployed, and more success stories are making the rounds (at trade shows and Webinars, etc.). In fact, the merging of AR and VR has sent out a signal to the “Wait and see’ers” that they may be missing the boat on AR as it is already merging with VR – all while many of their competitors are beginning to implement AI and Machine Learning platforms in support of their services operations. The time to move is now – before it’s too late in terms of having your competitors ending up being better equipped to support (and market to) their targeted customer base.

Q8. With the rise of IoT-connected devices and smart homes, what challenges lie ahead for the field service industry? 

Pollock: The rise of IoT connected devices and smart homes provides a major value proposition to customers, as well as to the FSM solution providers. However, what also comes along with the benefits are a number of potentially serious consequences. For example, once virtually everything is connected, smart systems will likely become more susceptible to power outages, hacking and various types of breaches in security. The analogy is: before watches, people used sundials to tell time. Then watches could help them tell time – until they either wound down, or the batteries went dead. Today, if the global satellite network goes down (e.g., as a result of space debris, solar flares, etc.), many things we all take for granted will stop working, including a partial/temporary halt to our ability to tell time, make change, or communicate to one another via our mobile devices.

As an example, I have written my responses to Field Service Digital’s questions for this interview with a pink post-it note covering the camera on my iMac. At the same time, Alexa is probably listening to anything I say without me even thinking about it. Somewhere across the globe, there is probably someone standing outside the front window of a home and yelling at Alexa, Googol or Siri to “remind me what my password is for the front door security code.” What the “expert” hackers can do to outsmart smart homes or businesses will only get more invasive – and potentially dangerous – over time (i.e., the invasions of privacy tend to happen first, with the “patch” or “fix” coming later).

The need to provide continual connectivity PLUS protect the privacy of the customer/user will be paramount as more and more smart implementations go into play.

SFG℠ Analysts Take Executive Summary: Has Your Services Organization Already Embarked on Its Servitization Journey?

Your Customers Have – and So Have Your Competitors! When Is Your Organization Going to Make Its Move?

[This Blog consists of a synopsis of SFG℠‘s latest Analysts Take paper on the topic of Servitization. You may either read the synopsis below, or – if you prefer – you may download a complimentary copy of the full paper, including more than a dozen charts and tables. To access the paper, simply click here: Servitization Analysts Take Paper.]

Overall, a majority (or near-majority) of survey respondents are currently using, or planning to use, the following factors to set their Outcomes-based service contracts:

  • 66%  Performance metrics (e.g., total output, time on task, utilization rate, etc.)
  • 51%  Asset uptime (i.e., uptime percentage for length of contract)
  • 49%   Time to service (i.e., guaranteed time from ticket-to-close)

Since adopting an Outcomes-based services model, the greatest benefits realized by FSOs have reflected:

  • 47%  Improved contract renewals
  • 42%  Improved technician utilization
  • 36%  Increased predictive outcomes
  • 33%  Increase in net new business
  • 16%  Increase in zero-touch service
  • 15%  Decreased time-from-ticket-to-invoice

SFG’s 2019 FSM Benchmark Survey Update (conducted in January/February, 2019) revealed that while nearly three-quarters (71%) of respondent FSOs were operating service as an independent profit center (or as a pure, third-party service company), there were still 29% that were operating as cost centers. However, it is noted that the percentage of FSOs then running as profit centers reflected a significant uptick from the 65% to 68% range reflected in SFG’s 2016 – 2018 annual FSM surveys.

However, the results from the 2019 Servitization Journey Benchmark Survey, conducted a mere six months later, reveal an even higher percentage of FSOs running their services operations as profit centers (i.e., 72%).

The percentage of services organizations running service as an independent profit center may vary – sometimes significantly – from one category or industry segment to another. For example, this percent increases to 74% for those operating as profit centers among FSOs with the highest customer satisfaction ratings (i.e., attaining at least 90% customer satisfaction). The percent is also virtually the same for FSOs that qualify for Best Practices status (i.e., attaining both 90% or higher customer satisfaction, and 30% or greater services profitability).

Currently, more than one-quarter (28%) of FSOs are using an Outcomes-based model for service delivery offered through their Service Level Agreements (SLAs). This percent is significant, as it has risen from a virtual “zero” basis in less than two years.

However, this percent is also expected to rise significantly, as nearly one-third (32%) of respondents plan to introduce Outcomes-based services into their portfolio of offerings in the next one-to-two years. If so, the percent of FSOs using an Outcomes-based services model would then represent an approximate 60% majority by 2021.

In fact, this percent may be even greater, as one-in-six respondents (17%) indicate they are “unsure” whether their respective services organization would make that move over the next couple of years. If the same percent of the “unsures” ultimately make that move as those respondents who cited either “yes” or “no” for the original question, the projected percent of FSOs employing an Outcomes-based services model would increase to a near-three-quarters majority (i.e., 72%).

A two-thirds (67%) majority of FSO respondents cite performance metrics (i.e., total output, time-on-task, utilization rate, etc.) as the principal factor they prefer using to gauge the success of their Outcomes-based service delivery model.

The only other factor cited by a majority of respondents is asset uptime (i.e., uptime percentage for length of contract) (52%), followed closely by time-to-service (i.e., guaranteed time from ticket-to-close) at just below 50% (i.e., 48% ).

More than one-third (35%) also cite fail rate (i.e., number of incidents for length of contract) as a primary factor).

Other criteria cited by respondents include:

  • Using the same metrics that customers use
  • Building remote services capabilities into a Customer Relationship Management (CRM) platform
  • Software usage / transactions handled
  • Customer satisfaction
  • Location serviceability
  • Product as a service (PaaS) / XaaS

Among those FSO respondents that have already adopted an Outcomes-based service model, at least one-third (33%) or more have realized significant improvements in Key Performance Indicators (KPIs) including:

  • 47%  Improved contract renewals
  • 42%  Improved technician performance
  • 36%  Increased predictive outcomes
  • 33%  Increase in net new business

These improvements are significant in that they do not only reflect beneficial ways in which these FSOs can support their customers, but also providing them with the ability to leverage those improvements into more of a predictive, rather than, reactive mode – all while leading to increases in net new business. As a result, the impact of moving to an Outcomes-based service delivery model not only improves the operational efficiency of the FSO – it also leads to incremental business development.

However, there are still several other improvements that may be realized, including:

  • 24%  Faster dispatch
  • 17%  Increase in zero-touch service
  • 15%  Decreased time-from-ticket-to-invoice
  • 15%  Selecting the most cost-effective pricing model
  • 12%  Others, including: increased profits, faster upgrades, etc.)

Of course, Servitization does not naturally happen in isolation – there are many factors that must be considered – and implemented – in order to create an environment within which this transformation may be realized. As may be expected, technology plays a critical role in the ability to make this transition, as reflected by the various technological tools and applications currently being utilized (and planned) by FSOs in support of their Outcomes-based services initiatives.

Overall, there are seven technology platforms and solutions that are currently being used by a majority of FSOs. Those approaching a two-thirds (i.e., 67%) majority include contract management (65%), Enterprise Resource Planning (ERP) service module (64%), and Spare Parts/Inventory Management  (SP/IM) system (64%).

However, those technologies cited for reflecting the highest levels of forecasted adoption (i.e., in the next 12 months) include:

  • 43%  Predictive diagnostics
  • 37%  Knowledge management application
  • 28%  Service forecasting and planning application
  • 24%  Internet of Things (IoT) platform
  • 24%  Remote monitoring / remote diagnostics
  • 23%  Contract management
  • 22%  Business intelligence / analytics

Delving a bit deeper, the technologies that are currently being deployed specifically to support an Outcomes-based services delivery model typically reflect a virtual “who’s who” of the most commonly reviewed (i.e., in trade publications and Webinars, at services conferences, etc.) “new” and “emerging” technologies that are, in large part, responsible for providing the foundation upon which Servitization can be built.

In fact, a majority of FSOs claim to currently be using the following technologies to power their respective Servitization initiatives:

  • 54%  Service management platform (i.e., FSM, or Enterprise Asset Management)
  • 51%  Enterprise Resource Planning (ERP)

Just bubbling under the 50% mark, predictive maintenance is cited by 48% as also being one of their current Outcomes-based services technologies.

However, there are still several other technologies that are also cited by respondents, including:

  • 38%  Routing optimization
  • 27%  Artificial Intelligence (AI) or Machine Learning
  • 27%  Enterprise Asset Management (EAM)
  • 11%  Augmented Reality (AR)

Field services managers are faced with multiple challenges, primarily focused in the areas of (1) management buy-in to transformation initiatives; and (2) the costs associated with acquiring, implementing and deploying new technology. As such, there are many potential roadblocks that may interfere with an FSO’s ability to successfully make the transition from a traditional Service Level Agreement (SLA) contract model to a Servitization Outcomes-based model.

The top challenge, as cited by a plurality of survey respondents at 26%, is obtaining management buy-in from the top, followed closely by the cost of introducing new technologies into existing services operations (23%).

To a somewhat lesser degree, there may still be several other potential roadblocks standing in the way, including:

  • 14%  Time it will likely take to move to a Servitization business model
  • 12%  Obtaining technician buy-in
  • 11%  Lack of existing technologies to pull it off
  •   6%  Ability to enlist our strategic service partners to join us in the Servitization Journey

It is interesting to note, however, that the following five factors receive zero responses, including lack of a corporate services mentality/philosophy; lack of a full understanding as to what exactly is the Servitization Journey; ability to convince customers that the Servitization Journey will lead to better, more cost-efficient, services delivery; and senior management unwillingness to change our existing business model which has been relatively successful so far.

When thinking about the overall Servitization Journey, the single-most commonly cited reason for moving forward on the Journey is centered around the ability to meet (or exceed) customers’ services expectations (i.e., cited by 46% as the top reason).

Most of the other cited reasons are clustered in the 10% to 18% range, including ability to improve our overall services delivery (18%), ability to price our services offerings more profitably (13%), ability to incorporate new technologies into our overall services delivery model (11%), and ability to streamline our services offerings (10%).

As was previously borne out in SFG℠’s 2019 Field Service Management Benchmark Survey Update, the primary factor driving FSOs in just about everything they do is the ability to meet and/or exceed their customers’ expectations for service. It is duly noted, however, that the 46% that cited this factor in the 2019 Servitization Journey survey (compared to only 10% to 18% for all other factors) reflects the greatest plurality attained thus far in any of SFG℠’s field service-related surveys conducted in recent years. As a result, we would suggest that the Servitization-oriented FSOs represent the most customer-focused organizations in the overall competitive landscape.

Presently, only one-quarter of respondents (25%) report that a majority of the customer equipment they support in the field is connected (i.e., via the Internet of Things/IoT). This leaves three-quarters (75%) for which less than half of the equipment they serve is presently connected.

However, these percentages are expected to flip-flop over the next five years (or sooner), as by 2024, a majority of the equipment supported in the field is projected to be connected (i.e., as cited by 57% of current survey respondents).

The most progressive FSOs today are represented by the one-in seven (i.e., 15%) that report at least 75% of the equipment they support as currently connected. However, this percent is also projected to more than double over the next five years to 31% anticipating supporting a majority-connected customer installed base.

Conversely, the number of respondents citing that less than one-quarter of their respective equipment bases are currently connected is projected to decline significantly, from 45% today, to only 18% by 2024 – a decrease of roughly 60%.

As such, the current survey results have painted a picture of a significantly transforming installed base of equipment, moving from a majority non-connected to connected within an approximate five year (or less) timeframe.

As Servitization continues to transform the field services industry, so, too, will the way in which services will likely be offered to the global services community. For example, today, 90% of service contracts are built on the basis of traditional Service Level Agreements (SLAs) that focus on such parameters as on-site response time, number of scheduled preventive maintenance service calls, guaranteed uptime (i.e., with vendor sanctions for non-compliance), and the like.

However, within the next three to five years, this percent is expected to drop by more than 60% to roughly only one-quarter (26%) of all service contracts. Conversely, the percent of FSOs offering SLAs/contracts based on Outcomes/uptime, is projected to more than double, from 26% today, to 53% by 2022 – 2024. As such, this represents a total reversal of the way SLAs/contracts will be offered in the not-too-distant future.

It is also noted, however, that these findings reflect a greater – and most likely, a faster-moving – transition from relying on standard SLAs to moving toward Outcomes/uptime-based contracts (i.e., as initially quantified in the earlier-conducted 2019 FSM survey update).

There are a multitude of factors that may influence the perceptions of an organization’s current service model among survey respondents. However, changes in the industry (40%), growing customer pressure (39%) and new technology enablers (36%) appear to be the primary ones cited.

However, other factors may also play an important influencing role, including:

  • 29%  This is how we’ve always done it
  • 20%  Internal pressures from key stakeholders

Of the two, “This is the way we’ve always done it” may represent the most “dangerous” factor, as it does  not portend well for the organization if there is a “No need to fix it, since it’s not broken” approach to service delivery in general, and Servitization, in particular.

Survey respondents appear to have a clear and distinct view of how they feel specifically about Outcomes-based services contracts (i.e., there is little middle ground), as evidenced in their responses to the following set of statements.

The highest level of agreement (and the only response cited by a majority of respondents) is reflected for a single statement, with all of the remaining statements receiving far fewer “agree” responses, as follows:

  • 84%  Outcomes-based service represents a fundamental shift in service delivery
  • 42%  Our business will make a determination about outcomes-based service when there are more   successful use cases
  • 35%  We are confident that our business, headcount, and service apparatus can support an outcomes-  based service model
  • 24%  We are confident that our technology investments are sufficient to support an outcomes-based   service model
  • 10%  Our business has no interest in outcomes-based services

Still, the net-net responses suggest that while most respondents see Outcomes-based services as a “fundamental shift” in the way they have been doing business historically, levels of confidence in their ability to adapt remain relatively high (i.e., for a concept still in its infancy), and once they can garner more information, they will be better able to make a more informed (and, most likely, transformative) decision with respect to how best to proceed down the path to Servitization.

However, merely understanding – and agreeing with – the concept of Servitization is not even half of the battle! Once an organization embarks on the Servitization Journey, it will need to know what it takes to fully make the transformation – as well as how to position and price it in its relevant marketplace.

From the survey results, it is clear that two factors stand above all others with respect to their contribution to the organization’s overall pricing model. They are:

  • 62%  Projected total cost of service for the lifetime of a contract (i.e., service and associated costs)
  • 57%  Service history for client and asset types.

However, there are still two other factors that are also cited as key considerations by just under half of respondents, including:

  • 46%  Inventory and parts pricing
  • 44%  Competitor pricing

Finally, asset data sourced from connected devices (18%) rounds out the cited responses. Still, there are one-out-of-six respondents (16%) that claim, “We set pricing without any external guidance”. [Note: Please do not try this at home!]

Based on the results of SFG℠’s 2019 Servitization Journey Benchmark Survey, the key takeaways are:

  • Presently, nearly three-quarters (72%) of respondent FSOs are operating service as an independent profit center (or as a pure, third-party service company), although there are still one-quarter (25%) that are operating as cost centers
  • Currently, more than one-quarter (28%) of FSOs are using an Outcomes-based model for service delivery and their Service Level Agreements (SLAs), compared to a virtual “zero” basis only two years earlier
  • A two-thirds (67%) majority of FSO respondents cite performance metrics (i.e., total output, time-on-task, utilization rate, etc.) as the principal factor they prefer using to gauge the success of their Outcomes-based service delivery model
  • Among those FSO respondents that have already adopted an Outcomes-based service model, at least one-third (33%) or more have realized significant improvements in Key Performance Indicators (KPIs) including improved contract renewals (47%), improved technician performance (42%), increased predictive outcomes (36%) and an increase in net new business (33%)
  • Overall, there are seven technology platforms and solutions that are currently being used by a majority of FSOs, including three approaching a two-thirds (i.e., 67%) majority: contract management (65%), Enterprise Resource Planning (ERP) service module (64%), and Spare Parts/Inventory Management  (SP/IM) system (64%)
  • A majority of FSOs claim to currently be using a service management platform (i.e., FSM, or Enterprise Asset Management) (54%), and Enterprise Resource Planning (ERP) (51%) to power their respective Servitization initiatives
  • The principal roadblock, as cited by a plurality of survey respondents at 26%, is obtaining management buy-in from the top, followed closely by the cost of introducing new technologies into existing services operations (23%)
  • When thinking about the overall Servitization Journey, the single-most commonly cited reason for moving forward on the Journey is centered around the ability to meet (or exceed) customers’ services expectations (i.e., cited by 46% as the top reason)
  • Presently, only one-quarter of respondents (25%) report that a majority of the customer equipment they support in the field is connected (i.e., via the Internet of Things/IoT); however, by 2024, this percent is projected to more than double, to 57%
  • Today, 90% of service contracts are built on the basis of traditional Service Level Agreements (SLAs) that focus on such parameters as on-site response time, number of scheduled preventive maintenance service calls, guaranteed uptime (i.e., with vendor sanctions for non-compliance), and the like; however,  within the next three to five years, this percent is projected to drop by more than 60% to only 26%
  • Changes in the industry (40%), growing customer pressure (39%) and new technology enablers (36%) appear to be the primary factors influencing the perceptions of an organization’s current service model
  • Currently, 84% of FSO respondents believe that Outcomes-based service represents a fundamental shift in service delivery; and roughly half that amount (42%) have adopted a “wait and see” approach for making a determination about outcomes-based service until such time when there are more successful use cases to review and assess
  • It is clear that two factors stand above all others with respect to their contribution to the organization’s overall pricing model, including projected total cost of service for the lifetime of a contract (i.e., service and associated costs) (62%), and service history for client and asset types (57%)

Overall, the results from SFG℠’s 2019 Servitization Journey Benchmark Survey clearly reflect the great strides that the global services community has made in its move toward adopting Servitization in just the past two years alone. Most of the data collected and analyzed in the current survey appear to support the notion that the transition from a traditional services delivery model to one predicated on the concept of Servitization is apparently moving at an accelerating rate.

As a result, we strongly believe that the concept of Servitization – and the desire to move toward that business model – has built up quite a bit of momentum of late, and is likely to carry over throughout 2020 – and far beyond.

Lessons Learned from WBR’s 2019 Field Service Amelia Island Conference – Advancing Service Together through Innovation, Cross-Industry Best Practices & Transformation

[WBR’s annual Field Service Amelia Island conference is one of the premier Field Services event of the year – and this year was, once again, no exception! More than 350 field service professionals attended the conference from August 18 – 21, 2019.

The following is a brief excerpt from SFG℠‘s “Lessons Learned …Analysts Take report, written and distributed under the auspices of WBR. Our suggestion? Don’t read the following excerpt – go to the bottom of the page and download a complementary copy of the full report, and read up on what the key players in the field services community had to say with respect to “Advancing Service Together!“]

Since 2003, WBR has been bringing together the world’s leading services organizations to “benchmark, establish best practices, embrace new technologies and build a strong network to enhance its attendees’ services businesses and field operations.” Each successive conference over the past 16 years has provided participants with “future-facing content and a mix of interactive session formats that ensure [they can] learn and network most effectively.” As such, these annual (and mid-year) Field Service events are designed to set up its attendees “for maximum profitability and competitiveness in [their] service business.”

And this year’s Amelia Island event did not disappoint, as the nearly 400 onsite attendees would most likely attest!

“At Field Service Amelia Island I learned that Field Service professionals love to learn new ways to improve service delivery since that is often the first (and only) personal contact a customer has with their brand. They are especially eager to explore what technology can do to optimize their field service fleets to get them to job sites efficiently and safely.”

– Carol Roden, Senior Product Marketing Manager, Lytx

The main theme for WBR’s 2019 Field Service Palm Springs conference was billed as “Advancing Service Together”, similar to the Palm Springs event held earlier in the year – and the succession of speakers, presenters, moderators, panel participants and practitioners all supported that theme throughout the conference by sharing examples (i.e., mostly success stories) about how it takes a strong commitment to teamwork to have any chance of meeting, let alone exceeding, management goals for improving employee and customer satisfaction – while at the same time, driving increased services revenue streams and making a profit by doing so.

“After attending the Field Service Conference on Amelia Island, the importance of disruptive service, and understanding that what got our businesses to their current level of success will not take them to the next level of success is evident. In an XAAS world, those organizations that embrace these transformations with technology and culture will win!”

– Mary Flake, General Manager – Coastal Southeast Service, Comfort Systems USA

The ”Lessons Learned” at the conference were many, and we have attempted to summarize the main sessions (and lessons learned) in the text that follows. Please note that not all of the sessions are highlighted and summarized in this document; however, there are many others that are available through WBR directly. Also, if you missed the chance to have one of your “lesson learned” quotes included in this paper, … well, there’s always next year in Palm Springs or, again, at Amelia Island!

Each of the three Main Days of the conference had a particular focus, beginning with Day One setting its sights on “Technology and Process Innovation for Efficiency”; Day Two focusing on “Disruptive Service & Customer Value; and Day Three focusing on “Leadership & Service Revenue Generation.”

Overall, WBR’s 2019 Field Service Amelia Island conference gave every attendee the opportunity to learn, question, network, buy/sell and interact with vendors, practitioners, editors, writers, industry experts, consultants, research analysts, peers and competitors and every other important person or company in the field services business.

The temperature was not as hot as in Palm Springs, earlier in the year – but the topics covered at the conference were still “red hot”. One of the key learnings from this year’s event is that “the main benefit of this conference is that it represents a middle ground between what we all learned last year, and what we will expect to learn next year.” As such, this year’s conference represented another key milestone in the Journey that we, as an industry, are taking along with our customers.

At the risk of repeating myself from the “Lessons Learned …” Analyst Take paper distributed following this year’s Palm Springs conference, I believe the following quote still stands true:

“As Bob Dylan once wrote and sang, ‘The times, they are a’changin’.    He must have been singing about the field services industry!”

– Bill Pollock, President & Principal Consulting Analyst
Strategies For Growth℠

Here’s looking forward to seeing you all at Palm Springs and Amelia Island again next year!

[To download a complementary copy of the full “Lessons Learned …” report, simply click here: @@@ 2019 Field Service Amelia Island Analysts Take Report (Final Draft – 19-09-17).]

Global Field Service Management (FSM) Trends for 2019/2020 – and Beyond!

The results of Strategies For GrowthSM‘s (SFGSM) 2019 Field Service Management (FSM) Tracking Survey reveal a healthy – and expanding – global services market that appears to have clearly rebounded from the economic downturns and upheavals experienced over the previous 10 years or so (i.e., since the 2008 economic bust). In fact, the global FSM market is now poised to make significant strides forward in terms of growth, technology adoption and the integration of those technologies into existing (and improved) services operating plans and processes.

However, there are still many obstacles along the way, and those Field Services Organizations (FSOs) that are not prepared to adapt to the “new” way of running a services operation will be ill-prepared to compete on a head-to-head basis with those that are. For example, the top future challenges cited by survey respondents as likely having the greatest impact on their ability to acquire and/or integrate new technologies into their existing field service operations may be summarized as follows:

  • 43%  Return-on-Investment (ROI) on the acquisition of new technology
  • 34%  Identifying all of the required functionality for the organization
  • 30%  Cost of new technology
  • 28%  Potential disruption from new technology implementation and burn-in
  • 27%  Obtaining management “buy-in” for new technology acquisition

Other challenges, such as selecting the most effective FSM solution (19%) and integrating new technologies into existing FSM solution platforms (16%) are also cited as rounding out the top challenges facing the global FSO base.

The good news is that there are also significant and distinct opportunities, or benefits, that can be realized by FSOs, regardless of type, size or coverage, through the acquisition and integration of these new technologies. For many FSOs, these may include:

  • 39%  Ability to run a more efficient field service operation by eliminating silos, etc.
  • 37%  Improving customer satisfaction
  • 36%  Ability to provide customers with an end-to-end engagement relationship
  • 27%  Establishing (or strengthening) a competitive advantage
  • 27%  Improving field technician utilization and productivity
  • 25%  Reducing Total Cost of Operations (TCO)

But these opportunities and benefits do not automatically produce themselves – there needs to be a formal plan for attaining these goals, and many of the leading FSOs already seem to know how to go about making it happen.

The 2019 survey results also reveal that more than two-thirds (71%) of global FSOs currently run their services operations as profit centers, rather than as cost centers. This percent represents an increase from roughly 66% only three years earlier, but more than 10 percentage points above roughly a decade ago. In fact, the percent increases to 74% for those FSOs attaining 90% or greater customer satisfaction, and up to 81% for Best Practices FSOs that also achieve 30% or greater services profitability.

As we move through the uncharted waters of 2019, 2020 and beyond, the future state of the global Field Service Management (FSM) market will depend largely on which strategic actions FSOs plan to take in the ensuing 12 months or so. Since these actions will be directly linked to the multitude of drivers that are most likely to influence decision making within the global services community, this would be an excellent place to start!

The 2019 survey results reveal that the top drivers cited as being most influential on the future success of FSOs may be categorized into three main areas:

  1. Need to improve service workforce utilization, productivity and process efficiencies
  2. Meeting (or exceeding) customer demand for quicker response and improved asset availability
  3. Internal mandate to drive increased service profitability and revenues

However, once the key market drivers are firmly identified, FSOs need to create – and implement – the most effective strategic planning actions to address them head-on. As identified in SFGSM‘s 2019 survey, the most commonly implemented strategic actions, currently, are:

  • 47%  Develop and/or improve KPIs used to measure field service performance
  • 43%  Invest in mobile tools to support field technicians
  • 38%  Automate existing manual field service processes and activities
  • 34%  Integrate new technologies into existing field service operations

The question then arises: What can your FSO realize from aggressively addressing each of these challenges and opportunities head-on, recognizing the key market drivers, and taking the strategic (and tactical) actions to take the organization to the next level?

The answer is simple! The average FSO is currently attaining 37% services profitability and 84% customer satisfaction (although 26% are not even attaining 20% profitability, and 20% are not attaining 80% satisfaction). Therefore, while the opportunity is there, not all FSOs have their operations in order to aspire to the next levels of Best Practices.

So, … if your organization is not currently attaining desired levels of profitability and satisfaction – or even worse, finds itself among those not even attaining lower levels of performance – now would be the perfect time to consider acquiring a Field Service Management (FSM) (or a Connected Field Service, or CFS) solution that can help it to attain these loftier levels, without losing any more ground to the industry leaders who have already taken the appropriate actions.

[BTW – Have you already taken SFG℠‘s 2019 Servitization Journey Benchmark Survey? If yes, then, thank you! If no, please accept our invitation to take the survey by clicking on the following Weblink: https://www.surveymonkey.com/r/SFGServ19. Thanks!]

Bill Pollock, of PollockOnService, to Conduct Pre-Conference Workshop at 2019 WCM in Orlando

[Partial excerpt, written by Eric Arnum, publisher of Warranty Week. Reprinted from the February 22, 2019 issue.]

Warranty professionals heading to Orlando for the 15th annual Warranty Chain Management Conference could arrive a day early to attend any of six different workshops on topics such as fraud detection, claims handling, customer satisfaction, and how to launch or expand a commercial or consumer service contract program.

The Warranty Chain Management Conference, less than three weeks away, officially begins with a welcome reception the night of Tuesday, March 12. But for those who can get to town a bit earlier, there are six different pre-conference workshops on the schedule, covering an array of product warranty- and service contract-related topics.

There are three workshops in the morning and three in the afternoon. For attendees looking to strengthen their knowledge of how things work in the service contract industry, there are excellent choices in both timeslots.

Increasing Customer Satisfaction and revenue generation

In the afternoon, from 2 to 5 PM, Bill Pollock, the president of Strategies for Growth, will deliver a workshop entitled, “Transforming Warranty Management Into Improved Customer Satisfaction and Revenue Generation,” which will also be aimed at commercial products.

Pollock said that a central theme of his workshop will be the need for warranty managers, especially those in the business-to-business sector, to not only do a good job, but to also get the word out to customers that the company is doing a good job with warranty.

“A lot of organizations and a lot of managers within those organizations look at improving the processes they use to deliver services as the end-all, be-all,” he said. “But if you’re doing something really good, and you’re not letting the world know about it, then you’re missing an opportunity.”

Pollock said he sees much the same story with many companies that do a good job with fleet management or reverse logistics: they don’t tell their story well, so customers don’t know what makes them better than other companies. On the other hand, those that promote what they do, creating some market awareness about it, find that it draws some customers in who might not otherwise be engaged. And for existing customers, it results in improved customer satisfaction, which leads to better customer retention levels.

“My goal is to be a value-add for warranty managers who are immersed in their activities,” Pollock said, “to let them know there’s the marketing and the promotions that you have to get out there. And if you do that, then you’re going to improve customer satisfaction, and you’re going to generate more revenue.”

Pollock said he’s not suggesting that companies become tedious and off-putting through their constant self-promotions. “But if you’ve done something good, if you’ve upgraded your processes, if you’ve moved from a premise-based system to a cloud-based system, or some sort of hybrid, let the market know about it.”

During the decades he’s been studying companies, Pollock said he’s seen three big themes recur in the surveys and in the research studies he’s helped to produce: 1) companies improving the processes they use to deliver services, 2) companies focusing on the needs of the customer, and 3) the financial costs. When times are tough, cost-cutting takes the lead. But when times are good, and the funds are available, process improvements tend to become priorities. What he’s saying is “don’t forget the customer”.

“Right now, we’re at an interesting time,” he said. “Our 2019 Warranty Management Survey Update has shown for the first time in the last five years, that the number one focus is back squarely on the customer. The number two focus is on improving processes. And the number three focus is on financials. So it looks like, as an industry, we’ve got our act together.”

The first half of the workshop, Pollock said, will focus on ways to promote your process improvements to the market, and how to turn that into improved customer satisfaction and revenue increases. The second half will show the correlation between these suggestions and the actual results of the company surveys Pollock has performed in recent years. And he will ask attendees where they see their organizations fitting into the results.

“Toward the end of that series of charts and interactions,” Pollock said, “I’m going to show the mean averages that warranty managers have been attaining for customer satisfaction, average claims cycle time, and profitability. What I want to do is show attendees that once you start falling behind the curve, the way everything’s moving so quickly, and the way your competitors and peers are embracing new technologies, you’re going to fall even further behind the curve – unless you take the appropriate actions.”

Invitation to Register for Two Webinars Covering the U.S./Canada & UK/Europe FSM Markets

To All Field Service Management (FSM) Professionals:

We invite you to register for our two complimentary Webinars on Thursday, February 7th – less than one week from today!
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  • Webinar #1*: UK/Europe Still Lags Behind the U.S. with Respect to FSM PerformanceThursday, 7 February at 13:30 GMT (8:30 am ET)
  • Webinar #2*: “The State of Field Service Management (FSM) in 2019 – and Beyond”; Thursday, February 7, at 11:30 am ET (16:30 GMT)

Click here to register for one, or both, Webinars

Based on the results of the 2018 Strategies for Growth℠ FSM Benchmark Tracking Update Survey, here are some of the key Market Drivers that will be revealed:

  • A majority of global Field Services Organizations (FSOs) presently manage their service operations as a profit center (60% for UK/Europe, and 55% for the U.S./Canada)
  • A majority of global FSOs are currently using CRM and Contract Management apps to drive their services business
  • The average services profitability realized by U.S./Canada FSOs is 32%, compared to 36% for UK/Europe FSOsx

[BTW – If you haven’t taken it yet, the survey link for SFG℠’s  2019 Field Service Management Tracking Survey is: 

Thank you in advance for your participation. Hope to see you there!
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Bill

Complimentary, Companion, SFG℠ Analysts Take Paper to Our “The Future of Field Service” Article

Sarah Nicastro, in her new position at IFSWorld, has just launched the inaugural issue of her e-journal, The Future of Field Service! It was my honor and privilege to have written more than 30 pieces for her while she was Publisher/Editor at Field Technologies and Field Technologies Online – and I am grateful for the opportunity to continue to write for her in her new role!

Here’s wishing that Sarah continues to enjoy the success she has built all around her for more than a decade serving the Field Services segment!

In the meantime, please feel free to download this complimentary, companion, Analysts Take paper to our first (of many) The Future of Field Service articles; The Future of FSM (Draft-18-11-28-01)

The Benefits of SLM May Be Transformative For Your Services Organization!

Managing today’s service enterprise means planning and coordinating service on a global scale. It means delighting your customers – and your shareholders. And it calls for new technologies and business practices designed specifically to solve the Service Lifecycle Management (SLM) challenge. Based on these reasons, we believe that any services organization that strives to provide “best-in-class” field service in support of its customers must first implement a robust SLM solution in order to achieve its objectives.

While at first glance, it may appear that there are many alternative SLM solutions available; however, not all of them are designed with the same levels of functionality, applications, and comprehensiveness that the SLM market requires – i.e., the key ingredients for success. Simply listing and describing the potential benefits of SLM constitutes only half of the battle – prospective users will still need to “sell” the concept of SLM to management in order to gain their “buy-in”.

The benefits of implementing an SLM solution are many – and are fairly universal (that is, applicable for virtually every services organization, regardless of type, size, or geography served). Users typically identify the following five areas of benefits as the most compelling talking points in selling the concept to management;

  1. Reduced Service Costs
  2. Streamlined Workflow
  3. Improved Service Levels
  4. Enhanced Quality and Growth
  5. Increased Customer Satisfaction
  1. Reduced Service Costs

Simply citing generic data regarding potential cost reductions does not generally entice management to look any further. In order to truly gain their attention, it must be specified exactly where the cost savings will be coming from – and to what extent (i.e., provide them with hard numbers). The good news is that a robust SLM solution can manifest quantifiable cost savings from several specific areas including:

  • Improved technician productivity
  • Improved Inventory/parts management
  • Optimized service delivery
  • Reduced time in the “service-to-cash” cycle

These areas of cost savings will very likely peak management’s interest – as well as entice them to ask for more detailed cost-saving information. For example:

Improved Technician Productivity

Through SLM, improvements in technician productivity can be gained in a variety of ways including:

  • Providing field technicians with real-time, direct access to customer service history, equipment repair records, product information, and inventory and parts availability enables them to provide the best service possible in the most cost-effective manner by eliminating time-consuming paperwork and forms preparation. As a result, the technicians are able to spend virtually all of their time (i.e., billable time) providing their customers with the highest levels of service and support, rather than simply collecting information and filling out forms.
  • Providing field technicians with specific service level information for each customer they serve so that they never unknowingly provide their customers with anything less – or more – than those levels of service that are specifically covered in their respective Service Level Agreements (SLAs).
  • Reducing overhead costs through the elimination of most paperwork, delays in communications, and the use of outdated systems that had previously required manual data entry or redundant data input.

Empowered by the data and information made available through SLM, field technicians can also serve as the “eyes and ears” of the organization with respect to identifying potential cross-selling or upselling opportunities for the company’s various products and services. For example, armed with recent service call activity data, a field technician can provide customers with fresh information on new product or service offerings that would ultimately benefit their operations in the long-run – while at the same time, identify potential leads for the company’s sales team. By doing so, customers will not only look at their field technician as “the person who gets things fixed”, but also as a “trusted advisor” – or the one they can count on to both fix their equipment, and provide them with recommendations for acquiring new products and/or upgrading their service level coverage.

However, while improved technician productivity is generally an eye-opener to management, there are still far more compelling cost benefits that can also be gained through an SLM solution.

Improved Inventory/Parts Management

SLM can also result in “hard” cost savings through improved inventory/parts management, as summarized below:

  • SLM enables services organizations to enhance their Equipment Asset Management (EAM) capabilities by allowing them to track specific component/equipment relationships, and monitor their inventories for the purpose of automatic replenishment. By developing – and following – tightly integrated inventory management processes, users are able to significantly reduce inventory size and related carrying costs.
  • SLM also provides technicians with access to real-time inventory information, as well as the ability to order parts directly from the field, rather than having to wait until they return to their home base, or gain access to a telephone connection. The ability to work with real-time parts/inventory information provides both the technicians – and the customers they serve – with immediate access to parts availability, while simultaneously updating inventory levels and triggering automatic replenishments.

Some organizations may also wish to implement “vendor managed inventory”, or “just-in-time” inventory replenishment models to support their customer base, so that once a needed part is identified, it can be ordered and shipped immediately from the vendor source to the customer site. These types of fast-track inventory models can be easily implemented and supported through SLM.

However, while improved inventory/parts management ultimately benefits both the services organization and the customers it serves, there are still additional cost savings benefits that management can literally “take to the bank”.

Optimized Service Delivery

Optimized service delivery may mean different things to different people; however, the most compelling benefits of service optimization delivered through SLM are typically realized in terms of:

  • Minimized time to dispatch (i.e., quicker response time);
  • Increased first-time fix rates (i.e., fewer repeat failures and/or service calls); and
  • The ability of customers to perform self-diagnosis and problem resolution viathe Internet.

Ultimately, each of these benefits is realized through improved response time, decreased need for follow-up/repeat calls, and less equipment downtime. Even so, there are still several other types of benefits that will also be of significant interest to company management.

  1. Streamlined Workflow

Technology is the tool that assists services organizations in making their operations run more efficiently – but it is only a tool. However, SLM leverages best-of-breed service management solutions with industry best practices already built-in, thereby allowing practitioners to benefit not only from the automation of their current processes, but also by allowing them to redefine and improve their processes to deliver optimum results. These results are typically manifested in the following ways:

Integrated Processes and Technologies

Only through SLM can the practitioner benefit from a completely integrated and seamless solution that provides an instant 360-degree web-based view of the entire business. For example, when Sales or Marketing require information from Service Operations to develop targeted promotions to maximize cross-sell and up-sell opportunities, a robust SLM solution can give them exactly what they want– when they want it. Similarly, when Service needs real-time customer information from the Contact Center prior to making a call, SLM makes that information readily available.

A unified and modular approach, based on open industry standards, protects the users’ existing IT investments, lowers their Total Cost of Ownership (TCO), and paves the way for the deployment of the appropriate SLM modules – as required – as the organization grows.

Improved and Streamlined Processes

The end result of successfully integrating the organization’s processes and technologies is improved and streamlined processes – in otherwords, running the organization more efficiently. These benefits are typically manifested in the following ways:

  • Through an automated call management system based on CTI, IVR, dynamic scheduling and dispatch, and closure capabilities, services organizations can rapidly improve and streamline their call management process, thereby significantly increasing customer satisfaction and retention.
  • With the ability to apply contract templates, initiate automatic contract renewals, and build structured workflow processes, users can maximize their contract processing, resulting in more predictable revenues and improved productivity.
  • The capability to track, monitor, and automate stock based upon user-defined rules, in conjunction with the ability to support multiple warehousing strategies, also leads to improved and streamlined stock management levels at reduced inventory levels (also resulting in reduced inventory costs).
  1. Improved Service Levels

There are basically two ways to look at SLM – (1) as a tool for lowering the cost of doing business, and (2) as a means for improving existing service performance. While the cost savings may be very real, SLM can also be a significant contributor to the overall improvement in the levels of service performance for the organization. Complete charge capture, and maximizing cross-selling and up-selling opportunities are just some of the ways that play to both perspectives on SLM.

Complete Charge Capture of Service Delivery

SLM enables the complete capture of all parameters involved in delivering service (e.g., parts, T&M, expenses, ancillary services, extended warranties, etc.) ensuring that no billable charges are ever lost or overlooked, and ultimately improving invoicing accuracy. Through SLM, as soon as the technician closes a call and captures the customer’s electronic signature, that data can instantly be transmitted to the central billing system, thereby significantly streamlining and compressing Days Sales Outstanding (DSO).

An SLM system can also serve a useful role in assisting organizations in improving future product (and service) designs by identifying any flaws in their existing products based on both aggregate and product-specific service history. What’s more, by continually tracking product service history over time, any new or emerging design flaws can be identified as a particular product line moves through its maturity cycle, or as a new product line is introduced.

Maximized Cross-Selling and Up-Selling Opportunities

Through the capability of leveraging a Web-based customer self-service portal in conjunction with a dynamic self-learning knowledgebase, users gain the ability to offer new products/services at every customer interaction, resulting in increased revenues without increasing costs. A state-of-the-art SLM solution that embeds intelligent automation along with a robust product information management repository can arm all of the employees in the field with first-rate cross-selling and up-selling capabilities by prompting/alerting them of any potential sales opportunities (e.g., contract/warranty expirations, aging equipment, ancillary accessories, add-ons, etc.) at the specific time of interaction with the customer. Past Strategies For GrowthSM, “Studies have shown that there is no better place to cross-sell or up-sell than at the specific point of customer interaction – and SLM is the only solution that provides field personnel with all of the tools they need to make it possible.

Ability to Leverage Service as a Competitive Advantage

Through SLM’s Business Intelligence (BI) capabilities, users can identify, monitor, and track opportunities to offer customized and global service agreements based upon each customer’s unique usage levels. By doing so, the customer benefits from having its service needs and requirements fully met, and the services organization can maximize its total revenues in the field. SLM also supports the services organization’s ability to deliver proactiverather than reactivepersonalized service – at an affordable price – empowering it to exceed customer expectations and generate repeat sales.

  1. Enhanced Quality and Growth

While most of the benefits described thus far focus primarily on transitioning from the past to the present, enhanced quality and growth clearly looks to the future of the organization – and this is where SLM excels. The three main components of these forward-thinking benefits may best be summarized as follows:

Ability to Deliver Consistent Service Globally

The most effective SLM solution is one that is truly global, able to support customers using all types of equipment, in all applications, and in all geographies by using the same database. As such, the SLM solution must be designed to implement common business processes on a single system worldwide with support for multiple currencies, operation centers, and price books – and be able to support global, regional, and local views of the service operation.Even if your organization does not presently operate on a global basis, your SLM solution must be ready to step up to the opportunity if it arises.

Modularity for Supporting Growth

An SLM solution must also be able to grow with the organization. Few services organizations actively plan to reduce their operations over time; however, with today’s economic and competitive pressures continually limiting available growth opportunities, services managers have to take advantage of every real opportunity that comes their way – and the best way to do this is through system modularity. For example, few systems today can support a global deployment through a single application.

As the service business grows, it will also likely require additional solutions to support that growth. A robust SLM solution will be able to support the business through the availability of specific modules that can be easily – and seamlessly – added as it undergoes growth, or change. Only a scalable SLM solution can offer the precise configuration and functionality that can enable a services organization to continue to support a growing number of users as it, itself, grows in size and capability.

Improved Quality and Reduced Costs

Through SLM, users are also able toidentify defective, outdated, or unnecessary parts, resulting in both enhanced quality of service delivery and reduced costs. More importantly, the most cost-effective spare parts can be easily identified and stocked, and any individual line items that may be adding unnecessary costs to operations can also be identified and flagged.

  1. Increased Customer Satisfaction

Historically, for some operations managers, customer satisfaction has been nothing more than an inexact science that defies accurate reporting, consumes a great deal of time and resources, and is immeasurable in terms of actual results. However, the vast majority of services managers in today’s marketplace recognize customer satisfaction for exactly what it is – an essential building block for long-term, profitable relationships that ultimately leads to customer loyalty and repeat business.

Numerous studies have also shown that acquiring a customer is a great deal more expensive than retaining an existing one. What’s more, the level of service a company offers may ultimately be the principal deciding factor between whether a customer becomes loyal to its vendor, or decides to switch to a competitive vendor, platform, or service. By utilizing SLM to anticipate customers’ needs and requirements, improve responsiveness, and deliver consistent service, services organizations can improve the way in which their customers perceive the quality of their service offerings – and this will go a long way in their ability to transform customer satisfaction into true customer loyalty.

The principal benefits of facilitating the transition from customer satisfaction to loyalty are summarized below:

Ability to Anticipate Customer Service Requirements

SLM provides users with easy-to-use functionality, an intelligent knowledgebase, and a comprehensive customer repository to track problems and potentially identify many other problems before they occur. With this valuable information at their fingertips, users can offer more efficient scheduling for preventive maintenance (or implement an IoT-powered Remote Diagnostics / Remote Monitoring platform), and minimize the need for on-site visits and repeat service calls, wherever possible. As a result, customer satisfaction is increased, and costly unscheduled service visits can be minimized.

By having real-time, anytime, anywhere access to customer information, repair histories, parts availability, and technical product specifications, field technicians will always be properly prepared and empowered to complete all of their work during the first visit to the customer site, thereby saving both the service provider and the customer time and money.

Improved Responsiveness to Customer Calls and Service Delivery

SLM empowers Contact Center and field personnel with visual alerts, automatic escalation, scripting, and question trees, so they are able to respond to customers’ inquiries quicker and more completely. Through SLM, they will also have a full range of corporate knowledge stores readily available to optimize the customer interaction process. In addition, the integrated, multi-channel inbound/outbound capabilities facilitated by SLM provide for unparalleled customer support in all areas, including placing and tracking an order, updating records, making payments, receiving remote support, and scheduling a service call. As a result, there will be significant improvements realized with respect to first call resolution, decreased call center times and costs, and the ability to deliver consistent – and consistently high – levels of service.

Making It Easier to Do Business – Making It More Profitable

In today’s increasingly fast-paced business environment, customers have very high expectations, and they will take no excuses for poor customer service. They expect fast, relevant, and accurate information from the companies they do business with, and they will accept nothing less. The self-service capabilities offered through SLM provide customers with all of the information they need – when they want it, anytime, anywhere. This, in turn, ultimately results in improved customer satisfaction and strengthened loyalty throughout the user’s customer base.

By implementing a state-of-the-art SLM solution, services organizations can positively impact all aspects of their business through improved invoicing accuracy, automated contract renewals, and the ability to offer customized service agreements – all of which are geared to improving their relationships with customers while simultaneously increasing revenues and reducing costs.

Key Takeaways from SFG℠’s 2017 Warranty Chain Management (WCM) Benchmark Survey

[Strategies For Growth℠ (SFG℠) is currently in the process of conducting its 2018 Warranty Chain Management Benchmark Survey Update. The survey will remain “live” until the end of the first week of February; and the topline results will be presented – for the first time – at the 2018 Warranty Chain Management (WCM) Conference to be held, March 6 – 8, 2018, in San Diego, California.

Please feel free to read the key takeaways from our 2017 WCM Benchmark Survey, below. In the meantime, we invite you to take our 2018 WCM Benchmark Survey Update by clicking on the following link: https://www.surveymonkey.com/r/2018_SFG-WCM]

The key takeaways from SFG℠’s 2017 Warranty Chain Management (WCM) Benchmark Survey are:

  • Roughly half (49%) of the warranty management community has either implemented a new, or upgraded their existing, warranty management solutions in the past three years or less
  • More than three-quarters (77%) of current warranty management processes are at least partially automated; however one-in-six (15%) are still entirely manual
  • Organizations with “new” warranty management implementations have realized significantly greater performance improvements than all other categories of respondents with respect to warranty claims processing time and supplier/vendor recovery (as a percent of total warranty expense)
  • Warranty management organizations are being driven, first, by Customer-focused factors; second, by Product Quality-focused factors; and third, by Cost/Revenue-focused factors
  • The most significant challenges currently faced by warranty services managers are identifying the root causes of product failures, followed by product quality issues and claims processing time and accuracy
  • Currently, as well as in the next 12 months, warranty services managers are focusing primarily on developing and/or improving their KPIs and warranty analytics programs, fostering a closer working collaboration between product design and service, and instituting/enforcing process workflow improvements for supplier cost recovery
  • The top uses of data/information collected from warranty-related events are basically to improve processes (i.e., field service, depot repair, parts returns, etc.), and effect changes (i.e., product design, manufacturing, etc.)
  • Customer satisfaction and warranty management-related costs are the top two categories of KPIs used by warranty services management organizations, followed by warranty costs, per product
  • The 2017 warranty management survey results reflect slight to modest declines in year-over-year performance, except for those organizations that have implemented a “new” (to them) warranty management solution in the last three years or less
  • While the overall survey results seemingly portray a fairly high level of warranty management performance across all respondent segments, there are many – in fact, too many – individual organizations that are not performing anywhere near as well (i.e., 25% to almost 50% of survey respondent organizations)

Historically, the primary factors cited as driving the warranty management community to improve its operational efficiencies and overall performance have essentially been customer-driven; that is, with a focus primarily on meeting – and exceeding – customer expectations for returns processing, claims processing time, replacement units and the like. However, the economic bust of the past decade changed the way warranty management organizations think by also placing increased emphasis on warranty costs and related issues. Still, the number one factor, overall, is to meet their obligations with respect to keeping their customers satisfied.

The bottom line for 2017 and beyond is that organizations that have implemented new (or at least upgraded) warranty management solutions are experiencing significantly better performance ratings for key metrics including warranty claims processing time, cost recovery from suppliers/vendors and, ultimately, both customer satisfaction and their respective financial KPIs.

There is no mistake – if your organization finds itself behind the curve with respect to (1) the automation of its existing warranty management processes (or lack thereof); (2) its ability to meet (if not exceed) its customers’ demands or requirements; (3) its ability to recover costs from its suppliers/vendors; or (4) dealing with the costs associated with running its warranty management operations; this gap will likely only get larger over time – unless it considers implementing a new warranty management solution. The 2017 survey results clearly show the impact that doing so will have on the organization – and its bottom line.

The leading warranty management organizations (i.e., those that have already attained, or are poised to attain best practices status) are doing so mainly by taking steps to:

  • Automate their existing manual or partially automated processes
  • Develop and/or improve the KPIs they use to measure their performance over time
  • Foster closer working collaboration between product design and service
  • Institute/enforce process workflow improvements for supplier recovery
  • Streamline overall operations
  • Streamline parts return processes to improve overall efficiency
  • Restructure for improved warranty management oversight and accountability
  • Purchase and/or upgrade to an fully automated warranty chain management solution

The survey results clearly show that the gains made in performance improvement among those organizations that have implemented a “new” warranty management solution in the past three years or less have been substantial, essentially making the case that the most effective means for driving performance improvements is via the automation and integration of all key warranty management functions, facilitated through the implementation of a state-of-the-art, warranty management solution.

[Don’t forget to take our 2018 Survey! https://www.surveymonkey.com/r/2018_SFG-WCM]