Lessons Learned from WBR’s 2019 Field Service Palm Springs Conference – How FSM Solution Vendors & FSOs Are Advancing Service Together

[WBR’s annual Field Service Palm Springs conference is the premier Field Services event of the year – and this year was no exception! More than 850 field service professionals attended the conference during the last week of April, 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.”

The main theme for WBR’s 2019 Field Service Palm Springs conference was billed as “Advancing Service Together” – 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.

In fact, there appeared to be more focus on the importance of attaining high levels of employee satisfaction and retention (and their linkages to customer satisfaction and retention) in the 2019 Palm Springs conference than in any of the past WBR Field Service events in recent memory.

“What struck me most about this year’s Field Service Palm Springs event is the overall progress of the industry – it was far more conversational this year among service executives. Rather than a few innovative leaders speaking up and the majority of attendees listening and learning, there was far more collaboration. It was clear to me that we’ve moved beyond an advanced few tackling the service evolution to now everyone being somewhere along the journey. This made for a far more engaging dialogue among attendees, presenters, and the vendor community.”

– Sarah Nicastro, Field Service Evangelist
Future of Field Service

Each of the two Main Days of the conference had a particular focus, beginning with Day One setting its sights on “Leveraging IoT, Big Data, and AI To Move Towards Preemptive Service And Achieve Customer Business Outcomes”; and Day Two focusing on “Increasing Revenue With New Service Offerings And Knowing What Your Customer Wants.”

Overall, WBR’s 2019 Field Service Palm Springs 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 hot – but so were the topics that were covered at the conference. One of the key points that I made as part of my Track A opening remarks was 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.

“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 Amelia Island later this year, and in Palm Springs again next year!

[To download a complementary copy of the full “Lessons Learned …” report, simply click here: @@@ 2019 Field Service Palm Springs Analysts Take Report.]

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Bill Pollock’s Responses to Field Service News’ 2019 Big Discussion Questions

[This is the companion piece to Field Service News’ 2019 “Big Discussion”, published in four parts in its digital magazine. This Blog contains the full text of my responses to Associate Editor, Mark Glover’s four questions. Please visit the FSN Website to view my edited responses, along with those of other services industry experts, at: https://www.fieldservicenews.com/blog/the-big-discussion-what-challenges-opportunities-and-trends-should-we-expect-in-2019-part-1.]

FSN – Across the last twelve months what do you think has been the biggest shift in how we approach field service delivery? 

Pollock – The last 12 months have been quite a bit more active among global Field Services Organisations (FSOs) with respect to their acquisition and implementation of new technologies. For example, after having spent a number of years more as a perennial line item on an organisation’s “wish list”, Augmented Reality (AR) has gained a much wider acceptance, and is presently in use by more than twice as many FSOs as just a year earlier. In fact, the trend lines for AR adoption are have begun to increase at an accelerating rate. We are now also seeing the further incorporation of Artificial Intelligence (AI) and Machine Learning into existing FSM systems. As a result, many FSOs have already begun the transformation from the traditional break/fix model to the use of predictive diagnostics and AI-powered chatbots to facilitate and expedite service delivery.

FSN – IoT has become an increasingly key discussion amongst field service companies in recent years – do you think it will soon be essential for field service companies to embrace IoT?

Pollock – I believe it is already essential for field service companies to embrace the IoT. That ship has already sailed – and those FSOs that run their services operations on an IoT platform are already beginning to see the return on their investment. The enormous amount – and wealth – of data that is now being generated through the use of an IoT platform is turning many of the traditional ways of thinking upside-down. For example, it has created an environment where the “old” (i.e., last year’s) way of measuring performance is becoming almost instantly outdated. For example, last year, an FSO might have been assessing its service delivery performance on the basis of asset uptime or SLA compliance, etc. However, this year, they may need to gauge their performance viaan entirely “new” set of KPIs! Measuring your performance in providing “power by the hour” or “airplanes in the air” is quite a bit different than measuring on the basis of the number of monthly site visits, PM calls and asset uptime.

FSN – What do you think should be the key areas of focus for field service managers across the next twelve months?

Pollock – The next most important areas of focus for field service managers in the coming 12 months will likely be among the following three items: (1) embracing the “new” technologies to support an expanded and enhanced capability to deliver their respective service offerings. Artificial Intelligence (AI) and Machine Learning have been around for more than 50 years, but are still relatively new to the services segment – but, it’s time to build them into your service operations! (2) Changing the way in which you deliver – and price – your service offerings. Traditional break/fix service is essentially “dead”. Long live predictive diagnostics and predictive maintenance! Have you spoken to any chat bots lately? Well, you will! (3) Re-engineering the way you measure performance metrics, or KPIs. Mean-Time Between Failures (MTBF) and Mean-Time-to-Repair (MTTR) will not mean anything in an environment where services are being performed remotely on an ongoing basis. It will be time to replace some of the old “tried and true” KPIs with new ones that can measure systemic productivity, rather than merely individual field technician productivity. It’s time to rethink the entire service delivery process – and adjust to it!

FSN – What is the biggest area of concern that field service companies should address in the next 12 months?

Pollock – The biggest area of concern for field service companies in the next 12 months will be, if they’re already somewhat behind the technology curve (or with respect to the competitive landscape), what do they need to do todayto ensure that they will not fall further behind? And, it’s not just a matter of technology either; many FSOs will need to alter their corporate philosophy and mentality as well. Technology goes hand-in-hand with the personnel that use it, so attention must also be given to how the organisation goes about replacing, and/or supplementing, its existing field force with new hires or the use of outside, third-party “feet on the street” support. The services world is evolving so quickly, that any missteps along the way can be devastating – so every step, every move counts. There will also be no time for any intra-mural infighting – only for collaboration and inter-departmental cooperation. Equipment will keep on breaking, and end-of-lifecycles are getting increasingly shorter. As such, there will always be the need for services organisations to deliver their support! However, only those that have the technological and corporate wherewithal to continually improve the way in which they deliver their services will rise to the top of the competitive order – and stay there!

The Global Warranty Services Market Appears to Be Moving Toward a More Expansive Period of Growth in 2019!

[After conducting our fifth annual Warranty Chain Management (WCM) Benchmark Survey in Q3/Q4, 2018, Strategies For Growth℠ has put together a new results package consisting of an Analysts Take paper, a Webinar and a 2019 WCM Conference workshop and presentation on “The State of Warranty Chain Management (WCM) for 2019 – and Beyond!”. The Webinar was hosted by Mize, Inc. on January 17, 2019 at 1 PM EST. However, you can download a copy of the webinar at https://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management. Mize is also distributing copies of the Analysts Take paper at the 2019 WCM Conference in Orlando, FL, March 12 – 14, 2019.

The following is an excerpt from the January 10, 2019 issue of Warranty Week. Read the entire article, including illustrative charts and additional commentary, at Warranty Week.]

The 2019 survey results reflect all of the signals for an expanding market growth over at least the next 12 months, and probably beyond. Nearly two-thirds of respondent organizations are already running their services operations as profit centers with their own P&Ls, and annual warranty-related budgets are expected to increase-over-decline by a ratio of more than three-to-one. This has all of the makings for a fast-growing market.

Further, we are seeing an uptick in the percent of warranty services organizations taking steps to improve their respective planning and forecasting activities, and restructuring, as necessary, for improved warranty management oversight and accountability.

As such, all of the key aspects that can be used to signify both operational and financial improvements seem to be there, leading to an optimistic expectation for accelerated growth in the industry over the next 12 months.

Presently, 63% of respondent organizations manage service as a profit center, keeping pretty much in line with the findings for other related components of the global services industry (e.g., the field services segment, etc.). For many organizations, running services as a profit center allows them to focus more on the processes that may be used to generate higher levels of profitability, which represents one of the three main “clusters” of key factors currently driving the global market.

Warranty Management Organizations Are, Once Again, First and Foremost, Customer-Focused

The respondents to the survey have also once again clearly identified the specific drivers that are pushing them to aspire to the attainment of higher levels of performance. In fact, they have provided responses that solidify that there are still three main “clusters” of factors that drive their respective businesses: Customer-focused, Product Quality-focused and Profit-focused – and in that order.

For example, among the Customer-focused drivers, post-sale customer satisfaction issues (60%, up from 58% in 2018, and only 42% in 2017), the desire to improve customer retention (43%), and customer demand for improved warranty services (40%) remain as the top three drivers with respect to optimizing overall service performance. No other drivers are cited by more than just over one-quarter (28%) of respondents.

The next “cluster” of drivers is Product Quality-focused, and is represented by product defect-related costs (28%) and dealing with inferior/deficient product quality (23%). The third “cluster”, Profit-focused, is represented solely by an internal mandate to drive increased service profitability (23%). As such, the warranty chain management community has made it clear that it is squarely focused on, first, satisfying – and retaining – its customers; second, dedicated to improving product quality-related issues; and third, mandated to drive increased services profitability – again, in that specific order.

These results suggest a continuation of the relative “normalcy” that has characterized the Warranty Chain Management segment over the past several years – that is, a return to focusing on customers, rather than spending most of their time and resources wrestling with cost reductions and other financial issues. Obviously, while financial considerations are still critically important, the industry focus has shifted back, as it always does, squarely on the customer’s needs, requirements, preferences and expectations.

The Greatest Challenges Facing Today’s Warranty Management Initiatives

Aside from the top clusters of customer-, product quality- and profit-focused drivers, warranty services managers are also faced with myriad additional challenges that come from many different areas. The top challenge, as cited by nearly two-thirds (63%) of the survey respondents, is the ability to identify the root cause of product failures. However, nearly half (45%) also cite cost recovery from suppliers as one of their top three challenges. Further, between 28% and 30% of respondents also cite repair management (30%), claims processing time and accuracy (30%), and sale of extended warranties (28%) as significant challenges as well.

Based on the 2019 survey results, the greatest challenges facing warranty services managers today align closely with the key market drivers, as well as with the current and planned strategic actions to be taken. As a result, these data continue to reflect an environment where overall improvements are likely to transpire in the next 12 months, thereby leading to higher levels of customer satisfaction and the further stimulation of financial growth for the segment.

Analysts Take on the Global WCM Community

However, building upon the survey findings from previous years, only a small majority of warranty managers (57%) report that they are satisfied with their company’s warranty claims processing time – and only 22% are “extremely satisfied”. Although these percents represent a significant increase over previous years’ surveys, there are still more than one-in-five (22%) that are currently “somewhat dissatisfied” with their company’s warranty claims processing time performance.

Ashok Kartham, founder & CEO of Mize, concurs adding that “the companies can achieve the key goals of improving customer satisfaction and profitability of service business by connecting all stakeholders and processes in warranty and service contracts. Companies need to connect with customers directly to improve self-service and grow service contract sales. Service technicians need to be enabled to make better diagnostic and repair decisions upfront. Supplier collaboration needs to be improved to drive product quality. Companies can move beyond claims processing to drive customer satisfaction and grow additional revenues from innovative service offerings.”

Kartham further explains that “the warranty industry is facing significant challenges and opportunities with increased customer expectations for product uptime and predictive maintenance. The Mize Connected Customer Experience platform, and Warranty Management solution, enable companies to transform warranty to be a profit center. We are excited to bring the industry benchmarking and best practices to help companies optimize the entire warranty lifecycle and maximize the customer lifetime value.”

[Again, to download a copy of the Webinar, or to obtain a copy of the companion Analysts Take paper, simply click herehttps://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management.]

Questions to Ask Yourself About Quality

All businesses want to provide quality products and services, but not every business manager knows exactly how to define quality, or even where to get started. While there is no single best way to build a quality program, or to go about implementing one, there are a number of questions that, once addressed, can at least help to set your business out on the right path.

The 10 basic questions that any services manager should be asking, and a corresponding set of guidelines for addressing each of them, may include:

 1.  How do our customers define quality? What do we need to do to convince them that we have embraced the quality initiative?

Merely embracing a quality initiative may not be as well received in the services marketplace if you have not defined the key elements of quality in the same manner as your customers. For example, if your customers define quality as “delivering services faster”, but your quality program is designed to help you “deliver services better”, you will not be perceived as properly addressing your customers’ primary service quality needs.

2.  How do we know if our organization is ready for quality? How quickly should we move? How soon should we get started?

Whether or not your service organization is ready to embark on a quality program may be irrelevant if your customers think you are already long overdue. You may be undecided; but if it is time, your customers will let you know.

3.  Do we need a separate plan for quality or does it fit in with our overall services business plan? How often do we need to update or revisit our quality plan?

A good quality plan is one that is also part and parcel of your organization’s strategic services marketing plan. A quality plan that is separate from the business plan is typically doomed to failure. Further, quality is an ongoing initiative and not a fixed plan – it requires constant updating and revisiting.

4.  Is there such a thing as too much quality? How far should we go in terms of implementing quality?

There is no such thing as too much of a good thing when you are talking about quality. Rather, the main focus should be on, “Are we implementing the right kind of quality” and not, “Are we offering too much of it?’

5.  How interactive should we allow our customers or vendors to be in terms of participating in our quality program? How far at a distance should we keep these and other outside segments?

Quality must involve all of the organization’s employees, customers and strategic partners. Quality only works if every party participates in it. An “arms length” approach to quality will not be anywhere near as successful.

6.  If our competitors start to implement specific types of quality programs, should we follow them? How important is it to be the first one off the block with a services quality initiative?

Being first is not nearly as important as being best when it comes to quality. Being first does not afford any special marketing benefits either – especially if you can’t deliver. The best quality initiatives are those that “fit” your organization, and not those that mirror what other organizations are doing.

7.  How do we best promote our quality achievements to the marketplace? What can we tell our customers that they don’t already know? What should we tell our non-customers to make them more interested in considering our products and services?

Any achievements you accomplish with respect to quality should be promoted to the marketplace. Digital marketing, Webpage content, marketing collateral, print advertisements, press releases, trade shows and word of mouth are the most widely used means to communicate quality achievements. The only difference between customers and non-customers is that some just happen to be paying you for your products and services. Other than that, they should all be treated in the same manner, and should all be provided with the same positive quality communications.

8.  How well defined does our internal quality initiative have to be? Does it have to extend to all areas of our operations, at all service locations?

We’ve all heard about the chain that is only as strong as its weakest link. The question to ask is, “Are there any of our operational areas where we can afford not to implement quality?” If the answer for any areas of operations is ‘yes’, then perhaps those areas are not worth keeping “as is” anyway.

9.  Can we design, implement, execute and monitor quality on our own, or do we need to seek outside assistance to make it all happen? What types of outside assistance are available?

Your most important mission is running your services business, and not managing quality implementation. However, having a third party manage the entire quality initiative assures that there will be less burden on your part. Accordingly, the best way for ensuring successful quality implementation and maintenance is to focus on what your organization can do best without adversely impacting normal business operations, and using outside assistance where you can gain the greatest advantage.

10.  What are the total costs of implementing quality? What are the total costs of not implementing quality?

The total costs of implementing quality are – well, you can do the math! However, the costs of not implementing quality may range from losing customers and market share, to increasing operating costs and reducing profits, to reducing market potential and continually fighting an uphill battle against more demanding customers and better prepared competitors.

Having all of the answers is not mandatory for implementing a successful quality program. However, asking all of the right questions should get you off to a good start.

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

Using Service Lifecycle Management (SLM) to Support Your Customers While You’re Servicing Their Equipment

[Before you read our latest Blog, why not spend 15 minutes or less taking our latest Field Service Management (FSM) Tracking Survey? This is our fifth FSM Survey since 2011, and we would love to share the results with you once we’re finished with the data processing and analysis – sometime in late March! The survey link is: https://www.surveymonkey.com/r/2019_FSM. And, oh yeah, after you finish, please don’t forget to read our Blog!. Thanks, Bill] 

Every day you deal with a multitude of customers who vary by type, size, installed base, usage, personality and everything else that ultimately differentiates one customer from another. However, one thing always remains constant – their business systems and equipment are critically Important to their day-to-day business operations. Despite this common thread that runs through virtually all of the customers you support, it is still important to recognize that each customer account will likely be different in terms of:

  • The various types, brands, models and numbers of units they have installed at their respective sites;
  • The ages of the individual units that are covered under their various Service Level Agreements (SLAs), or supported via a Time & Materials (T&M) basis;
  • The usage patterns of the equipment at their individual locations (i.e., continuous intermittent use; single vs.multiple shifts; simple vs.complex multifunctional peripheral applications; and so on);
  • The volume, capacity or throughput they regularly execute; and
  • Many other unique and/or specific differentiators.

For some of your customers, their equipment is an integral component of what they do on a day-to-day basis. Customers in all industry segments, whether it be legal, financial, medical, real estate, government, or other highly-demanding markets, will tell you that their systems and equipment are essential to their business operations, and that when their equipment is down, their production is severely affected. For some, even a small piece of connected equipment may be the only means they have for providing their customers with a receipt, order confirmation, or other important transaction-generated documents. In fact, for many in the latter category, their reliance on the equipment you support may be even more critical to them (at least on a relative basis).

Regardless of the specific industry market segment or type of customer, there will always be a basic level of reliance on the business systems and equipment they have installed at their facility. In addition, you will find that your customers will also be relying heavily on your organization to ensure that their equipment is always up and running as required – and as expected. As such, it is important to recognize that in the customer’s mind, if the equipment is not working optimally – regardless of the technology that may have been built into it – it is worthless.

Since there is just so much that the customer is either inclined or permitted to do in order to get the equipment back in working order following a failure, in most cases, your field technicians will be the sole entities that they can count on to make that happen (that is, aside from remote monitoring and diagnostics, etc.). Accordingly, they will need to approach the servicing and support of the equipment with a great deal of professionalism and responsibility. Customers usually do not care whether the cause of an equipment problem is due to a hardware or software failure; a paper jam; or whether it was the unit’s fault, their fault, or nobody’s fault in particular. All they know is that when they needed to use the equipment, it simply did not work.

This is typically where the organization’s field technicians come into the picture. In many cases, they represent the only “real” physical manifestation of the service and support that keeps their equipment up and running – or at the very least, they may represent their first line of service and support defense. Your customers may rely heavily on the equipment itself to support their day-to-day business operations; but they rely even more on your organization and your field technicians to ensure that the equipment can continually do what it is supposed to do.

This is a unique area where most services organizations – and their dealers and distributors – can use some help! The good news is that there is a Service Lifecycle Management (SLM) software solution available for users in every industry, size and geographic coverage segment. The implementation of an SLM solution can provide a comprehensive set of integrated business solutions that empower strategic initiatives while driving tactical execution.

Companies that install, repair, and maintain business systems and equipment can increase their competitive advantage, grow top-line revenue, and bolster bottom-line profitability through the use of an effective SLM solution. Among the basic features and benefits of SLM functionality for a typical Field Services Organization (FSO) may best be summarized as follows:

  • Comprehensive Contract and Service Level Management
  • Service and Sales Integration
  • Increased Help Desk/Contact Center Effectiveness
  • Field Service Efficiencies

Comprehensive Contract and Service Level Management

  • Through SLM, customer contracts and Service Level Agreements (SLAs) can be structured in ways that best fit the business, as well as the businesses of their respective customers. Key items such as maintenance and repair service; preventative (or predictive) maintenance; remote monitoring, diagnostics and repair; and draw-down contracts can all be easily established and managed. As such, the organization’s services management can be assured that all of the obligations of its customers’ SLAs are well-planned for – and met – and that all of its mission-critical commitments to the customer are being honored.

In this way, services revenues are maximized, and there is little risk of experiencing lost revenues. Company representatives can quickly and easily verify both the customer and vendor entitlements, thereby eliminating any costs that might otherwise be associated with providing customers with parts, consumables or services they are not entitled to under the terms and conditions of any existing warranties or contracts. This also ensures that any and all dealer claims will be quickly processed.

Service and Sales Integration

  • The Service and Sales Integration functionality of an SLM software suite can be relied on to enable the manufacturer’s and dealer organizations’ field service technicians and contact center personnel to more thoroughly service the company’s accounts, while also driving increased revenue in the process. By placing intuitive, easy-to-use sales tools into the hands of the appropriate service employees, the number of new opportunities to up-sell and cross-sell equipment, parts and consumables to existing customers will increase multifold.

The organization’s service technicians are out in the field every day talking to, and interfacing with, its customers; why not also provide them with the tools and resources they can use to close – or at least open – additional sales opportunities within this virtually captive customer base!

Increased Help Desk/Contact Center Effectiveness

  • SLM can also allow the organization to increase its call handling efficiencies, especially in the areas of first-call resolution and call avoidance rates. This will ultimately result in the lowering of internal service costs, and commensurate improvements in existing levels of customer satisfaction and retention. In many ways, business systems and equipment services have been somewhat commoditized over the years, and the only way that one services organization (or its dealers) can establishment a competitive advantage over another is to differentiate (i.e., improve) the way in which they support the customer base after the initial sale.

The best way to do this is to provide superior levels of help desk and call center support empowered by a robust SLM capability. By arming your call center personnel with accurate and up-to-date customer and installed equipment base information – be it entitlement, configuration, or marketing campaign data – the organization will be able to greatly increase its ability to sell, cross-sell, and upsell its entire portfolio of products, services, parts and consumables.

Field Service Efficiencies

  • Leveraging the field service automation tools inherent in the SLM software allows the organization to optimize its field force capacity utilization, resulting in significant operational efficiencies as field technicians quickly become empowered to increase revenue generation and recovery. By streamlining and managing the invoice process, billing cycles will be lowered, as will other key areas, such as Day Sales Outstanding (DSO), etc.

These improvements will almost immediately go directly to the bottom line as you will be able to manage your cash flow and receivables much more effectively. Similarly, by streamlining and managing your service inventories (such as trunk stock) more effectively, you will also be able to realize significant inventory cost reductions.

What many OEMs and dealer organizations seek is an end-to-end, enterprise-wide SLM solution that addresses the complete equipment/service lifecycle, from lead generation and sales quotation, to service and billing, through asset retirement. They are looking for a solution that both integrates and optimizes the critical business processes that all services organizations have to face with respect to providing their customers with the levels of service and support they require.

Services organizations that provide their customers with any combination of products, parts, services and consumables must be able to not only fix the customers’ equipment, but to fix the customer as well; however, the ability to do so may vary greatly from one organization to another. However, the most successful organizations will ultimately be the ones that have the right mix of management, personnel, tools, resources and solutions (i.e., Service Lifecycle Management), all working together to provide their customers with the levels of service and support they require – and expect!

The Global Warranty Services Market Appears to Be Moving Toward a More Expansive Period of Growth in 2019!

[After conducting our fifth annual Warranty Chain Management (WCM) Benchmark Survey in Q3/Q4, 2018, Strategies For Growth℠ has put together a new results package consisting of an Analysts Take paper, a Webinar and a 2019 WCM Conference workshop and presentation on “The State of Warranty Chain Management (WCM) for 2019 – and Beyond!”. The Webinar was hosted by Mize, Inc. on January 17, 2019 at 1 PM EST. However, you can download a copy of the webinar at https://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management. Mize is also distributing copies of the Analysts Take paper at the 2019 WCM Conference in Orlando, FL, March 12 – 14, 2019.

The following is an excerpt from the January 10, 2019 issue of Warranty Week. Read the entire article, including illustrative charts and additional commentary, at Warranty Week.]

The 2019 survey results reflect all of the signals for an expanding market growth over at least the next 12 months, and probably beyond. Nearly two-thirds of respondent organizations are already running their services operations as profit centers with their own P&Ls, and annual warranty-related budgets are expected to increase-over-decline by a ratio of more than three-to-one. This has all of the makings for a fast-growing market.

Further, we are seeing an uptick in the percent of warranty services organizations taking steps to improve their respective planning and forecasting activities, and restructuring, as necessary, for improved warranty management oversight and accountability.

As such, all of the key aspects that can be used to signify both operational and financial improvements seem to be there, leading to an optimistic expectation for accelerated growth in the industry over the next 12 months.

Presently, 63% of respondent organizations manage service as a profit center, keeping pretty much in line with the findings for other related components of the global services industry (e.g., the field services segment, etc.). For many organizations, running services as a profit center allows them to focus more on the processes that may be used to generate higher levels of profitability, which represents one of the three main “clusters” of key factors currently driving the global market.

Warranty Management Organizations Are, Once Again, First and Foremost, Customer-Focused

The respondents to the survey have also once again clearly identified the specific drivers that are pushing them to aspire to the attainment of higher levels of performance. In fact, they have provided responses that solidify that there are still three main “clusters” of factors that drive their respective businesses: Customer-focused, Product Quality-focused and Profit-focused – and in that order.

For example, among the Customer-focused drivers, post-sale customer satisfaction issues (60%, up from 58% in 2018, and only 42% in 2017), the desire to improve customer retention (43%), and customer demand for improved warranty services (40%) remain as the top three drivers with respect to optimizing overall service performance. No other drivers are cited by more than just over one-quarter (28%) of respondents.

The next “cluster” of drivers is Product Quality-focused, and is represented by product defect-related costs (28%) and dealing with inferior/deficient product quality (23%). The third “cluster”, Profit-focused, is represented solely by an internal mandate to drive increased service profitability (23%). As such, the warranty chain management community has made it clear that it is squarely focused on, first, satisfying – and retaining – its customers; second, dedicated to improving product quality-related issues; and third, mandated to drive increased services profitability – again, in that specific order.

These results suggest a continuation of the relative “normalcy” that has characterized the Warranty Chain Management segment over the past several years – that is, a return to focusing on customers, rather than spending most of their time and resources wrestling with cost reductions and other financial issues. Obviously, while financial considerations are still critically important, the industry focus has shifted back, as it always does, squarely on the customer’s needs, requirements, preferences and expectations.

The Greatest Challenges Facing Today’s Warranty Management Initiatives

Aside from the top clusters of customer-, product quality- and profit-focused drivers, warranty services managers are also faced with myriad additional challenges that come from many different areas. The top challenge, as cited by nearly two-thirds (63%) of the survey respondents, is the ability to identify the root cause of product failures. However, nearly half (45%) also cite cost recovery from suppliers as one of their top three challenges. Further, between 28% and 30% of respondents also cite repair management (30%), claims processing time and accuracy (30%), and sale of extended warranties (28%) as significant challenges as well.

Based on the 2019 survey results, the greatest challenges facing warranty services managers today align closely with the key market drivers, as well as with the current and planned strategic actions to be taken. As a result, these data continue to reflect an environment where overall improvements are likely to transpire in the next 12 months, thereby leading to higher levels of customer satisfaction and the further stimulation of financial growth for the segment.

Analysts Take on the Global WCM Community

However, building upon the survey findings from previous years, only a small majority of warranty managers (57%) report that they are satisfied with their company’s warranty claims processing time – and only 22% are “extremely satisfied”. Although these percents represent a significant increase over previous years’ surveys, there are still more than one-in-five (22%) that are currently “somewhat dissatisfied” with their company’s warranty claims processing time performance.

Ashok Kartham, founder & CEO of Mize, concurs adding that “the companies can achieve the key goals of improving customer satisfaction and profitability of service business by connecting all stakeholders and processes in warranty and service contracts. Companies need to connect with customers directly to improve self-service and grow service contract sales. Service technicians need to be enabled to make better diagnostic and repair decisions upfront. Supplier collaboration needs to be improved to drive product quality. Companies can move beyond claims processing to drive customer satisfaction and grow additional revenues from innovative service offerings.”

Kartham further explains that “the warranty industry is facing significant challenges and opportunities with increased customer expectations for product uptime and predictive maintenance. The Mize Connected Customer Experience platform, and Warranty Management solution, enable companies to transform warranty to be a profit center. We are excited to bring the industry benchmarking and best practices to help companies optimize the entire warranty lifecycle and maximize the customer lifetime value.”

[Again, to download a copy of the Webinar, or to obtain a copy of the companion Analysts Take paper, simply click herehttps://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management.]