AUTHOR ARCHIVES: Kris Oldland

In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

The first question of this topic was "Just how big is the potential impact of IoT on Field Service?"  whilst the second answered was "Is IoT now making the shift from early adoption to mass adoption amongst field service companies?" and last week the questions was "What are the challenges of implementing an IoT strategy within field service operation?

And now the final question on this topic

 

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Question Four: Are field service companies who are not adopting IoT at risk of becoming non- competitive?

The urgency around IoT adoption varies from one vertical industry to the next, but the cost of service delivery and need for greater visibility are universal concerns. The old business adage “you manage what you measure” certainly applies.

If your competitors have a level of insight that enables them to increase the number of jobs per technician per day or reduce critical failures by 90% thanks to preventative measure, the business benefits are powerful and quantifiable.

Increased efficiency and productivity, and slashing the cost of missed SLA penalties, that has direct impact on customer satisfaction and profitability. IoT can deliver exactly these types of insights and business outcomes, and only service organisations that invest in IoT capabilities will reap these rewards.

 

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In a word, yes. This is much more than just a ‘nice to have’ scenario. In most industries, margins are too thin and competition is too fierce to simply guesstimate how much capacity a piece of equipment can cope with, and it seems positively archaic to run a reactive break/fix service mentality in today’s connected age.

Industrial downtime is no joke. Unplanned downtime in just about every industry has a significant impact.

The Aberdeen Group last year reported that the cost of downtime across industries went up to $260,000 per hour on average between 2014 and 2016. That’s a huge jump with a considerable hit on any business.

On top of that, most companies don’t know how best to optimise uptime availability in different conditions, such as managing volatility, meeting peak demand or managing performance in extreme conditions. If your competitors are addressing this problem and you’re not, you’re surrendering market share. Digital disruption is set to wipe out 40% of the Fortune 500 companies in the next 10 years and the Industrial Internet will play a big part in that disruption, as well as the survival and success of companies.

The question isn’t why would you, but rather why wouldn’t you?

 

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Definitely!

The potential gains in cost efficiency and improved service offerings are tremendous. IoT has the potential to disrupt entire industries. Organisations that aren’t educating themselves on the potential, road mapping an IoT strategy, or structuring their organisation to be IoT-ready may not see the risk now but they will definitely be laggards in 5-10 years.

IDC predicts that the installed base of IoT endpoints will grow to more than 30 billion by the end of the decade from just less than 13 billion units in 2015.

As a consequence, machine-generated data will comprise an increasing share of stored data: by 2020, 10 percent of the 44 zettabyte digital universe will originate from IoT devices.

In five years, there will be seven times more IoT data than there is today.

 

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Look out of the next topic in our Big Discussion series coming soon... 

 

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There has been considerable Mergers and Acquisitions activity amongst field service management solution providers across the last eighteen months. At the same time we have seen a rapid rise in the adoption of servitization based business models, which has driven a move away from traditional break-fix SLA based maintenance contracts to contracts based around guarantees of uptime and availability.

Does this provide both the opportunity and the need for the development of new breed of field based platforms - the Service ERP? Kris Oldland, FSN Editor-in-Chief, reports...

For as long as there has been Field Service Management (FSM) Solutions there has always been a conversation around how well a solution integrates with other key business systems in the B2B world it has largely been about connecting through an ERP system, in B2C the same conversation was centred around bolting on a field service solution onto a CRM.

Indeed for many years use of a dedicated FSM system could be avoided entirely either by some clever and hugely laborious recoding of the functionality of an existing tool such as SAP or Oracle for example, or alternatively some equally ingenious means of reworking existing processes and relabelling existing form fields to find a semi-workable solution.

Something a bit W Heath-Robinson that could involved going from 'a' to 'j' via 'e' all just to get to 'b', but something that kind of did the job.

 

However, with the advent of Cloud computing and the democratising impact of the emergence of the SaaS revenue model we have seen a far greater and more widespread adoption of FSM systems from companies of all sizes in all sectors.

In turn, this increased use of FSM systems has driven further product development and feature enhancements in what is a relatively small but Undoubtedly fiercely competitive sector.

Meanwhile, we have also seen service, and in particular field service rise in importance amongst the executive boards in all areas as the world begins to adapt to the twenty first century and it’s service centric, on-demand driven business models. Uber and Amazon are thrown around constantly as examples of best practice (even though the former have yet to break even apparently) in today’s data driven world, and are very much tools of their time.

Closer to home within FSM systems, indeed the gig-economy is one of a number of new twenty first century additions to the field service equation - as are challenges of an ageing workforce, dealing with a customer base more empowered and more vocal (via the joy of social media) than ever before, plus the emergence of game changing technology such as IoT and Augmented Reality.

With the investment in solutions at an all time high, we are seeing an emerging race to become the dominate platform for the increasingly lucrative and important field service sector begin to heat up with a series of FSM providers including IFS, ServicePower, ServiceMax, ClickSoftware and Telogis all being acquired - and the story in the large part is very much the same from each of them - the investment is intended to help them get to their technology (and sales and marketing) ready to take a podium finish.

This of course is driving development in terms of technology, further and faster than ever before.

Indeed, functionality within FSM systems has now become widespread and diverse that the standard terminology is shifting to a full ‘end-to-end’ platforms. Solutions that not only include field service management elements such as scheduling and job reporting but also incorporate wider spectrums such as parts and inventory management, asset management and reverse logistics Have we finally reached a point where we can see the solutions that are essentially today’s FSM systems ready to step out of the shadows of their business software cousins CRM and ERP and stand shoulder to shoulder with them as an equally valid business system?

 

With all the investment in the FSM sector are we reaching a point where FSM systems will no longer be just a humble add on for ERP but a mission critical service and business delivery platform within it’s own right. You use your ERP for product-based activities you FSM system for all service and aftermarket related activities with a CRM, and financial package sitting across the perhaps? Of course, the likes of Gartner and other such important acronym makers would argue (and they’d have a point to be fair) that such a system would be probably a bit more than FSM so we would need a new bunch of letters to put together.

My humble suggestion would be Service ERP (sERP) but this may cause confusion with those pesky marketeer types and their Search Engine Results Pages (hence why I went with a small s at the front), but quite frankly other than needing something to refer to in this article, I’ll let the real industry makers work that one out.

The important thing is the concept - which I genuinely think is the logical conclusion of all this talk around FSM platforms.

We are at a level now with integration and cloud technology, where things just talk to each other naturally, or at least they are supposed to and that is definitely the path we’re heading down.

 

With this in mind, I believe the route we are heading down will lead us to a point where companies will look at their mix of business systems and say OK my ERP is SAP (for example) and that handles my production and manufacturing side of a business.

And then my sERP/FSM system - which includes scheduling, a mobile piece (including Augmented Reality), customer management (including CSAT and other customer engagement pieces), parts management, reverse logistics, asset management (including IoT connectivity) and anything and everything else required for running the service and aftermarket side of the business - is in place to run that part of our operations.

Essentially, for a company that only offers third party service, the sERP platform could be all they need as long as it included a light CRM embedded in there as well.

From a field service management perspective there has always been a feeling that FSM has always been the bridesmaid and would never be the bride, that we would always be the slightly poorer relations feeding off the table crumbs of our close, yet infinitely more important cousins in the ERP and CRM world.

But given the rising growth in importance of service in the global business ecosystem, given the amount of Tier A companies shifting their business models, at least in part, to a servitized business model where delivery of uptime replaces traditional break-fix SLAs and sloppy service will result in direct loss of revenue – it is of little surprise that those companies offering the tools to ensure that service is delivered as efficiently and productively as possible have become a major focus for investment of late.

As mentioned above FSM is rapidly gaining in recognition as an important tool within the business software ecosystem, the question is just where will that rise to prominence end – so is the prospect of FSM ultimately being the opposite side of the coin to ERP likely?

Or is it just a short-term bubble as the world realigns itself to a more service orientated future and the major ERP players re-interpret their platforms to add more attention and focus to service related activities and how to optimise those into their own mix?

 

I recently discussed this conversation at length with Marne Martin, CEO of ServicePower, one of the key organisations within the FSM sector that have recently attracted significant Private Equity investment.

It is interesting to note that as with the private equity investment in both ClickSoftware and IFS, the intention does not appear to either asset strip the technology and look for a quick buck or prime the business for a bigger sale in the near future - which is so often the case of such investments. In fact, in all three cases it seems that the goal is to plough further resources into R&D and marketing to help each respective company flourish. In the case of ServicePower it is very much a case of a boost in resources to help meet what Martin sees as their own longer term vision a lot quicker than they could have done so organically.

Indeed, Martin’s comments on the matter are almost an exact echo of what Paul Massey Managing Director, IFS and Dave Yarnold, CEO, ServiceMax told me when I spoke to them both about the recent investments within their own businesses.

Yes, the cynic in me might see the similar sound bites as nothing more than holding up a business-as-normal-here flag to allay any customer fears and perhaps even more importantly those of prospective customers. Yet, I don’t think that is the case. At the last IFS world conference, Massey (and indeed CEO Alastair Sorbie) made a big point about Field Service being one of the top three priorities for the business in the wake of investment from EQT, given they are an ERP provider with a lot of other areas of focus within their business, this in itself was a significant endorsement of the vibrancy of the sector.

Similarly, when speaking with Yarnold about why GE Digital was the right home for ServiceMax, the conversation was very much focussed around how having access to both the technology of the Predix platform but also importantly the brand power of GE to open doors at the C-Suite level of enterprise, was a significant factor.

Close to a Billion $USD will certainly be part of the reason GE Digital were able to bring the market leader of an increasingly important technology market into their fold, but one also suspects that the opportunity for Yarnold to further expand his vision and ambition for the system he and two others launched in California just over a decade ago was another fundamental element to why GE Digital was the right destination.

Indeed he even commented at the “I didn’t just want to see us end up as part of another CRM/ERP system”.

So did Martin agree with my assertions that FSM would become equally as powerful and important as CRM and ERP in the future?

“I believe so, but with a few caveats” she replied

“If you think about what a CRM does, in it’s most basic, a lot of CRMs are structured around loading in your customer data, their buying patterns, and their contacts – so if you have sales people that churn then you have all that data still. At it’s most simplistic that is what a CRM covers at the basic level. That is pretty straight forward. And if they want all of the other functionalities of a more robust CRM provider then they can pay for it from one of the million and one CRM providers.”

“It’s the same as when you think of a typical ERP - a lot of that is built around finance and accounting packages there’s a million good finance and accounting packages out there and we’re not trying to become a finance - what we are interested in is the use cases around a mobile worker.”

“Give the mobile worker the tools to do everything they need to do in their business. So that they can access what they need to know about the customer, about the asset, where parts are, what they need to do on the  service contracts and so on.”

“The potential for a lot of this to be completed within a standalone FSM platform – that incorporates the spare parts management, warranty management, service sales CRM alongside the more traditional aspects of FSM such as scheduling and parts management etc is certainly there.”

 

Of course, one of the big shifts that we have seen in recent years is the power of data to transform the way we operationalise our business as Business Intelligence platforms powered by the Cloud, IoT and Big Data give field service organisations greater visibility into both their customers and their own operations more than ever before.

At large we are seeing a seismic shift in how field service is measured, both in terms of operational and success metrics.

“That’s very true.” Martin agreed when I put this point to her.

“The field service industry really is in a state of evolution. It’s on the verge of transforming itself into both a customer centric focus looking to bring the power of customer relationship management into the field, while also incorporating technology around machine learning, Internet of Things, and more actionable insights from data.”

“That’s also what is attracting so much acquisition activity. To get to the next level, any business with field based resources must invest in technology and business process consulting to move forward. Mobile workforce management is key to any organisation performing activities away from a plant or office.”

“We are still seeing companies at differing levels of business or use case complexity, some still moving from paper or less sophisticated platforms and others ready to move beyond their current technology to the next level technology in order to incorporate actionable insights and efficiencies from emerging technologies like wearables and IoT, the power of big data, and machine learning are also now realities. Whereas in the past they were nebulous concepts, their ability to be incorporated into mobile workforce software is reality today.”

Perhaps at the heart of the current spate of rapid development within our sector is the fact that all of these emerging technologies can be combined to solve traditional challenges. Whilst they can bring value to service operations by themselves it is when harnessed together alongside existing technologies that we are seeing true leaps forward.

“Each [technology] can be used in conjunction with products like ours to improve productivity, and reduce schedule costs, improving the overall operational metrics, and of course the power of cloud computing is what enables all this to be provided with greater flexibility and value to the customer,” adds Martin.

 

But as we mentioned earlier there is a whiff of chicken and egg in the question as to whether business models are driving a need for improved technology or vice versa. Martin also recognises this fact.

“It is key to recognise that the shift isn’t only about technology adoption, the industry is moving quickly towards a more consumer-centric model where the customer experience is the overriding measure of success,” she explains.

“KPIs like schedule adherence and mean time to schedule continue to be indicative of customer satisfaction, however, up-time, customer value, and propensity to purchase additional services are emerging as more dominant, and are increasingly where focus and resources are applied, to improve profitability.”

“Customer relationship management is about more than getting your sales people to sell to your accounts. It has to be about how you delight the customer after the purchase of the equipment or service contract so that they stay with you, and come back for more.”

“We have also seen so much investment into call centre technology, but in reality, customers don’t want to talk to a call centre if they don’t have to. So technologies which improve the experience, like self-service customer portals which offer the ability to book real time appointments, monitor status, and interact with scheduled mobile workers before and during the visit, integrated knowledge management, machine learning, and actionable insights are what drive additional or longer term revenue, driving profitability. Customer satisfaction and profitability are the new reality for field service organisations.”

So the billion dollar question for Martin and her peers in the industry is has FSM become about more than just field service now? So where does she see the industry moving now?

Indeed, where are ServicePower heading now?

“As I said, to get to the next level, any business with resources that travel beyond a given plant or office must invest in technology to move towards improved profitability and efficiency. An integrated platform is also necessary in order to not run a business in silos, but actually with the greatest intelligence related to maximising the overall performance,” she replied.

As Adam Smith said, it is about labour, capital – and now technology. Staff, parts (if applicable), and technology all need to work together for a common goal. This is also why mobile workforce technology should be on top of mind for the C-suite. CRM and ERP technology isn’t enough to have a great performing organisation if you have workers in the field”

“Mobile workforce management technology therefore isn’t only for organisations which offer field service, traditionally thought of as repair or maintenance. Any mobile worker’s productivity can be improved, the customer experience can be improved, while those traditional metrics like cost and mean time to schedule can be improved at the same time.”

“What I see often is that not only does technology have a role to play, but also equally critically, companies must be looking at business and field processes, and how to use the data within an organisation to agree actionable insights.”

“By that definition, the addressable market for mobile workforce technology expands exponentially, including any organisation with feet on the street. Consider the Salesforce ecosystem. Salesforce users range from traditional wrench turners, to home healthcare, sale forces offered by big box home retailers, pharmaceutical reps, to financial planners, government, and housing and facilities. The list of businesses which rely on people delivering ‘services’ in the field is enormous and expanding.”

 

“Mobile workforce management can be used in every one of those verticals to improve the service delivery process, improve operational metrics and delight the customer, which in turn drives additional revenue. It also when applied with the customer facing technologies as well, can bring the power of the CRM to the customer you want to retain and make another investment in your equipment or services after the point of sale. Only mobile workforce management takes your brand and your people to your current customers in a way that CRM and ERP does not.”

In conclusion she adds the final statement “The opportunity for our market is exponential.”

And I wholeheartedly concur with her on this.

We may see a few new acronyms pop up in the next few years but the future of FSM, in whatever new guise it may take, looks to be in a good place.

 

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Resource Type: eBook
Published by:  Trimble
Title: A Connected World: Field Service Insight Report

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Want to know more? Access to this resource is available to Field Service News subscribers only - but if you are a Field Service Professional you may qualify for a complimentary industry practitioner subscription!

Click here to apply for your subscription now and we’ll send you this white paper to your inbox now instantly as a thank you for your time!

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Synopsis:

Having been amongst its earliest adopters, field service organisations are well aware of the role that connectivity has in their everyday operations.

By the nature of field service a wide range of elements come into play and the difference between what makes a great working day or a poor one, are all too often to do with how these components are connected.

Overview

The eBook focusses on four key areas in which the connected world is impacting field service delivery - Connected Operations, Connected Customers, Connected Workforce, and Connected Intelligence.

Connected Operations:

The success of a field service organisation hinges on getting all parts of the organisation – the back office, the mobile workforce, the fleet management and billing and finance – working together.

Field service technologies have a critical role to play in connecting the many elements involved in the operations across the organisation and the eBook explores how the connected operation could look, not in the future but today.

Connected Customers:

Customer service is widely recognised as being the number one business priority with a proven link between customer satisfaction, retention and profitability.

Aberdeen Group report that organisations that reached a 90 percent plus customer satisfaction rate achieved an annual 6.1 percent increase in service, 3.7 percent growth in overall revenue and an 89 percent level of customer retention

Connected Workforce:

Mobile technology isn’t just changing service; it’s changing the technician as well. No longer just someone who can install or make repairs, a field technician is also a knowledgeable and trusted advisor.

With so much information at their fingertips, technicians can do their jobs more efficiently, resulting in an enhanced customer experience Field service leaders report that implementing a mobile strategy provided an 18 percent increase in service visits per technician and a 40 percent increase in service revenue contribution per technician.

Connected Intelligence:

Field service organisations are characterised by complex workflows and interdependencies which call for a sophisticated approach to measuring the KPIs that go across all aspects of their operation.

Our research shows that nearly 30 percent of field service managers believe that their organisation is ineffective at using the data they collect and just 1 in 5 believes they get the information they need from field service data to help do their job.

This conflict is a major issue facing all too many field service organisations – there is a wealth of business intelligence available to them but making use of it is seen to be an overwhelming, almost impossible, task.

Processing the volume and speed at which ‘Big Data’ is gathered and turning it into useable information is a major challenge.

 

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Want to know more? Access to this resource is available to Field Service News subscribers only - but if you are a Field Service Professional you may qualify for a complimentary industry practitioner subscription!

Click here to apply for your subscription now and we’ll send you this white paper to your inbox now instantly as a thank you for your time!

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IFS, the global enterprise applications company, today announces it has completed the acquisition of mplsystems Limited and Field Service Management Limited.

mplsystems Limited is a provider of omni-channel contact center and customer engagement software that, together with IFS’s leading Service Management offering, provides a complete end-to-end customer engagement solution. Field Service Management Limited, an implementation specialist of Field Service Management solutions in the UK and Ireland will bolster IFS’s Service Management sales, consulting, and support organisation in the region.

UK-based mplsystems Limited develops and implements omni-channel contact center and field service management solutions at some of the UK’s most well respected brands, including: Babcock International, HomeServe, Ecomaster, ENGIE, and Iceland. The company is recognised as a Visionary by Gartner in its Magic Quadrant for Contact Center as a Service for Western Europe (published 24 October 2016) and a Niche Player in its Magic Quadrant for the CRM Customer Engagement Center (published 8 May 2017), primarily thanks to its investment in innovation that has resulted in a flexible, integrated and easy-to-use contact center management platform.

Field Service Management Limited is a UK based implementation partner of IFS in the UK and Ireland. Its expert team of Service Management consultants will join IFS’s UK operation in order to drive further growth in the region. To date, Field Service Management Limited has supported IFS with some of the largest service management implementations in the UK.

 

Commenting on the acquisitions, Fredrik vom Hofe, Group Senior Vice President for Business Development at IFS said “IFS is already recognised as a global leader in the Service Management sector, which we are extending further with these two acquisitions. The opportunity resulting from the acquisition of mplsystems will mean that businesses around the world who want to deliver the best customer service from the moment a customer makes an enquiry through to an issue being resolved, now have the most complete and connected service management proposition available on the market’.

Paul White, CEO of mplsystems Limited, stated “The team at mplsystems is delighted to be joining forces with IFS. We now have a great opportunity to take our award winning omni-channel and customer engagement solutions onto the world stage”.

Alex Stratis, research analyst at IDC, commented: “IFS is not only extending but also strengthening its Service Management proposition with the acquisition of mplsystems. The combination of IFS’s existing capabilities in managing field service with mplsystems’ ability to connect to service recipients via contact center, web, text, and mobile interfaces means customer engagement can be managed in a more integrated way. Both companies share similar values in innovation and a customer centric mindset which is important for the businesses to effectively integrate.”

 

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Kris Oldland, Editor-in-Chief, Field Service News talks to Simon Spriggs, Eagle Field Service about whether Field Service Management Software has become sophisticated enough to work as a standalone entity away from ERP and CRM systems for some organisations...

 

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With the topic of Servitization gaining more and more traction both in manufacturing circles and beyond a new industry book that provides a roadmap to making the shift towards advanced, outcome based services could well be of vital use for service executives across the globe. One such book Service Strategy in Action has just been published and Kris Oldland spoke exclusively to co-author Christian Kowalkowski...

I’ve met with Kowalkowski a number of times over the last few years.

More often than not it is at the Spring Servitization Conference, arranged by the Aston Centre for Servitization, (who themselves are part of Aston University,) which in itself is an interesting few days as it brings the universes of industry and academia together and there seem to be more and more people in attendance from both sides of the table each year.

Indeed, this should come as little surprise to anyone who has attended any field service oriented conference across the last few years. Servitization, arguably driven by the growing maturity of IoT, has become a mainstream topic within our industry and academics such as Aston’s own Professor Tim Baines, or Cambridge University’s Andy Neely - are both highly sought after for speaking engagements on the topic.

So given the rise in interest in Servitization, it is perhaps something of an anomaly that there are so few books dedicated to the topic. There is Baines’ own offering written with Cranfield’s Howard Lightfoot, 'Made to Serve' that is generally regarded as the go to book on the topic. Then there is Dr. Michael Provost’s excellent work ‘Everything Work’s Wonderfully’ but there is not a huge amount else.

At least until now.

Kowalkowski's new book Service Strategy in Action, co-written by Wolfgang Ulaga , is in many ways perhaps a natural sequel to Baines’ & Lightfoot’s Made to Serve, which although still superbly relevant to anyone wanting to understand the topic of servitization - is now approaching it’s fifth birthday.

And while the philosophy and concept remains the same, the conversation has evolved considerably within that period.

So how does Kowalkowski view the book?

“It is really written with executives in mind,” he explains “for business managers as well as service development consultants who are focussing on these issues. What we wanted to do was come up with a really simple road map for service strategy in action, divided into twelve distinct steps - so dependent on how mature the company is when they start, they can pick up the roadmap at the right point for their organisation.”

 

Indeed, the book certainly has the well ordered structure of a manual or how-to-guide. However, given the heavy weight nature of the content this not only makes absolute sense but is probably essential for it to be easily digested as a whole.

Kowalkowski himself, is a softly spoken and quietly intense academic with a clear passion and dedication to his topic and this also flows into his written work. Without, the roadmap structure, there could have been a danger that this book could’ve become a book for academics, that lay-folk like myself (and much of it’s intended audience) may have found hard to navigate through.

As it is however, it provides a perfect reference tool for companies making their way through the maze of moving from a traditional break-fix/SLA based business model to an outcome based services model, where uptime and CSAT are the new golden KPIS.

So how does the book plot out your path towards a truly servitized business?

Actually, the path laid out by Kowalkowski and Ulaga is a fairly straightforward one, based on their work with a number of differing organisations. As with all good ideas this journey starts at the beginning by establishing a clear understanding of why companies should be taking this path in the first place.

And of course not all companies are created equal, and very few scenarios are ever the same. So the opening section of the book deals with understanding your organisations position.

“First of all the service imperative, why at all move into service in the first place,” Kowalkowski comments.

“Is such a move a defensive stance to defend a product business? Or is it more offensive to gain additional revenue streams? What internal and external drivers towards advanced services exist within your organisation? Are you perhaps already on a burning platform - in which case maybe you better move a lot faster?”

“It [Understanding your position] also enables you to access the low hanging fruit, but then if you want to make more profound changes then you need to transform your business model more extensively and different elements of it.”

“What are B2B services – what are the key challenges? Products, are of course very heterogeneous but services are even more so - so, you really need to understand that it is a very different animal selling spare parts to promising up-gain sharing – it’s different worlds.”

 

The book also focuses on the cultural elements of such activities which typically are overlooked in a lot of the other academic literature on servitization which do not touch much upon the softer issues.

Yet the cultural aspect is really important and a key inclusion the book as Kowalkowski explains.

“We have a framework, key characteristics of what becomes important when building a service culture,” he begins.

“It’s all about the starting points – you often start in a service desert, a very myopic perspective where service is a necessary evil. Then the journey is through a dark tunnel before you the see the first glimpse of the promising light where service becomes a key growth engine - and that should be the aim.”

Then this framework can also be used for analysing and diagnosing the internal organisation – where are you today and what do you need to do to get to where you need to be.

Do we have some people who are really strong and supportive within the service business and if so are they in the right place?

“It’s not enough to have a service enthusiast in middle management level.” Kowalkowski asserts.

“You might need to have some service evangelist on the top level and you need the service promoters on the front office. Then you need to convince enough people who are fairly indifferent towards this, you can’t convince those that are the outright obstructers, but to form a guiding coalition large and powerful enough to make it stick – this is something that is important and we focus on this in the chapter on division and leadership.”

 

“We explore how can you do this using established change management framework and how to apply that to a servitization context – so forming a strong guiding and coalition and then empowering others to act upon that vision,” he adds.

In fact, the approach outlined in the book utilises the well established Kotter’s eight step framework which we then applied to this context.

“We said what are the service specific traits of change management here and provide some examples of that instead of re-inventing the wheel,” Kowalkowski comments.

“You have these proven frameworks already and this is very much a change management effort. It is not necessarily the hard things that fail, you might have the technology in place but maybe a company may focus to much on what is technically possible.”

“It becomes this double edge sword - do too much and you just rely on your technological features, investing in technology is of course OK, but ask what can the end customer do with it? You need someone who can analyse the data and suggest improvements for your client’s business, and provide them with insight that they don’t necessarily have the time and resources to do themselves perhaps?”

 

In fact, the questions around how, when and why customers should be engaged within the process of moving to a servitized business model are also covered extensively within the book.

“We focus on the customer and the job to be done in really understanding and outlining how service innovation and development is different from product innovation. We look at strategy and how it is aligned to corporate thoughts?”

“Are you really prepared to cannibalise your business – is that even really necessary?” It may that it is not - depending on what your goal is for the service growth initiative is.”

Again the emphasis is very much about establishing a firm understanding of your own current position before proceeding further. “We offer a diagnostic  test that asks are you are you fit for services, do you have the right resource for what it takes? We look at this in a very straight forward manner but it can be a good starting point for many companies.”

“Then we also look at how to move from free to fee, that is how to capture more value from your existing services – which again is a good starting point for moving towards advanced services, but is also useful for maximising revenue from and getting the most mileage out of your existing services.”

Finally, there is then a focus on building a service factory, which is also about improving existing services.

“We include an example of service blueprinting and how it can be used to improve the efficiency and productivity of the service business," Kowalkowski states.

“It’s all about managing efficiency, effectiveness and capacity utilisation. Again depending on the type of service business, then what productivity aspects are important can be defined.”

Whilst the change management and cultural question are in the main handled by Kowalkowski, the discussion around the transition from selling items, to selling services is a complex one and this part of the equation is handled predominantly by Ulaga.

“Transforming sales is of course a big thing as well and Wolfgang has been working a lot with the sales management - so this part of the book is all based on his extensive work in that area,” explains Kowalkowski.

There is, of course, a very different mindset between a service sales team and a product sales team. But should companies who move to advance services be focussed on retraining their existing staff or replacing them with a specialist sales team that understands and gets service sales?

“Obviously with the magnitude of change, understanding how important it is to get this right is key,” replies Kowalkowski when I put this question to him.

“We dedicate time to looking at the key aspects; what is the difference between industrial sales and service sales? The differences in learning orientation? Customer service orientation?”

“Sometimes, they [service sales professionals] have to be more introverted - which is interesting as you generally look at sales professionals as extroverted people.”

 

‘But look at those who sell service, and who does so well and there is often a much more introverted personality amongst those who are successful.”

It is of course all about the organisation and how to fit service into your organisation.

You will never have a one size fits all solution as different companies work in different ways but Kowalkowski points out that they have noted some “different development patterns over time, such as breaking up the silo mentality, how to foster the collaboration of central and local units and so on,” insight into which would pay for the price of the book itself.

Similarly, understanding if Servitization is right for your business is just a first step on that journey, having a road-map like this book is useful in terms of knowing where you are heading and how to get there. However, it’s also good to know how fast you should be going on various elements of the journey as well.

And this has been embedded into Kowalkowski and Ulaga work also. “In terms of what comes first, strategy or structure - for us it is about having enough in place to be able to initiate the change and execute it,” Kowalkowski comments.

“Maybe you can quite easily identify things that are currently lacking – e.g ‘we are not strong in risk management’. Obviously if a company is about to offer output based services they need to improve that before they can move forward.”

“Yet, whilst that is quite concrete and you could still grab some further low hanging fruit by reviewing your current service pricing – can you start doing something about that?”

“Maybe you need to just start changing cultures and processes for certain things – or even leave some problem areas as they are - as in the long term it may encourages other service and product sales, having a delayed benefit that outweighs the problem it creates today.”

Indeed, the questions around servitization are often as complex as they are numerous, yet the long-term rewards are numerous and long lasting. For anyone going through the shift to servitization books like this are going to be of huge use.

 

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Kris Oldland, Editor-in-Chief, Field Service News reports from Field Service USA and talks to Scott Montgomerie of Scope AR about the role of Augmented Reality in Field Service

 

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In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

The first question of this topic was "Just how big is the potential impact of IoT on Field Service?"  whilst the second answered was "Is IoT now making the shift from early adoption to mass adoption amongst field service companies?"

So let's move onto the third question of the topic...

 

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Question Three: What are the challenges of implementing an IoT strategy within field service operation?

One of the biggest challenges of marrying IoT and field service is developing the technological infrastructure to capture, process, and respond to the data collected by IoT-enabled assets. Turning voluminous data into business intelligence will require service organisations to completely rethink their operations.

If a machine can tell you an uncomplicated part needs replacement, will you be able to dispatch a junior (and therefore less expensive) resource to provide maintenance; or simply deliver the part to the customer by drone? Will you be able to do so without human intervention? Will you be able to use IoT data to optimise scheduling preventive maintenance while reserving capacity for emergency work?

In order to fully realise the benefits of IoT, field service organisations will need to incorporate artificial intelligence driven service automation solutions that integrate with their other systems. IT support will be increasingly important, as well as expertise in data science.

 

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There are still some hurdles to overcome in the wider context, such as security, data storage, infrastructure demands, and the knock-on effects across a company’s wider IT systems. But many of the data protection issues and cyber threats have been addressed by the development of more sophisticated edge computing devices and edge to Cloud technologies, as well as putting some of intelligence and logic (AI) power and computing next to the critical asset. Very few companies have the expertise in-house required to protect industrial data, so you should engage data science cyber security specialists where it makes sense.

There’s also the question of who in a company can best lead the digital charge. Companies need a person or team that can bridge the gap between IT, service and operations so that all competing priorities are met. It’s an easier issue for larger companies to address as they have a greater breadth of talent pool and a wider range of skills.

I also think mindset can be an inhibitor or an accelerator. Most people can think big, but the potential of the Industrial Internet means you can think bigger. You’ve got to sit down and look of the art of the possible and then map a digital strategy to it. There’s lots of help available in this area, such as dedicated foundries, maturity assessments et al, but people don’t know they exist.

 

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Like many things, it depends:

If equipment is high-value and expected to have a long life, you need to retrofit them with sensors.

Those sensors may be 3rd-party.

Many facilities, even today, have limited bandwidth available to them. This can make transmitting data from many sources challenging.

For third-party service providers there’s the question of data ownership. Who owns information collected about how equipment is being used and is performing? The service provider? The OEM? The customer?

Fundamentally, the biggest challenge with adopting and implementing IoT is having the right structure and systems in place to maximise its value. It doesn’t serves an organisation to have the ability to collect data from assets if that data is not processed and actioned in real-time.

Organisations need business process intelligence, optimised field service management, and real-time visibility to truly maximise the potential of IoT.

 

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Next weeks the final question of this topic: Are field service companies who are not adopting IoT at risk of becoming non- competitive?

 

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