AUTHOR ARCHIVES: Michael Blumberg

Scheduling software has long been a foundational technology for field service companies allowing them to meet customer demands. Michael Blumberg lifts the lid on all of the key aspects of this crucial tool...

 

If you have spent any time in Field Service, you probably understand the importance of managing service delivery functions against key performance indicators (KPIs). Among the most critical KPIs in the Field Service Leaders track are First Time Fix (FTF), Service Level Agreement (SLA) Compliance or Onsite Response Time (ORT), and Mean Time to Repair (MTTR). These KPIs measure the effectiveness of a Field Service Organization (FSOs) in delivering quality service in a timely manner.

The inability to meet KPI targets may result in exponential costs, customer attrition and loss of revenue; whereas the ability to exceed customer expectations can result in customer appreciation followed by an increase in profit margins and sales. To effectively schedule/dispatch the right technician to arrive on time with the right parts and skillset plays a significant role in meeting these outcomes. This is definitely not a small feat for your typical FSO.

 

"Scheduling and dispatching Field Service Engineers (FSE) poses a challenge for most FSOs, particularly those with more than 5 FSEs. The reason behind this is there are many variables and factors involved..."

 

Scheduling and dispatching Field Service Engineers (FSE) poses a challenge for most FSOs, particularly those with more than 5 FSEs. The reason behind this is there are many variables and factors involved.

An FSO with only one or two FSEs and a few customers may not perceive scheduling to be a major challenge. The volume of service requests may be relatively low while the options of who, when and where to send them may be rather limited. Scheduling becomes more of a challenge as the volume of service requests (i.e., customers) and the number of FSEs increases.

Adding to this complexity are the business objectives and/or constraints an FSO must optimize to meet its scheduling requirements.

With additional constraints or objectives, the more difficult it becomes to produce a solid schedule. For example, if the objective is to only meet a response time commitment to the customer, then the decision is easy - assign the FSE who can arrive in a timely manner at the customer’s site.

If FTF, MTTR, and/or SLA Compliance targets are also part of the equation, it becomes even more difficult to produce that solid schedule. Adding a profit margin objective, high call volumes, multiple geographies, and a sizable pool of FSEs, the decision becomes even more overwhelming.

 

"The reason why scheduling is so excruciating of a task is that there are numerous factors that an FSO would need to create and evaluate to determine the optimal assignment for each FSE..."

 

The reason why scheduling is so excruciating of a task is that there are numerous factors that an FSO would need to create and evaluate to determine the optimal assignment for each FSE.

This is a time-consuming activity that requires an extensive amount of computational power to achieve. Many companies have suffered from a loss of time and resources in dealing with confusion and potential human error. The solution is Dynamic Scheduling Software.

Dynamic Scheduling Software provides FSOs with the feature-rich functionality that streamlines, automates, and optimizes scheduling decisions.

This technology ensures the FSO sends the assigned technician to the right job having the proper skill set and arriving on time. These applications typically leverage a scheduling engine that optimizes FSE job assignment. Scheduling engines vary in their complexity ranging from those based on business rules to Linear Programming (i.e. goodness of fit) techniques, Operations Research Algorithms (e.g., Quantum Annealing, Genetic Algorithms, etc.), or Artificial Intelligence (AI)/Self-Learning applications.

The complexity of the scheduling problem, number and types of resources involved, duration of tasks, and objectives to be optimized play a role in determining which scheduling engine is most functional.

Critical factors to consider may include whether the scheduling engine can handle:

1. multi-day projects or short duration field service visits,
2. people and assets (e.g., tools, parts, trucks, equipment) or solely people,
3. the number and types of KPIs that are part of the objective, and
4. route planning requirements.

In evaluating Dynamic Scheduling Software, FSOs are also advised to consider the following criteria:

• Cloud versus On-Premise Deployment Options
• Speed and Ease of Implementation
• Integration with Back-office Systems
• Availability of Real-time Visibility by the Customer
• FSO Requirements for Best of Breed or Integrated Enterprise Solution
• Total Cost of Ownership
• Return on Investment
• Vendor Industry Knowledge and Experience

There are over a dozen software vendors who offer some form of dynamic scheduling functionality for field service.

Obviously, no two Dynamic Scheduling applications are alike. Each one has their points of differentiation. The best solution is a function of the level of importance the FSO places on each criterion and how each vendor meets these criteria.

Regardless of which vendor is selected, the benefits of Dynamic Scheduling are clear.

In fact, industry benchmarks show that companies who implement these types of solutions can achieve a 20% to 25% improvement in operating efficiency, field service productivity, and utilization. The impact on bottom line profitability and customer satisfaction is substantial. To enable FSOs to provide customers with an Uber-like experience and significant profitability, FSOs should consider deploying Dynamic Scheduling Software as part of their service delivery infrastructure.

 

---

Michael Blumberg, is President of the Blumberg Advisory Group 

---

 

Be social and share... 

Michael Blumberg, President of Blumberg Advisory Group and founder of fieldserviceinsights.com discusses some of the most crucial mistakes field service companies can make when utilising contingent or seasonal labour...

Field Service Organizations (FSOs) in North America, UK, and Europe are increasingly turning toward crowdsourcing platforms and subcontractors to augment their field workforce.

This type of outsourcing strategy enables FSOs to become more agile in meeting customer demands for service. As a result, they [FSOs] are able to reduce costs and improve service productivity. In addition, crowdsourcing and contingent labour helps solve the problem of finding skilled labour on a rapid basis.

Turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force.However, turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force. Naturally, questions emerge about the reliability, expertise, and quality of technicians that are sourced through these options.

Over the last two years, we have spoken with dozens of companies who have or currently utilize contingent labour to either augment their existing workforce or gain greater agility and efficiency over the entire field service delivery process. The majority are satisfied with their external providers and report positive results on key performance metrics such as First Time Fix and SLA Compliance/Onsite Arrive Time.   On the other hand, a few anomalies exist where the performance of contingent labour did not meet the FSOs expectations.

Quite often, FSOs who experience subpar performance make critical mistakes when retaining and managing contingent labour.

Here is our perspective on the biggest mistakes they need to avoid:

1. Failure to fully vet individual technicians doing the work

Don’t assume that every contract technician (e.g., subcontractor, freelance, crowdsource) you dispatch has the skills, training, and experience necessary to complete the work properly and in a timely manner. Insist on viewing background checks, certifications, and credentials of every contract technician assigned to your company.

2. Failure to train and onboard technicians

Quite often companies issue work orders without to contract technicians without training or guiding them on how they'd like the work to be performed.

For example, they do not explain how they'd like the tech to greet the customer and/or notify the customer when the work is complete.  Fortunately, Internet-based learning systems make it possible for companies to train and onboard contractors in a cost-effective and rapid manner.

3. Failure to communicate with contractors

This is the biggest mistake that a company can make is hand off work orders as if they were tossing a hot potato over a fence.

This will result in problem with respect to key service performance metrics such as SLA compliance, First Time Fix, and No Fault Found.  It is important that companies provide contractors with detailed and specific instructions about the activities they need to perform on each assignment.

At the same time, contractors also need to communicate with the companies that hire them on the status of calls, issues or problems they are experiencing, and results of their actions.

4. Failure to integrate contract or crowdsourced technicians into their service delivery process

Problems can occur when there is too much of an arm’s less relationship between the company and the contractor.  In other words, there is little accountability, visibility, and control between the company and contractors/technicians, and vice versa.

The key to success lies in treating contractors as an extension of your company.  Companies can achieve this outcome by leveraging communication technology, collaboration tools, and workforce automation software.  Relying on these systems will ensure the company achieves best in class service performance through its contractor network.

In summary, FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labour. This does not necessarily mean that they must make huge capital investments.

FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labourRather, they are urged to design and implement processes and procedures by leveraging existing infrastructure when they can.

Devoting the time and effort to this initiative will pay off. Our research suggests that FSOs who have an unpleasant experience with contingent labour do so because they rush into the decision without much thought, planning, and preparation.

Basically, they are looking to solve an immediate problem with no consideration to future. In other words, they are taking a tactical approach to labour shortages where a strategic solution is required.

Be social and share

Michael Blumberg, President, Blumberg Advisory Group and founder of Field Service Insights outlines how service organisations are overlooking the fundamental difference between a customer not seeing value in a service offering and a customer objecting to price and explains why understanding these are two very different things can open up a world of increased revenue streams...

Field Service Executives often face challenges when it comes to generating additional service revenue for their companies.

They often face resistance from customers as evidenced by low contract attachment rates. The natural tendency is to blame the price as the reasons why customers aren’t purchasing more services contracts.

After all, this is the feedback they received from their sales teams and from the customers.

Being logical and rational business people, field service executives try to solve the problem by lowering the price, after all, if the customer says that the price is too high, it must be the reason why they are not buying, right?

To quote, the popular song by George and Ira Gershwin, “It ain’t necessarily so!”. While price may be a factor in the purchase decision, seldom is price the only reason why customers don’t purchase service contracts.

In market research studies that I have conducted for clients in a wide array of technology service markets, I have found that price is often low on the list of criteria that end-users consider when selecting and evaluating service providers. Criteria such as quality of service, knowledge and skill of service personnel, breadth of service offering, and vendor’s knowledge of their business are perceived by customers to have higher importance than price alone.

The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract. The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract.

This is because they have no way of logically defending the value of the service being purchased. Stated another way; they are not able to differentiate the benefits of service contracts from time and materials service. The problem is that Field Service Organizations (FSOs) often attempt to sell service contracts without providing justification about why a service contract is better than simply paying for service on a time and materials basis.

A common saying among sales professionals is that customers buy emotionally and then defend their purchases logically. All too often, FSOs provide little emotional reason why a customer should purchase as service contract as opposed to T & M and even less logical supporting evidence about why a service contract is more valuable.

To achieve high attachment rates, FSOs must be able to articulate the value of their service offerings to customers as well as to their own salespeople. The value proposition must impact customers’ emotionally by addressing their fears, worries, doubts, and concerns about the impact of service or the lack thereof on their operations.

For example, fear of excessive equipment downtime, lost revenue, low machine utilization levels, or the possibility of quality defects. Of course, the FSO needs to provide logical supporting evidence why their service offering will eliminate these issues.

FSOs achieve this results by articulating, either through a sales conversation or marketing collateral, what’s included in a service contract that is not included in time & materials. This requires they do an effective job in defining the coverage, entitlements and resources available to the customer through a service contract.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They must be able to answer the customer primary question “What’s in it for me?”. If the only difference between a service contract and time & materials is that the customer can prepay for service, then there is no emotional value or logical contrast. However, if the service contract provides a preferred level of service (e.g., 4-hour response time, 99.9% uptime guarantee, 7 by 24-hour coverage, parts, etc.) or preferred price structure then the customer is presented with some real value and contrast.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They do this by offering more value in a service contract than the customer could possibly receive through time and materials services.

Of course, the best way win over customers is by being honest and letting them know exactly how service contracts enable you, the service provider, to provide a better level of service.

Fundamentally, FSOs can deliver better service to customers under contract.

This is because the contacts provide data about the installed base and service demand requirements. As a result, FSOS can anticipate service events and be more effective at planning and allocating service resources. This, in turn, makes it possible for FSOs to provide a guaranteed level of service to their customers.

Honesty is always the best policy especially when it is supported by a guaranty and exceptional service!

Be social and share

Michael Blumberg, President of Blumberg Associates and Founder of Field Service Insights offers us an in-depth look at how the key market forces that influence service revenues...

I am often asked by clients to help them implement strategies to grow their service revenue.

Often these engagements occur because a client perceives that they are not getting their fair share of revenue and it's impacting the profitability of their company.

Developing new revenue streams does not happen by magic, a consultant doesn’t just waive his wand and suddenly sales take off. Increasing top line service revenue takes a little work but the results of this effort can pay off  handsomely.

All too often, Field Service management teams attempt to solve their revenue woes without first understanding their root cause.

They assume that the reason why more customers are not purchasing services from their company is that they price is too high. After all, that’s what their customers are telling them, so it must be true.

Companies that get caught up in this line of reasoning often find themselves implementing sales strategies based on some form of price concession, discount, or gimmick.

For example, charging the customer a small upfront contract fee for the right to purchase Time & Materials (T &M) service at a discounted rate, or treating service contracts as though they were a paid-up T & M retainer and allowing customers to carry unused portion of the retainer into the next year.

The assumption behind these pricing strategies is that more customers are likely to purchase the service because it is more affordable.

Unfortunately, the logic behind this line of reasoning is a bit flawed. Sure, the company may be able to secure more equipment under contracts through price adjustments. However, they will more than likely need to sell more service contracts to achieve the same gross margins as before the increase.

A company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.For example, a company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

At issue, price may not necessarily be the only reason why companies don’t buy service. This assumption would hold true if all customers are price sensitive. The truth is all customers are not. It typically a small percentage.

More importantly, customers will always point to price as their primary reason for not buying services if they are not presented with other compelling reasons to buy.

The reason many customers do not purchase service is because of the perceived lack of value.

Customers think prices are too high when they do not recognise or understand the value they will receive from the service provided.

The problem is that it is difficult to articulate the value of service.

Most companies, particularly manufacturers, don’t know where to begin.

The more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.As consumers, we’ve all become accustomed to describing value in terms of the tangible aspects of a product. For example, its size, colour, workmanship, reliability and price. However, service is an intangible. How does one describe the value of something that is intangible?

The answer is by making distinctions about it. In other words, by describing the service in terms of the problems it solves, the outcomes or results it create, and/or the time it takes to complete.

Indeed, time is usually one of the biggest value drivers in field service.

Consider this, the more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

Assuming no difference in price, which service offering sounds more appealing?

• A) a service contract that simply provides parts and labour or,
• B) one that provides 7-day by 24- hour coverage, parts, labor, same day onsite response time, remote support, and guaranteed uptime.

My hunch is that you picked B. This offering provides more value. Don’t you agree?

Unfortunately, most companies are not making these types of distinctions about their service offering.

It is should comes as no surprise that customers think the price is too high and don’t buy service contracts, and instead choose to take their chances and purchase service when needed on a Time & Materials basis.

Don’t misunderstand me, I am not urging field service companies to sell service features or outcomes they can’t deliver.

On the other hand, I am recommending those companies who are struggling with selling service contracts consider whether their service offerings or portfolios are defined with the customers' perception of value in mind.

For the service to have value, it must be described in terms of the experience or outcome provided.

Does it save time or money? Does it increase machine utilization? Does it improve the quality or cost of operations?

By defining the portfolio in this way, Field Service companies can test different offerings through competitive analysis, survey research, and conjoint (i.e., trade-off) analysis.

They would, of course, need to ensure they can deliver on the promise of the portfolio prior to offering it to the customers.

Conducting this type of research, also allows companies to determine which service offerings are most optimal or in demand by their customer base.

All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions In addition, distinctions provide the basis for differentiation and creating a competitive advantage. All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions then one that does not.

Some segments of the market may even pay a higher price for high value services particularly if they cannot purchase them elsewhere.

With the trend towards offering anything (e.g., products) as a service (XaaS) and Smart (i.e., IoT) Services, Field Service companies will need to become more adept at selling outcomes.

To do so they must be able to describe distinctions and articulate value. XaaS and Smart Services will not just sell themselves.

Field Service Executives are advised to start developing these skills now with service offered on existing equipment so they learn to be proficient at selling service contract when their XaaS and Smart Service programs are actually launched.

Be social and share

The digital revolution in the field service sector is continuing to move forward at pace, Michael Blumberg, Principal Consultant, Blumberg Advisory Group helps us keep track...

It seems that there is no escaping the Digital Transformation Revolution in Field Service at this moment. A splendid example of this is the Servitization of Manufacturing. Servitization is about the journey a company goes through as it transforms from a product-centric company where service is an afterthought or a necessary evil to one that generates a sizable portion of revenue from services; where service is the business.  The ultimate example is a Product as a Service business.

This is sort of the razor and razor blade scenario where the manufacturer gives away the razor in exchange for the recurring revenue stream that comes from purchasing the razor blades.  Instead of razor blades, it services or more specifically, outcome-based services.  For example, paying for the usage or result (e.g., outcome) produced by a product instead of buying the actual product.   To deliver on the promise, the provider of this outcome most implement a broad array of digital technologies to ensure the equipment is up and running whenever the customer needs to access it.  Downtime is problematic so you need to have technologies like IoT, AI, AR, etc. to ensure this high uptime.

In parallel to the servitization trend is the general ethos that businesses need to disrupt or be disruptedIn parallel to the servitization trend is the general ethos that businesses need to disrupt or be disrupted.  Uber has become the poster child for disruption.  This has lead many Field Service Organizations, software vendors, and technology providers to promote the concept of “Uberization” within field service.

Let’s put the term Uberization into context, when I hear the term Uberization, I think of providing customers with real-time, on-demand, always on, always connected solution.  Other terms that people associate with Uberization are agility and frictionless.  Agility is the ability to scale quickly, frictionless is where touch points that would delay the time it takes to complete a transaction are eliminated.  We might also think of a solution that incorporates aspects of the sharing economy or gig economy.

The Field Service Industry is far from being a laggard when it comes to Uberization.  Examples of how Field Service Organizations (FSOs) are achieving this outcome include but are not limited to:

• Utilizing IoT to monitor equipment performance and send notifications and alerts about the condition and performance of the machine
• Leveraging Artificial Intelligence to interpret these notifications, identify and diagnose problems, and take corrective actions
• Transmitting dispatch orders, triggered by IoT alerts, electronically to an ERP or CRM system and using Dynamic Scheduling software functionality to assign the right person for the job based on the needs of the job
• Turning to a freelance management system platform to source and dispatch freelance technicians on-demand to scale to capacity during peak periods
• Using Augmented Reality, Virtual Reality, or Mixed Reality to provide less experienced field engineers with expertise they need to resolve technical problems they haven’t encountered before
• Relying on Big Data and analytics to optimize resource planning and allocation issues.[/unordered_list]

If FSOs are going to remain relevant and create value for their customers, their leaders must adapt and grow within the context of the trends identified above.   This motivation is required now more than ever.  Technological development and new business models are coming at such as rapid pace that leaders can afford to rest on their laurels or past successes of their company.  Past success does not guarantee future results!

In this digital age, companies must be faster, stronger and better than their competitorsIn this digital age, companies must be faster, stronger and better than their competitors.  A 5-year strategy is typically out of date within 18 months or less.  To survive and thrive in 2018, Field Service Leaders must have a crystal-clear vision about the outcomes they’d like to achieve within their organizations. They must pursue these outcomes with laser-like focus and adopt a sense of urgency about achieving these results.

Accountability to the mission is critical as is a mindset of certainty and a spirit of resourcefulness.

Quite often, the greatest of strategies and best of intentions are not pursued because of a lack of certainty or a perceived lack of resources.  The truth is that those who overcome enormous challenges and achieve phenomenal results have done so because of their determination (i.e., certainty) and their resourcefulness.   Cultivate these traits and the possibilities are endless.

Be social and share

Michael Blumberg, President Blumberg Advisory Group explains why Augmented Reality will be at the core of field service in the not too distant future giving examples of three companies that have already embraced this game-changing tech...

Want to know more? You’ll find a white paper on this topic @ fs-ne.ws/7Q9230fLKu7

If your Field Service Organization (FSO) is not using some form of remote telepresence or video collaboration tool today like Augmented Reality (AR) or Virtual Reality (VR), chances are you will be in the future.

There are many compelling data points and trends that support this prognosis. First, a recent study by Salesforce.com reports that 92% of service executives indicated they need to transform their service models to keep up with consumer needs.

Second, according to Aberdeen Group, Best in Class field service organizations are 72% more likely than their peers to utilize visual collaboration tools (e.g., AR/VR). It is only a matter of time before other companies follow suit. Third, end-customers have begun to expect this type of service experience. Indeed, 84% of millennial customers have used a self-service portal for customer service. The immersive nature of AR/VR apps makes it the ultimate self-service experience.

Customer demand is obviously a critical factor driving the proliferation of AR/VR applications in the field service industry.

Fueling the demand for AR/VR technology is the fact that it is both relevant and effective within a broad array of industry segments and use casesAs a result, the use of collaboration tools like AR will become the standard by which customers evaluate and measure field service performance. Fueling the demand for AR/VR technology is the fact that it is both relevant and effective within a broad array of industry segments and use cases.

Indeed, it is difficult to find any technology segments where AR/VR does not have practical value. In fact, any technology that is comprised of electronic, electro-mechanical (e.g., pneumatic, hydraulic, etc.) or electrical components can benefit from AR/VR enabled service and support.

Another factor driving demand is the fact that early adopters are achieving measurable results from the deployment of AR/VR pilot projects. For example:

Siemens Industrial Turbomachinery is exploring AR and VR solutions to increase both field service utilisation and productivity while reducing travel expenditures. AR would enable the company to send technicians who communicate with remote experts, thus reducing the total number of man-hours on site as well as travel costs.

Bombardier, a provider of propulsion and control equipment for trains, was able to make significant savings, per service event every time they utilized AR to resolve technical issues remotely.

Bosch Rexroth, a manufacturer of hydraulic drive systems, spent every year in Sweden alone a lot of travelling time to go to customer’s sites to inspect what problem or question the customer had prior to deploying AR. The company now offers its customers the option of purchasing support hours to their value-added service offering that utilizes AR to deliver remote support. The collaborative and visual aspects of this technology are far more effective than telephone support. As a result, Bosch Rexroth is now able to provide quicker uptime to customers while generating a profitable income stream.

The technology industry, of which field service is a subset, is already considered to be the biggest economic driver of ARIn the coming years, we are likely to see an exponential growth of AR in the field service industry. In fact, the technology industry, of which field service is a subset, is already considered to be the biggest economic driver of AR. Furthermore, industry forecasters anticipate that expenditures on AR technology will exceed $100 million by 2020.

While we are likely to see new developments in AR/VR feature functionality, this technology will be deployed in one of two environments:

1. In support of an existing installed base of equipment
2. Embedded in the design of new products

We are also likely to find different versions of AR deployed in the field. For example, certain service environments, like Oil & Gas or Utilities, may require that AR applications be integrated with rugged wearable devices to deliver a hands-free environment, whereas non-rugged wearable devices or smartphones/tablets may be more than sufficient in enabling a collaborative experience in markets like IT or Telecom.

As technology improves it is very likely that consumers will purchase AR for business use in much the same way they purchase their own laptops and smartphones for similar business use. It is also quite possible that “Bring Your Own Device” (BYOD) will apply to AR as well.

This will completely change the paradigm of service support and break down barriers to finding and hiring talent, which in turn will continue to facilitate the use of freelance technicians. Regardless of future possibilities, these potential developments should not stop FSOs from investing in AR and reaping the benefits today.

Be social and share

Michael Blumberg, President Blumberg Advisory Group gives us some insight into his recent conversations at Field Service Fall in Florida last month, where Augmented Reality was once again one of the hot topics of the conference...

I recently attended WBR’s Field Service Fall 2017 conference in Amelia Island, Florida where there was a lot of buzz among participants about Augmented Reality and Virtual Telepresence. Many industry experts, observers, and practitioners believe that these technologies will have a dramatic impact on field service delivery in terms of shortening resolution times, improving first time fix rate, and reducing travel costs.

In my discussions with conference attendees, I concluded that Field service leaders face several challenges when it comes to making investments in modern technologies like Augmented Reality (AR) and Virtual Reality (VR). One obvious challenge lies in determining whether the investment is currently a priority.

To answer this question, they need to have a clear understanding about what problems they are trying to solve and what results they are trying to achieve through it.

The best way to answer these questions is to develop a use-case justification based on the Key Performance Indicators (KPIs) that are improved through the deployment of these technologies.

The second biggest challenge has to with the confusion that exists among field service leaders with regard to alternative and/or competing platforms, for example, AR versus VR. . By definition, VR offers a digital recreation of a real life (or fantasy world) setting, while AR delivers virtual elements as an overlay to the real world. There is also Mixed Reality (MR) where we see a merging of real and virtual worlds to produce a new environment and visual image where physical and digital objects co-exist and interact in real time.

These platforms involve different levels of investment, time, and complexity to implement. AR is typically the least expensive and fastest platform to implement.

Many AR solutions that are available on the market today can be developed, implemented and rolled out rapidly. In contrast, VR and MR platforms often require extensive programming, development, and integration before they can be rolled out to the field.

 

On the other hand, VR and MR provide a more feature-rich environment and visual experience than AR. For example, AR/MR can overlay 3-D digital twins of a sub-assembly and generate animated repair procedures as well as virtual dashboards of machine performance.

A significant investment is required to implement this type of platform and these investments often require input from various internal stakeholders including engineering, sales, marketing, manufacturing, and finance. For some OEMs or other service providers it may be cost-prohibitive to retro-fit their existing installed base with this type of technology.

A common misconception is that wearable glasses must be incorporated into an AR or VR solution. These devices may not be practical or ergonomically suited for the task at hand. However, this is just one component of the platform so all hardware and software needs must be considered with each solution. Other viewing devices, such as a smart phone or tablet, can be used to generate a remote, collaborative experience.

Many field service leaders are taking a wait-and-see attitude to implementing AR/VR/MR in hopes that costs will decrease and better versions will be available in the future. So why not wait? Field service leaders must remember that time-to-market is everything. FSOs that wait too long to take advantage of this technology may lose their competitive advantage and market share.

Once field service leaders decide on a course of action here is how to get started: The optimal approach, one that will guarantee early success, is to select a mature AR solution that can be rolled out with minimum upfront programming, software development, and systems integration.

FSOs are also advised not be overly concerned with developing an exhaustive list of feature functionality that can be included in their AR solution.

This is because AR features are continuously evolving, and too much planning into an unknown future will slow down the evaluation and selection process. Most AR solutions are available through an On-Demand model, which means new enhancements will be available as part of the subscription.

 

Lastly, FSOs are urged to demo and pilot, yes, pilot products from multiple vendors. Unlike enterprise software or mobility applications, an FSO can run multiple pilot projects with limited upfront investment in time or capital.

When it comes to selecting an AR vendor, remember that AR is a part of a broader digital transformation impacting the company.

Choose an AR partner who will work with existing IT platforms and overall strategy and can provide guidance in how to best integrate their solution. FSOs are advised to consider the following criteria:

• Sensitivity to customer’s needs – In other words, select a vendor that understands that AR is still a relatively new technology and that education and some amount of “hand-holding” is required to ensure a successful pilot and/or implementation.
• Flexibility – Vendors create win/win situations by providing their customers with flexibility. The two most critical areas where flexibility wins are business-model and software requirements. Flexible vendors offer alternative pricing methods and flexible software-feature options.
• Knowledge of best practices – This refers more specifically to best practices around change management and adoption and usage.
• Ability to integrate AR platform with ERP solutions – This will enable FSOs to store and retrieve remote sessions with dispatch work orders.
• Products that can operate in a low-bandwidth communication environment – This will facilitate the ability of FSOs to use AR in remote geographic areas.

Selecting an AR solution based on these criteria will help ensure successful results.

 

---

 

Be social and share

Michael Blumberg, President of the Blumberg Advisory Group discusses recent research his organisation worked on with Giuntini and Company on the processes being used to effectively sell extended warranty programs and argues that if you adopt the right approach, moving from customised service contracts to selling outcome based services isn’t such a huge leap of evolution...

No one can dispute the fact that manufacturers are placing increased attention on growing top line service revenue. Typically, this revenue is captured through the sale of EW/ES programs.

Given the level of focus place on this subject by manufacturers and service providers, Blumberg Advisory Group and Giuntini and Company partnered to conduct a study among professionals involved in selling extended warranty and/or extended service programs. To qualify as a survey participants, respondents had to influence, recommend or make decisions about these programs.

The objective in conducting the survey was twofold: To identify best practices involved in marketing and selling extended warranty and/or extended service (EW/ES) programs and to evaluate the impact of these practices on key performance indicators (KPIs).

 

As field service leaders may recognise, contract attachment and contract renewal are the most important Key Performance Indicators (KPIs) associated with marketing and selling of EW/ES programs. Interestingly, we found that only a small number (less than 22%) of survey participants have achieved best in class performance metrics of greater than 50% for contract attachment or 75% for contract renewal rates.

 

The factors that drive contract attachment rates are warranty configuration and the types of marketing tactics employed.

Configuration refers to the length of coverage, level of customisation, processes engaged and resources employed in delivering the warranty, and entitlement levels offered. The survey results suggest that the more distinctions a company can make about its EW/ES program, they more likely customers will be to purchase it.

In other words, customers consider the value of a service contract before they purchase it.

This is an “eye-opener” because many companies have the view that a warranty is a warranty. The management within these companies believe that just because customers purchase their product they’ll also purchase the extended warranty.

Most of the companies we surveyed rely on traditional marketing tactics like sales aids (e.g. brochures) and direct sales to sell EW/ES programs. Usually, these tactics are employed at the product point of purchase.

 

However, companies who continue to sell service contracts after the product sale are likely to experience a 20% improvement in attachment rates on average. Other sales and marketing tactics which have proven to be effective in driving attachment rates include customer testimonials, reputation management, telemarketing (i.e., outbound sales), public relations (e.g., press releases, article placement, etc.) and analyst reviews.

 

Manufacturers who experience high EW/ES contract attachment and renewal rates understand that the activities involved in marketing and selling these programs is separate and distinct from those involved in selling products.

In other words, service leaders in these best in class companies put as much time and effort into configuring, marketing, and selling service contracts as their counterparts in the product organisation place on designing, marketing and selling products.

Effective field service leaders recognise that service won’t sell itself. They understand that just because the customer owns the product doesn’t guarantee they’ll buy the service. In addition, field service leaders in these service organisations make sure they have the right systems and processes in place to market and sell service contracts.

 

For example, processes and systems that facilitate a company’s ability to configure, price, and quote customised service contracts. While 87.5% of companies surveyed have a formal process in place to configure and price service programs, only 13% employ a Configure, Price, and Quote (CPQ) software application.

 

The trend toward customers wanting to buy outcomes as opposed to services or products will place even more pressure on field service leaders to become proficient at configuring, pricing, quoting, and selling service contracts.

While recent technologies like IoT, AI, and Big Data will make it easier for companies to deliver outcomes, manufacturers still need to provide customers with a contract that specifies exactly what is include in the “outcome” they have purchased.

For example, it defines the terms and conditions, the hours of coverage, the level of availability, the resources provided, and the processes engaged in delivering the agreed upon outcome to the customer. It also describes the level of entitlements and roles and responsibilities of the party providing the outcome as well as the party receiving the outcome.

Furthermore, it is likely that outcomes may differ from customer to customer.

Manufacturers who have not mastered the fine art of selling traditional service programs may find selling outcome based services a real nightmare.

Yet in many ways, selling an outcome based contact is no different than selling a customised extended warranty or extended service contract.

That’s why companies need to start investing in systems and processes that facilitate configuration, pricing, and quotation of services contracts today.

 

---

 

Be social and share this feature

Worldwide Business Research (WBR) held its Field Service 2017 conference at the end of April with over 450 service leaders from top manufacturing and service companies in attendance.

With so many service leaders in one place what better opportunity to find out what five key areas field service companies are focussing on? Michael Blumberg, was on hand to find out...

 

---

 

1. Leveraging IoT to drive service efficiency:

There has been a lot of buzz lately in the media and among industry analysts about the value of IoT in improving the efficiency of field service operations. No wonder it was one of the key themes of Field Service 2017!

IoT offers several benefits to field service organisations (FSOs) including the ability to remotely monitor machine performance, make proactive adjustments to improve machine life, predict when a machine is about to fail and provide proactive service, and remotely diagnose problems when the do occur.

As a result, FSOs can gain better control over costs and resources. While IoT holds great promise, many conference participants have not fully implemented end to end IoT solutions. Field Service 2017 provided them with an opportunity to gain new perspectives from Field Service leaders who have already achieved these outcome.

 

---

 

2.  Embracing digital transformation to create a “Uber” like service model:

Today, many Field Service leaders are asking themselves if their service businesses are ready for uberization?

This question stems from the growing trend of companies to offer services through an always on, always connected, always visible, and always available business model. Technologies such GPS, mobility, optimisation software and innovative approaches to sourcing labour (think - gig economy jobs, crowdsourcing, contingent labour) have helped to facilitate these models.

Given that these technologies and labour models are also available to FSOs combined with the fact that consumers have grown to expect an “uber”-like experiences in general, Field Service leaders believe it is only a matter of time before they need to implement similar business models.

 

---

 

3. Creating and finding a new workforce:

A common challenge facing the field service industry, regardless of the technology supported, is the shortage of skilled field service engineers (FSEs).  Let’s face it, the younger generation does not view field service as a “sexy” profession.  Given other career paths, why would anyone want to fix broken products when they can be building the next “big-thing”. 

On the other hand, there are a ton of good people out there who can perform field service jobs.

The problem is they either prefer to work freelance and/or lack the appropriate level of training or experience.

Field Service 2017 provided attendees with the opportunity to learn how Crowd-sourcing applications and Freelance Management Systems can provide access to a broader labour pool, and how Augment Reality tools can help less experience FSEs overcome any knowledge gaps they possess.

 

---

 

4. Optimising service parts management:

Managing service parts is the costliest aspect of field service management after managing labour.

Not only do customers expect their FSEs to arrive in a timely manner, they also expect them to resolve their issues right the first time. Having the right spare parts available at the right time is critical.

However, FSOs can’t afford to have too many parts sitting in many locations for too long as it causes a drain on profits. Optimization of spare parts, in other words, making sure you have just the right amount of parts at just the right number of locations is critical. Although this seems like an age-old problem facing FSOs, it is nice to see the topic on the agenda at Field Service 2017 since Field Service leaders need to continually refresh their knowledge of this subject.

 

---

 

5. Nurturing an environment of customer first:

This topic is also a long-standing issue facing Field Service leaders. It has gained renewed attention as companies place greater and greater focus on improving the customer experience.

However, there are still a great deal of high-tech companies who remain focused on putting their products first, customers second, and service third.

Competitive trends, technological developments, and market requirements are continually forcing companies to rethink this paradigm.

If Field Service leaders are serious about creating at customer first environment and want their service organisations to play a more key role in this shift, they must be able to influence their management teams to invest in the strategies, tactics, and tools that make this transition possible.

Learning about best practices and similar experiences from peers at Field Service 2017 helps facilitate this outcome.

 

---

 

Be social and share this feature