Why field service must head back to digital basics

Feb 15, 2017 • Features • Management • Nick Frank • on-Demand Economy • CHange Management • field service • Si2 partners

The key to digital transformation for field service organisations lies in people and not technology writes Nick Frank of Si2 Partners...

“The rate of increase of industrial devices being connected to the internet is up 25% per year, but customers don’t really appreciate how the capabilities and benefits of the IoT are relevant to their business’

So says Dave Hammond, Product Manager at MAC Solutions. And he should know, as he sells and manages the market leading eWON router, which enables industrial equipment to be accessed securely and remotely, across the Internet. For business leaders, his ‘grass routes’ observations are far more insightful into the challenges of monetising data, then the many articles routinely churned out on the subject.

Despite what you might read, it is only larger businesses that have the resources to invest in developing their own bespoke infrastructure; and even then, most of the tangible gains remain in the area of cost reduction.

It highlights the importance of mind-set above all else, which is all about getting back to management basics, a point that many commentators have lost sight of. What becomes clear from talking to people like Dave is that servitization, industrie 4.0 and Digital economy have little perceived relevance to SME businesses at the moment. Their focus is on better meeting the needs of their customers but mainly reducing costs. Many are enabling their equipment for remote connectivity with a business case solely based on savings and cost reduction.

They can easily imagine and so justify the investment based on a reduction in costly service visits through remote diagnosis, especially during the warranty period, where they bear 100% of the cost. With the number of devices being put on-line booming, everything sounds pretty good with the market. But Dave and his colleagues at MAC are concerned at the lack of ‘market understanding’ from the UK SME’s they talk to.

In their ‘Connectivity Roadmap’ most customers are stuck at level 2 - ‘Get Connected’, which is all about cost! They struggle to justify moving to the next phase of delivering proactive service revenues and ultimately transforming their business.

So what are the underlying causes of this stagnation and an inability to step up to the challenge?

Part of the reason lies in the lack of maturity of the tool sets being developed by IoT providers such as GE, Microsoft and PTC. In the last 3 years, huge investments have brought these tools into the realms of reality, but they are still relatively cumbersome to integrate into the business processes.

For many in the industry, another challenge is around culture. Most quarters of industry have struggled to really imagine what the technology can do for their business. They have become trapped in product-centric thinking, rather than deeply analysing where the value is delivered within their customer and industry value chains.

The good news is that the business case to ‘Get Connected’ is so inequitably clear, that at least many engineers have been encouraged to pilot the technology and learn for themselves what it can do.

A second challenge is the conservative nature of many industrial businesses in adapting to fundamental change. Together these represent a significant mind-set issue.

By moving emphasis away from technology towards outcomes and operational excellence, many businesses will be able to deliver more value and hence profitability

The message for many businesses is that to maximise their return on technology investment, they would do well to challenge their current culture to become more outward orientated and service focused.

This means not only better understanding customers’ needs and their immediate problem.
But moving deeper into how to harness their inherent know-how and technology to help their customers make money. By moving emphasis away from technology towards outcomes and operational excellence, many businesses will be able to deliver more value and hence profitability.

The problem is that this is a ‘back-to-basics’ approach, based on common sense and, as we all know, common sense is one of the hardest elements of business upon which to act. Leaders can start by encouraging an ‘outside-in’ approach, taking a long hard look at the value they add to their customers and how they influence the industry value chain.

Then together with the experiences they gain in understanding the power of these digital technologies, they will develop the insight and confidence to turn data into profits.

So, if you sense your initiatives in developing these new capabilities are slowing down or not meeting your expectations, perhaps there are three basic challenges for you to review...

Do you have the right level of insight to use your know how to make your customer more profitable?
Do you know how to use information to make your operations more cost effective?
Are your people encouraged to explore new ideas and have an environment and process in which innovative ideas can be turned into reality?

Nick can be contacted on nick.frank@Si2partners.com Si2 ON-Demand is a unique advisory and support service that enables top performing leaders to solve problems and get things done, quickly, easily and cost effectively.