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Within the last twelve months we have seen a sudden rush of Merger and Acquisition activities within the field service sector with many major brands including ServiceMax, ClickSoftware and most recently ServicePower all being acquired. So why has the field service sector suddenly become such a hotbed for investment and what does it mean for the innovation in our industry?

Kris Oldland, Editor-in-Chief, Field Service News reports...

I’ve referred to field service as a sector at times as a ghost sector because despite field service impacting almost everyone, and it crossing across almost all verticals outside those who work within our horizontal sector the role of field service management and certainly the tools that those in this field use are relatively unknown.

Yet, it seems that over the last few years someone, somewhere has certainly started paying attention.

Of course, the growing trend within global manufacturing circles towards embracing servitization has put service front and centre whilst various projected estimates of the value of the Global FSM market ranging from $5BN to $25BN will of course be flagged up on the radars of money men, and it certainly seems that the field service sector has come under more of a spot light than it has in its recent past.

“This is occurring for several reasons,” explains Michael Blumberg, President of the Blumberg Advisory Group, when I asked him why it seemed Field Service Management providers had recently become hot targets for prospective investment.”

“First, field service businesses tend to be less susceptible to changes in the economy. During an economic down turn, new equipment sales decline but customers still purchase field services to extend the life of their equipment. In an upturn, companies continue to require field services to support investments in new technology.”

 

“Second, field service businesses often generate a recurring revenue stream (e.g., service contracts) which is also something that is very attractive to investors and also field service providers often hold a defensible market position because of their long-term relationship with customers and unique capabilities.”

“When a company acquires a field service provider they also acquire its customer base which provides a captive market for cross-selling and up-selling additional products and services.”

“Finally and most importantly, field service is usually a basic offering and building block in delivering a subscription based, product-service model (think Servitization) to customers.”

With so many key reasons why field service solution providers are an attractive proposition isn’t the recent run of acquisitions somewhat overdue?

Bill Pollock, President of Strategies for GrowthSM, certainly thinks so.

“It should have happened years ago!” He proclaims when I put this question to him.

“However, the acquiring organisations seemed to have other priorities in mind with respect to broadening and strengthening their existing offerings, and tailoring them to a more narrowing-defined market space.”

“For example, CRM vendors tended to focus more on expanding the functionality of their respective CRM platforms, while ERP vendors tended to do the same with theirs. Remember, there were days, way back when – when a Field Service Management (FSM) solution provided only the functionality required to run a services operation – but not a services business (i.e., no accounts payable/billable or accounting functionality; no reverse logistics; no human resources; etc.). In those days past, a services business would also need to acquire ancillary software packages (e.g., anyone remember Peachtree Software?) in order to manage the entire services business.”

 

“It’s a bit different today. As more and more software providers expand their offerings to run the entire business, they now market themselves as offering a “new” type of platform for doing so.”

“In general, it will be those organisations that move into (or buy into) the field services arena – for all the right reasons – that are most likely to be successful. That is, if a field service functionality makes sense as a logical extension of their existing offerings, then they will be more likely to succeed.

However, those that attempt to “ram their way” into what is already a fast growing and vibrant market sector, some without even having a complete FSM offering, will find themselves “busted” in the eyes of their targeted market base.”

Meanwhile, Sara Mueller, Field Service Portfolio Director, Worldwide Business Research believes that the fact that service has increasingly become a key battleground for competing companies is another key reason why the FSM sector as a whole is gaining more and more attention.

“Since many products have become largely commoditised, service is the competitive differentiator for organisations.” She begins.

“Therefore they are willing to invest in making service better. Technology is dramatically shifting the performance of service organisations, allowing them to grow exponentially, provide a more seamless experience that results in higher customer satisfaction, and even generate much higher profitability.”

 

“While technicians are an integral part of field service, technology solutions are necessary to minimise human error, capture the knowledge of and account for the retiring baby boomer generation of head technicians, even to keep technicians safer on the job.”

Mueller’s point however does perhaps reveal a potential double-edged sword.

Innovation in technology and service delivery have become wonderfully entangled within the last decade - which is why many companies have been able to move towards outcome based contracts, and why service is beginning to outgrow the ‘aftermarket’ tag and become a key revenue stream now being discussed much more seriously amongst the C-Suite.

This is of course a fundamental reason why our FSM solution providers have become such attractive investment options. However, could the very innovation that put the sector on the map dry up when independent, entrepreneurial tech companies get swallowed up by larger organisations?

Pollock certainly doesn’t think that we need to worry about the level of technology available to field service organisations failing to meet requirements at any point in the near future however.

“The currently available technology, coupled with newer technology that always seems to be lurking “just around the corner”, is already sufficient to meet (and exceed) all of the FSO’s requirements for managing their field service operations – and then some! It’s already here!” He comments.

“As such, the global services market is not likely to experience a plateau in terms of recognition, adoption and/or deployment of these new technological advances anytime soon. In fact, as the proliferation of technology appears to be eclipsing adoption by the marketplace, there is no plateau in sight. There is still a “mountain of growth” ready to be conquered!”

 

“This accelerating growth is likely to bring more FSM provider suitors to the forefront rather than less. For example, three or four years ago, how many field service managers thought that Microsoft would acquire itself into the fray? Many industry analysts missed the signs that Oracle was about to acquire TOA Technologies. However, with several major players already having acquired, licensed and/or organically entered the field services market, the question arises: Who will be next?

On the demand side, where has Apple been? What about SAP? What about any of the large, global, systems integrators? On the supply side, what, if anything, will ultimately happen with ClickSoftware? What about the “tried and true” historical vendors, like Astea? And what about all of those Venture Capital and investment firms that seem to be gobbling up one FSM vendor after another?”

Indeed, Mueller’s view also supports the assertion that the current technology is certainly sufficient to meet the growing needs of service delivery.

“The field service management technology today can accomplish remarkable results and drive business transformation. But service organisations are at widely varying degrees of adoption and sophistication, and are looking for more diversity in solution offerings in order to find the right choice for their priorities and budgets.”

However, she also sees the innovation at the heart of our industry as a key driver for continued technological innovation as well adding, “Just as customer needs keep evolving, FSM solutions will need to do so as well.”

And this latter point is also echoed by Blumberg.

“Sure, it is possible that innovation may become less of a priority as FSM vendors become part of larger software companies. However, there will always be lean, nimble, start-up companies focused on FSM that drive innovation and fill any void created by M & A.” He asserts.

 

“I’ve been a consultant to the Field Service Industry for over 25 year and have experienced several M & A cycles, and this is exactly what has happened. It is also very unlikely that innovation will plateau even within larger software companies who have acquired FSM solutions. To quote management guru Peter Drucker, business has only two functions… innovation and marketing.

This a basic tenant of business. Without innovation, companies lose their relevancy and competitive edge.”

So whilst the consensus is that the current M&A cycle won’t lead to any halt in the ongoing development of technology to support field service, one message does seem to be coming out of each of the field service providers acquired and that is reference to the future of FSM solutions being part of wider platforms.

But how far will the FSM platform go? Will we ultimately see FSM become as integral to business systems as ERP and CRM?

Mueller for one believes that this is where the future lies.

“It can be as integral to business as ERP and CRM systems.” She comments

“Given that service is a competitive differentiator for these organisations, FSM platforms are essential to provide the level of service now being expected from customers. The experience a customer receives through field service is often how they will shape their opinion of the product and whether they will buy again. Field service is the front line of the organisation and FSM ensures the experience with field service is ideal.”

Pollock, however, disagrees.

“For the time being, FSM will likely remain subservient, in most cases, to CRM and ERP,” he comments.

 

“The difference between an FSM solution and an FSM platform is that the former is essentially used to run the services operations, while the latter is used to run the entire business. As far as marketing and market positioning go, doesn’t “platform” sound more important than “solution”, anyway?”

“CRM-based solution providers have long touted their products as full “platforms” that may be used to run an entire business; ERP-based solution providers have essentially marketed their offerings in the same manner. By incorporating an FSM solution into their respective offerings, they can now all claim (and, probably, rightfully so) that their offerings represent a complete (or near-complete) platform upon which future services functionalities can be built – whether strictly in support of field service operations, or any other business activity.”

“However, it is not necessarily a “slam-dunk” that FSM will become as integral to business systems as ERP and CRM, as not all businesses have field service offerings – while all have (or should have) an ERP and/or ERP capability.

Further, as remote and predictive diagnostics, powered by the Internet of Things (IoT) and Augmented Reality (AR), make further footholds in the general services arena, running a field service operation may become more important, while become less cumbersome to run (and, as such, more likely to be outsourced, possibly, to a third party).” Pollock concludes.

“FSM software is already an integral part of business systems among those companies that operate Field Service as either a strategic line of business or a profit centre. And there’s the rub, many companies that service products do not have requirements for FSM functionality.” comments Blumberg.

“For example, some provide only depot repair or outsource their service requirements to 3rd parties. Nevertheless, I find it interesting that there are no fully integrated, end to end FSM platforms on the market today that include the complete array of functionality for managing a Field Service Organisations (FSO).”

 

“If an FSO wants to implement such as solution, they often must deploy multiple enterprise systems and point solutions from different vendors. In addition, FSM functionality usually needs to interface with other enterprise system platforms such as CRM, ERP, and most recently IoT to obtain critical data to complete the service transactions,” he adds before summarising.

“On the other hand, I certainly see a need in the market for standalone, functional robust FSM platforms. In fact, I have been advising both private equity groups (PE) and software developers for the last 20 years to make investments that achieve this outcome. Unfortunately, given market dynamics, capital requirements, and technology considerations, it unlikely that PE or software developers will invest the necessary resources to create such a platform.”

“Therefore, it is likely that FSM functionality will continue to remain an add -on purchase to existing enterprise systems.”

 

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Michael Blumberg, President of Blumberg Advisory Group gives us an insiders view of how to ensure our customers understand the true value of extended warranties and service contracts...

Warranty Attachment and Renewal rates are Key Performance Indicators (KPIs) that measure how successful a company is in marketing and selling extended warranties and extended service programs. Ideally, a company would want to achieve attachment rate of 50% or higher and renewal rates of 75% or better. This is considered best in class performance.

Only a small percentage of companies have been able to achieve these targets.

Key findings from Blumberg Advisory Group’s recent survey on extended warranty benchmarks and best practices indicate that only 30% of companies have achieved attachment rates of 50% or more. In fact, 16.7% have achieved attachment rates of 70% or better. While the majority (59.5%) of companies experience renewal rates of 75% or more, only 22.5% have achieved renewal rates greater than 90%.

There are several best practices that companies can pursue to achieve best in class performance on KPIs related to marketing and selling extended warranties and extended service program. Most significantly, service portfolio design plays a critical role in influencing attachment and renewal rates. The truth is that customers will purchase these programs if they feel that they will effectively meet their needs. That’s’ why it is important to specify what’s included in the program from the perspective of features, resources, and coverage.

 

It important to include both basic and value-added services as part of the program. The more extensive and focused the services, the more likely the customers will be to buy. Nearly all the companies surveyed (93.2%) provide basic corrective failure as part of their program. Only 50.4% include preventative maintenance. Less than 40% offer a broader array of value added services such as calibration, inspection, recalls, and disaster recovery as part of the portfolio.

Indicating the level of service commitment, the customer can expect to receive is also important when it comes to selling extended warranty and extended service programs. Only 58.1% of companies have defined onsite response times as part of their programs, 39.3% specify parts delivery times, 29.9% and 31.6% respectively commit to the repair time and remote resolution times, and 15.0% will provide a loaner unit if repair time target is not met.

The way in which these programs are promoted can also impacts KPIs. Most companies surveyed rely on direct mail (74.8%) and brochures (68.0%) to sell extended warranty and extended service programs. Most respondents (58.5%) indicate that direct sales have been very effective when it comes to impacting attachment rates while only 26.6% believe that brochures are as effective. Interestingly, survey respondents agree that other tactics are just as effective. For example, 50% of respondents indicate that endorsements and testimonials are very effective as is reputation management (49.1%), telemarketing (32.0%) and public relations (28.9%).

 

Frequency of communication is also a critical driver when it comes to influencing attachment and renewal rates. Almost half (49%) of respondents indicate that they sell extended warranty and extended service programs any time after the original product sale which means the capture revenue at any point in time during the product’s lifecycle.

Only 28.0% notify customers 90 days or more in advance of when their programs are up for renewal and 36.0% provide more than 3 notifications that there contracts are about to expire. More importantly, most (60%) respondents upsell their programs during the warranty entitlement process.

As result, they experience incremental improvements in attachment rates; 36.5% indicate they have experienced a 10% to 25% improvement and 20.1% have experienced a 26% to 50% improvement from pursuing this tactic. In summary, the survey findings suggest that best in class companies follow a structure and disciplined approach to marketing and selling extended warranties and service programs. They do not view sales of these programs as a one-time even to be made only at the product point of sale. Indeed, they sell beyond the original point of purchase and align attachment and renewals with the customer entitlement process.

 

Furthermore, they promote their programs through a wide array of marketing communications tactics and rely on frequent and timely communication to get their message across. Most importantly, they ensure their programs are designed to meet the needs of their customer and are very specific about what the customer can expect to receive in terms of service feature, resources, and coverage.

 

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Michael Blumebrg, President, Blumberg Advisory Group explains why the on-demand economy has become a very attractive value proposition for both FSOs and their customers...

I recently marked a significant milestone in my career. This year marks 32 years since I began work as a management consultant in the Field Service Industry.

I was a newly minted MBA when I started and wondered how I could possibly help clients solve their field service challenges. One of my mentors at the time told me that the key to my success was to just keep at it.

Eventually, I’d have enough experience to solve any challenge presented to me; even those that people were dealing with for the first time. Not just because I’ve seen these issues before but because I would be able to anticipate them.

Looking back, I find these words of wisdom to have been spot on. The Field Service Industry has changed so much since I began working in it.

Much of what we anticipated would happen has happened.

Oldsmobile, a now defunct car manufacturer, had a popular commercial jingle on television in the United States when I began my career…” this is not your father’s Oldsmobile… this is the new generation of Olds”. I feel the same way about Field Service. We have entered a new generation of field service.

 

The field service industry has changed so much such much since I started working in it. Interestingly, much of what the experts at that time predicted would happen with respect to field service has happened.

Back in the good old days, I used to sit around the lunch table with my colleagues and discuss how technology would change the service delivery model and how service would become a utility just like electricity, water, or gas.

It would always be available when you needed it, you would consume it frequently, and pay for what you use. In other words, we were describing the basic elements of the on-demand economy. We just didn’t know it at the time.

What exactly is the On-Demand Economy?

Tech Insider Magazine defines it as the economic activity created by technology companies that fulfil consumer demand via the immediate provisioning f goods and services. Uber, eBay, Lyft, and Airbnb are classic examples of the On-demand economy in practice.

Field Service is also rapidly becoming an On-Demand economy business. Over the last twenty years there have been several industry trends and developments that have made this possible.

Here are a few examples of how Field Service Organisations (FSOs) are leveraging technology to become On-Demand economy businesses:

• Dynamic Scheduling provides real-time information on technician availability which permits FSOs to immediately commit to their customers when a Field Engineer (FE) will arrive on site.
• GPS Technology provides real-time visibility of FE location which enables immediate updates as to when the FE will arrive on site
• Freelancer Management Systems provide FSOs with the ability to source, train, and dispatch freelance technicians. As result, FSOs can scale their workforce on-demand.
• Advanced Technology such as IoT, Augmented Reality, and Artificial Intelligence provides the technical platform for delivering on-demand diagnostics to FEs and end-customers reducing resolution time and improving first time fix.
• 3D Printing Technology enables FSOs to produce parts on-demand. Thus, they can reduce their investment in spare parts inventory, improve fill rate, and lower their logistics and transportation costs.
• Servitization Business Models where manufacturers charge for usage of their product on a subscription basis, such as Rolls Royce’s “power by the all”; the ultimate example of an on-demand economy business. Customers pay for what they consume, when they consume it.
• On-demand consulting platforms like Si2Partners provide a collaborative platform for Field Service Leaders to access subject matter experts to validate thinking, solve problems, challenge assumptions, and formulate new approaches as needed.
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The On-Demand Economy is no longer a concept of the future as far as the Field Service Industry is concerned. It represents a very attractive value proposition for both FSOs and their customers.

There are numerous case studies and data points available that demonstrate how the advancements identified above have helped FSOs improve the efficiency, agility, and economics of service. It will only be a matter of time before Manufacturers and FSOs develop and market on-demand value propositions to business customers in the same way that Uber or Airbnb have done with consumers.

Given current trends, FSOs will need to give serious consideration as to whether they should develop on-demand, “uber-like” service offerings for their customers. It is likely that customers will expect these offerings just as they have come to expect other types of services that have become standard within our industry.

 

There will obviously be leaders, followers, and those left behind when it comes to On-Demand. The question is where will you company reside on this spectrum. Will your company be first to market or will you wait to see what happens? The choice isn’t easy.

Ultimately the answer comes down to whether your company and your customers are ready for On-Demand.

If my experience offers any wisdom, then it’s that entry into any new service or market requires a good bit of market research, analysis, planning, and execution.

On-demand consulting platforms like Si2 Partners can certainly be a critical resource to field service leaders as they formulate their own on-demand service strategies.

 

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High-Tech manufacturers and their channel partners have begun to recognise the strategic value of providing extended warranty and extended service programs in the aftermarket. Indeed, these programs can represent a significant source of profitable and recurring revenue. As result, more and more service executives are tasked with the responsibility of building and growing these programs writes Michael Blumberg, President, Blumberg Consulting Group 

At issue, some companies are very effective at marketing and selling these programs while others face challenges. What factors set these companies apart? Does it have to do with warranty price being too high, service offerings being inadequate, sales efforts not effective, or just lack of interest among customers? Which begs the next question… What can service executives and warranty professionals do to overcome these challenges?

To answer these questions, Blumberg Advisory Group in conjunction with Giuntini and Company have launched a market research study among warranty and service professionals who influence, recommend  or make decisions about extended warranty and/or extended service programs.

The objective of this survey is to identify best practices involved in marketing and selling extended warranty and/or extended service programs, and evaluate the impact of these practices on key performance indicators (KPIs).    The findings will validate which strategies and tactics have the greatest impact on maximizing service revenue which in turn will help managers and executives become more effective in marketing and selling extended warranty/service programs.

More specifically, the survey result will evaluate how various elements of the service marketing mix (e.g., pricing, portfolio, terms & conditions, etc.) and service delivery infrastructure help or hinder KPIs. It will also examine the impact of alternative types of sales approaches and pricing strategies impact attachment and renewal rates. The information will be compiled a new benchmark research study, never presented, as well as from twenty years of progressive industry analysis of best practices.

 

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If you are interested in participating then you can access the survey through this link 

 

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The survey should take approximately 15-20 minutes to complete. One out of every 50 participants will receive a $100 American Express Gift Certificate, and every participant will receive an executive summary of the survey results.

Please note that the survey will close January 18th 2017. We also expect to publish results of this survey in Field Service News in the March/April timeframe

 

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Michael Blumberg, President of Blumberg Advisory Group discusses the emerging hiring trends of the variable workforce and freelance management systems and looks at how these can be applied to help field service organisations balance staffing levels with workloads...

If you follow the business news, you have heard about hiring trends which are moving away from the traditional full time employee model. Having full time employees means a guarantee of wages, benefits, vacation time, sick time and paying additional federal wage taxes.

With the new labour laws coming into play regarding overtime, this can mean additional expenses as well. It also means paying the employee even when there is a lull in the business. For a service company there may be peaks and valleys in workflow and the need for field service personnel. And while so much can be done on a remote basis, there remain many times when someone just has to be onsite to fix the problem. Clients are no longer localised geographically so having technicians who can get there quickly becomes an additional challenge.

For all of these reasons, companies have increasingly turned to freelance workers, AKA a Variable Workforce. Freelancers have existed for decades in the form of writers, artists, administrative assistants and others who were not full time or part time employees, rather they worked and were paid as contactors. The idea of outsourcing work is not a new concept either. The difference is the increase in the number of and types of workers for hire on a part-time or project basis. In relationship to the Field Service Industry, there are now highly skilled, well trained, specialised Field Service Engineers who are available on an as needed or project basis. These individuals are normally highly motivated as they essentially run their own small business and generally have a strong work ethic.

 

For most people in the Variable Workforce, they work this way by choice, enjoying the flexibility that being your own boss can offer. This workforce can be found worldwide and can get to those emergency on-site calls fast. That speed satisfies the customer and saves the service company money.

Given changes in the way companies staff their businesses, a new system of managing this process is a natural extension. With the increased pool of a project based, part time workers has come the growth of Freelance Management Systems (FMS). These online cloud based systems allow those companies looking for qualified workers, including Field Service Engineers, to find them quickly and easily.

The FMS platform handles the billing and payment, scheduling, provides a searchable database with skill sets and geographical locations of the personnel all at the fingertips of the companies who seek workers and the workers themselves. The workforce can market themselves to hundreds of companies at once and manage their incoming payments all at the click of a button.

FMS provides companies with the opportunity to achieve significant cost savings over time and the ability to accelerate strategic or organic expansion resulting in new clients, new service offerings, and/or new sales territories.

So what is the actual experience of companies using a Variable Workforce and FMS platforms? Have they been able to achieve these benefits or is it just hype?

 

When faced with questions like this, what would a great management consultant do? A survey of course! So that is what we did. We created an online survey for the Field Service Industry to look at these staffing trends and how it is being manifested.

We wanted to reach a broad range of companies, reaching out to professionals who engage field service staff or make decisions about field service staffing requirements for companies with field service functions for technology equipment they sell and/or service.

We wanted to examine the benefits of Variable Workforce models, particularly FMS. In addition, we wanted to understand key objections or concerns about the Variable Workforce and FMS models. And in doing so, we could assess the key motivators for using FMS and evaluate the impact of FMS on critical Key Performance Indices.

Finally we could use this information to identify the best candidates for using FMS. This article addresses Variable Workforce and Field Management Systems in the Field Service Industry.

The survey which we conducted yielded 203 respondents. The types of companies included those participants represent include all areas of Field Service: Third Party Maintainers/Independent Service Organisations, Original Equipment Manufacturers, Value Added Resellers, Systems Integrators, and Self-Maintainers.

The companies range in size from over $500 million in annual revenue to less than $50 million. These companies also varied in size as there were those who manage less than 100 field service events per month up to more than 1000 field service events. These field service events included emergencies, installations, inspections, and preventative maintenance or calibration. And the types of technology supported included Information Technology, Network Connectivity, Printers, Point of Sale, Telecommunications, The Internet of Things, Security Equipment, ATM and Banking, and Retail Marketing Equipment. The companies also ran the range of how a Field Service Business is run – as a cost centre, as a profit centre, as a strategic line of business, or as a revenue contribution centre.

What we found was that of the respondents, over three-quarters (77%) were currently using some type of Variable Workforce Model. Also, the respondents were two-thirds Third Party Maintainers (TPM)/ Independent Service Organisations (ISOs) or Original Equipment Manufacturers (OEMs).

 

One of the most important data points we found was that on average, the Variable Workforce users support more types of technology than companies who do not use solely a Traditional Workforce.

That is, those companies who use Variable Workforce are able to support 4 types of technology versus only 1.8 types of technology for companies who do not utilise Variable Workforce.

This piece of information reinforces the idea that those companies using a Variable Workforce can expand their service offerings not only geographically, but also to include more types of service by utilising the highly skilled specially trained technicians they can reach utilising this model.

The top three reasons that companies made the move to a Variable Workforce were:

• The ability to be agile and scale their workforce based on customer demands.
• Over half agreed that “We didn’t have enough work in selected geographies to justify hiring a full time Field Service Engineer.”
• Almost all said that controlling labor costs was a significant motivator.

Once making the decision to utilise the Variable Workforce, companies needed to find tools to help build and manage the staffing. Nearly two-thirds of those companies use a Freelance Management System. Others used and in-house team or 3rd party provider or staffing company.

Of the Freelance Management System users, almost all have been using it for at least one year and 60% for three years or more. Approximately two thirds of these companies are Third Party Maintainers/ Independent Service Organisations or Value Added Resellers.

What type of labor do they contract labour? The number one answer is project based work - an overwhelming 81% of the respondents. Not only do companies who use a Variable Workforce support more technologies than non-users, but also FMS users tend to support more types of technology. On average the companies who use FMS support 4.3 types of technology versus only 2.8 types of technology for non-users. This is most likely due to the ability to have more types of specialised engineers available to the FMS users.

As is the case with most changes, companies considering using the Variable Workforce and FMS to support that staffing model had concerns about moving the impact it would have on their business.

 

These concerns included a fear of a negative impact on customers, how would this change impact the customer and their relationship?

What did they know about the reliability and technical capabilities of the workforce they were hiring and how could they really know who these people were? And would the savings they thought they would get in the long run really be enough to justify the cost of making this change?

The companies we surveyed told us that ultimately the most compelling reason to make the switch was that the FMS platform is agile, giving companies the ability to scale up quickly to meet seasonal, cyclical and short term demands. In fact, 71% of users found this to be the case.

The benefits of FMS and the Variable Workforce these companies have realised include the ability to cover a greater geographic region, increased service coverage, increased flexibility, and lower overhead.

FMS adopters have been able to gain more business and have been able to increase their field service work.

They have experienced such success that 76% of them reported an increased demand for FMS just in this past year. In fact, most of those have increased their use by at least 15%.

 

The increased usage stems from the positive results of New Service Lines, New Customers, and Increased Geographic Coverage. The results show that the very reasons they considered making the move to FMS is now leading them to utilise this model to an even greater extent.

Taking all of the survey results into account, we feel confident that the need for and usage of Freelance Management Systems for the Variable Workforce in Field Service will continue to increase over the next year as well.

Companies of all sizes adopted this model have found the results to be overwhelmingly positive. A decrease in overhead combined with an increase in the ability to serve customers equals increased success. As one survey participant summed it up, “Increased revenue and additional customers [are] driving volumes!”

 

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Effectively managing the peaks and valleys in field service demand is one of the greatest challenges facing managers and executives across a broad array of market segments says Michael Blumberg, President & CEO of Blumberg Advisory Group, Inc.  Here, we publish the first part of extracts from his White Paper, "The Variable Workforce Model",  on how the momentum for freelance service technicians is building and potential solutions for managing them.

The Field Service Dilemma

Typically, temporary or contingent labour was utilised to support periods of peak demand: when there was a spike in new product sales or when brought about by seasonal issues. For example, a surge in installations or refreshes resulting from new product purchases required that the service organisation employ additional field service engineers (FSEs) to complete the installations in a timely manner.

However, relying on a temporary workforce to handle emergency maintenance was historically viewed as anathema to service executives within companies that sell equipment. This was because the FSEs were typically viewed as an extension of the sales team and thus vital to keeping the equipment operating and the customer happy. The conventional wisdom was that if equipment failed to operate properly then the customer would become irate, blame the manufacturer or reseller, and stop buying their products.

FSEs were considered to uniquely possess the specialised knowledge and skills required to resolve emergency issues. These skills took years to acquire and were difficult to replicate. How could emergency service be trusted to temporary employees with limited knowledge or experience with the product?  As a result, peaks in demand for emergency service were typically handled by asking FSEs to work overtime hours.

Setting the groundwork for the variable workforce

In the mid-1980s a number of service networks were created among like-minded service providers (e.g.  resellers, OEMs, etc.) to provide FSE coverage in geographic areas where their partners lacked specific skills sets: the beginning of the managed service provider concept.  Another driving force behind the decision to use contingent labour was the fact that the economics of hiring full-time personnel were not favourable. With margins declining, it was difficult for service providers to justify hiring additional personnel. Turning toward a network of vendors, subcontractors, and service companies to fill peaks in demand became a viable solution for many service providers.

 

In the 1990s outsourcing of non-core activities became popular with a number of prominent original equipment manufacturers such as Cisco, NetApp, IBM, and HP who outsourced non-strategic field service functions to Third Party Maintenance companies.

The recessions of 2001 and 2008 led to layoffs and hiring freezes across a wide array of industries. Service providers could not risk having situations where field service engineers were not available to support customers’ requests. Rather than keep non-essential workers on the payroll, companies realised they could reduce operating expenses and lower overhead costs by hiring field service engineers on a per call basis; as consultants or freelancers.

The freelance model has now become main stream within the field service industry. It gives service providers the ability to manage field service delivery through a variable workforce model. Maintaining a field service workforce on a full-time basis represents a short-term, fixed cost for service providers. With field service experiencing its own peaks and valleys in demand, a service provider can now convert a short-term fixed cost into a variable expense.

Options for building a variable workforce
[quote float="right"]Field service companies have a number of options available to them for obtaining variable field service labour.

Today, companies who support or maintain large sets of geographically dispersed technology and environments such as ATM machines in retail locations, Wi-Fi access points in coffee shops, or Internet of Things enabled technologies, have a number of options available to them for obtaining variable field service labour. These include: [ordered_list style="decimal"]

 

1. Implement Master Service Agreement (MSA) with one or more companies. This usually requires the OEM hand-off all on-site service requests to the Field Service Organisation who is responsible for managing their own workforce. While this is one of the simplest ways to obtain access to a contingent labour force, it is often the most expensive; particularly if the FSO is using its own workforce to perform the on-site request. This is because the FSO’s price per service call usually takes into account direct labour costs, plus parts, overhead, risk and profit.
   Furthermore, the FSO may not be able to provide their client with full visibility, accountability and control into the service delivery process. Basically, the client is alerted to when a call is dispatched and when it is completed, not to what occurs in between.
2. Manage subcontractors on their own. Another option is for a company to build its own variable workforce through a “Direct-To-Tech” approach. This requires that a company hire independent contractors either directly or through a staffing company, or they can reclassify existing full time FSEs as independents. Reclassification could create problems from a legal and financial perspective.[quote float="left"]The Direct-To-Tech model can be very successful but only if the nature of the work is truly independent contracting, not a second class worker.

    

   More importantly, setting up and managing a variable workforce labour pool requires an investment in mobile communication and collaboration technology, as well as new processes, procedures, and training for both management and dispatch staff.
   Companies who don’t approach this challenge strategically often end up with ad hoc systems and processes that are cumbersome and unscalable. All too often, companies end up blaming the subcontracted or freelance workforce when the real root cause of the issue is a lack of robust and scalable systems that lead to mismanagement.
3. Adopt a “Sharing Economy” model. Companies who are willing and able to manage teams of individual workers can turn to a sharing economy model. In this scenario, a company would use an Internet platform, provided by a 3rd party technology vendor, to recruit, on-board, train, dispatch, manage, and pay individual contractors. There are substantial cost savings to a company who is willing to pursue this course of action. Improvements in service quality and productivity are also possible .Freelance contractors are typically more engaged and motivated since their income is directly proportional to the quality of work performed and number of assignments they accept. More importantly, it avoids the risk of misclassifying workers. Freelancers who make themselves available through this type of labour model have made the decision to become a small business. In their work as independent contractors they have the ability to decide how many companies they contract with and which types of jobs they select, how and when they go about performing their work and how to best use their own tools and equipment.
   [/ordered_list]

All things being equal, we believe the sharing economy model offers the optimal solution for obtaining access to a variable workforce. This is provided the company using this model is prepared to engage in the necessary leg work required to manage teams of independent contractors through a Freelance Management System (FMS) platform.

 

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Watch out for Part 2 of this White Paper. Download the version here

 

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President and CEO of the Blumberg Group, Michael Blumberg, takes a detailed look at the tablet repair market... 

Adoption of tablet computers among consumer and enterprise customers is growing at an incredible rate across the globe. Though the concept of tablet computing was introduced unsuccessfully in the early 2000s with the Microsoft Tablet Computer, the launch of the original iPad in 2010 ushered in the boom era in which we’re currently living. Computer industry giants and young upstarts alike design and sell tablets in an ever-increasing variety of shapes and sizes, with features ranging from basic touchscreen functionality to complex integrated networks of sensors and input/output options, and at a wide variety of prices.

As the rate of tablet adoption and usage climbs, so too does the need for testing, screening and repair of these devices. Current implementations of in- and out warranty service models suffer from myriad reverse logistics inefficiencies that result in increased costs associated with processing returns and getting back into the market. The issues involved range from front-line customer support challenges, to costly testing, screening processes to the geographic distribution of quality repair facilities.

In a new market research study of OEMs, Retailers and Wireless Carriers in the tablet repair market; respondents highlighted key factors in selecting a tablet repair vendor. In this feature we discuss how the booming tablet market makes choosing a 3rd Party Reverse Logistics vendor critical to increasing associated forward and reverse logistics velocities and cost efficiencies, which ultimately affect the bottom line.

We emphasise the market and benefit of “optimised” screening and cleaning for retailers and wireless carriers (with generous customer returns policies), as well as the manner by which functional testing can augment the speed and quality of the return, repair, and/or replacement, of tablets. Additionally, we describe the characteristics of the ideal tablet 3rd Party Service Provider (3PSP) and the business benefits with this approach. Finally, we take a look at the multi-tablet testing system, global facilities and IT infrastructure of one particular vendor, CTDI, illustrates some of these concepts. New Developments in Tablet Computer Repair

The tablet computer market

The Tablet Computer market is young, already large, and very much still growing. Even in North America, which leads the world in early adoption of tablets, the market is far from saturated. Tablet computer shipments in North America will have nearly doubled between 2012 and 2014, to almost 120 million units shipped this year. North American Tablet Installed Base is on a similar trajectory, doubling from 104 million in ’12 to a projected 220 million this year. Continued rapid growth is projected over the next several years, as well, with the installed base projected to double again to more than 320 million units in 2017.

We can trace this exponential growth to a number of trends in the consumer and enterprise spaces, including the continued evolution of both technology and usage habits away from desktop machines and towards mobile devices. As tablets become cheaper, better and faster, users are replacing ageing PCs with sleek new slates. This trend is now commonly referred to as the dawning of the “Post-PC era.” New Developments in Tablet Computer Repair

As this so-called Post-PC era evolves, manufacturers are experimenting with varied tablet computer sizes, feature sets and price points. Major software vendors focus more on developing tablet-specific platforms and applications, as well resulting in the development and deployment of Tablet Computers in vertical market applications like Point of Sale, Supply Chain, and Healthcare. With more hardware and software applications to fit more and more use cases, tablet adoption has moved from leading edge early adopters to mainstream consumers. And the early adopters are upgrading to newer models. Refresh cycles for both hardware and software are being established and, as such, the distribution between new vs replacement tablet shipments is a key data point to understanding the overall market. New Developments in Tablet Computer Repair

Current support models

Organisations involved in the tablet support market are first and foremost affected by the high return rate currently associated with retail sales. Generous return policies often allow buyers 15-30 days to return a tablet even after opening the box and using the device. As such, buyers’ remorse has become a significant cause of return. Often times tablets returned due to buyers’ remorse exhibit little or no defects - however small - but become liabilities due to insufficient reverse logistics supply chains. This is because these units still need to be processed so that the seller (i.e., retailer, carrier, OEM) recovers maximum value.

Another problem with the current tablet support market is a lack of front-end screening and diagnostics to resolve end-users technical issues and challenges with the devices. Sufficient telephone-based or remote screening of tablet problems would greatly reduce the number of units returned through the reverse logistics supply chain, often as easily as walking the end-user through some simple knowledge-acquisition to “fix” their device problems. Similarly, not enough troubleshooting occurs post-return, before the units are shipped back to the manufacturers or their authorised repair providers. Roughly, consumers return 5% to 10% of all new tablets sold in North America, with retailers usually sending those units directly back to the manufacturers without screening or diagnosing the units themselves.

Of these returns, some 30 to 40% are classified No Fault Found (NFF), and another 40% are Cosmetic Repair. The remaining 20% or so suffer from cracked screen and broken board issues that require more costly repairs. However, the repair yield on defective units is typically in the range of 50% to 60%.

For some OEMs, this cost is too great, and results in selling the defective components for scrap value. In other words, more than three-quarters of returned tablets are either fully functional or in need of only minor, topical fixes before being repackaged and placed back in finished goods inventory. But almost all of these units are immediately sent back to a 3PSP where they are screened, tested, cleaned, refurbished, repackaged and then resold. Even when it comes to devices covered under warranty, consumers send their defective devices through the same reverse logistics supply chain in exchange for a new, replacement device. These activities, especially those related to testing & screening, have inherent challenges. For the most part, they are largely an inefficient, in terms of both cost and time as they are often extremely labor intensive and may not take advantage of advanced technology for automating the process.

Furthermore, the time spent transporting tablets to and from centralised return and facilities adds to the overall inefficiencies when processing returned units.

The optimal solutions is to move towards a regionalised reverse logistics model with several facilities located strategically throughout a region (e.g., North America, Europe, etc.) for screen, clean, and repair. This offers the shortest time between out-of-service tablets and those either returned and in use again; remarketed as is; utilised for maintenance replacement; sold as a refurbished unit or for reclamation, etc. Very few vendors operate multiple facilities across the world, let alone high volume regions like North America. As such, the screening and repair process suffers from reverse logistics inefficiencies based largely on too many devices having to travel too far for problems that could be solved locally.

New Developments in Tablet Computer Repair

Volume of tablet returns is expected to rise over the next several years. In turn, the volume of devices needing test, screen, and repair activities will also increase. For 2013, tablet returns in North America were estimated between 7.6-14.3 million units. By 2015 the volume of returns could rise as high as 20 million units. Those numbers will continue to increase in the near-term following 2015. New Developments in Tablet Computer Repair

Alternative solutions pros & cons

Clearly the tablet repair market operates inefficiently. As things stand now, everyone loses: retailers, manufacturers, service providers and consumers alike. A variety of alternative solutions to the current methodology offer benefits, but these are not without their downsides as well.

Improved front-end diagnostics is the first line of defence that could aid efficiencies. Diagnosing the problem with a tablet before its returned by the consumer - and subsequently returned to the manufacturer by the retailer - would significantly reduce the number of devices needlessly returned, tested, and repaired. The problem here lies with both retailers’ and consumers’ attitudes towards adding a layer of remote support. Many retailers currently offer a “No Questions Asked” return period of 15-30 days on tablet computers. Consumers like this policy because it gives them the chance to try a new device in their real life workflow with the safety net of getting their money back should buyers’ remorse set in. Retailers, of course, are reluctant to do anything that might drive their customers away to a competitor.

This undoubtedly includes revoking existing policies. Moreover, adding a layer of remote diagnostic support will introduce an additional cost to retailers’ tablet sales operations. Even when it comes to in-warranty repairs, manufacturers are more likely to issue an advanced exchange unit then attempt to diagnose the problem remotely. The defective unit is then sent back through the reverse logistics supply chain and added to the costs and liability associated with warranty support.

As suggested earlier, a second way to improve reverse logistics efficiencies is to move the return & repair facilities closer to the customer/retailer through a regional service model. Many 3PSPs currently offer only one, centralised US-based repair facilities. This practice directly contributes to inefficiencies in the reverse logistics supply chain - i.e. Increase time and fuel costs associated with shipping tablets great distances for testing and screening work, and then possibly on to other facilities for refurbishment and liquidation. Performing critical reverse logistic functions in strategically located facilities throughout the United States would cut transit time, resulting in increased velocity associated with turning distressed inventory from a liability into an asset. Of course, the downside associated with this solution is cost. Opening additional facilities on American soil, if ones do not exist already, is costly, both on its own and as compared to running offshore operations.

More effective device testing and screening prior to repair is a potentially viable alternative solution. Various methods of testing exist and, again, each carries with it pros and cons: New Developments in Tablet Computer Repair

MANUAL TESTING:

Inexpensive and fast to implement but subject to human error and costly in the long run.

DIAGNOSTICS TESTING:

Automated but reliant on device/API/OS-specific software wrappers. New tests may need to be created with new releases of a device, an API or OS.

BOARD LEVEL TESTING:

Testing the devices in developer or engineering boot mode. This process can be automated. The problem is that it does not address the problems with the device from an end-user perspective and, as such, real-world functionality problems may be missed.

OPEN UNIT TESTING:

The device’s screen and cover need to be removed in order to test the board on a bed of nails. This breaks the integrity of the tablet’s seal and adds time to the process, resulting in increased cost.

EMBEDDED DIAGNOSTIC TEST:

This type of testing can query the hardware, but not stress its functionality.

AUTOMATED TEST EQUIPMENT (ATE) OR “BED OF NAILS” TESTING:

This type of testing, leveraging the investments the OEM or their contract manufacturers make in end-of-line manufacturing testing, is costly, difficult to duplicate and locate regionally, and may require considerable labor in terms of the finished product and the multiple stages of testing implemented. It is also generally slower, due to it being an end-of-line test, and geared for manufacturing facilities, not repair facilities. Furthermore, Bed of Nails tests the connectivity between components as opposed to their functionality.

As evidenced, current test methods for tablets possess significant shortcomings, though testing on the whole unit does offer efficiency improvement over the “just send it back” handling of returned tablets. New Developments in Tablet Computer Repair

LIQUIDATION IS ANOTHER OPTION.

Liquidating returned tablets for their asset recovery value may seem like the most expedient approach for extracting value out of returned devices. However, it is a money-losing proposition in the long run given the high rate of NFF and cosmetic repairs, combined with the increasing volumes in the industry. Furthermore, it does not address issues associated with defective or failed components. As such, the manufacturer and its 3PSPs loose valuable intelligence that can be utilized to improve the design and/or engineering of tablet devices. Though tablet liquidators persist, this approach in the current market will have limited benefits as volumes increase and consumers hold onto their devices for an extended length of time. New Developments in Tablet Computer Repair.

Optimised test & screening solution

An optimised screening system can maximise efficiencies while avoiding many of the shortcomings exhibited by the aforementioned testing methods. Screening systems able to test 10 or more tablets at a time can offer increase speed and reduce costs associated with testing. Consistency of process and results will also rise thanks to the use of automated and semi-automated testing systems. Thus, “Screen and Clean” promotes the cost effective recovery of good units with minor cosmetic refurbishment to be processed for resale. Additionally, they can be used as maintenance replacements, or for the dispositioning of products into other markets at the best return for the retailer.

Leading-edge screening technology includes application diagnostics and embedded diagnostics that can be loaded onto devices. Tests can be run on devices in user mode as opposed to “developer” or “engineering” mode to ensure that everything works as it should from the end-user’s perspective. Functional testing of device circuits may take the form of “parametric” testing, which leads to an even greater level of reliability and quality of results.

 

A regionalised approach to testing, screening, and cleaning the units can also speed up the reverse logistics flow. Performing these functions in strategically located facilities in high volume areas within miles of major metropolitan areas will improve efficiencies as described in Section 4 above. Authorising these facilities to handle key activities like repair, refurbishment, and liquidation will reduce costs for retailers while improving asset recovery values and the speed at which tablets are returned back into consumers’ hands. This increased efficiency has the added value of making retailers’ extended warranty plans more economically viable. Furthermore, the regional model described here will also fulfil OEM's requirement to minimise costs and deliver superior customer services as measured by repair turn-around time. New Developments in Tablet Computer Repair

Vendor Selection Criteria

We surveyed a cross-section of OEMs, Retailers and Wireless Carriers regarding their needs and attitudes towards the tablet repair market. The majority of respondents surveyed indicated that their customers are required to mail in defective units to an Authorised 3rd Party Service Provider (3PSP). Many of these 3SPSs are managed by OEMs and/or their subsidiaries, speaking to the OEM lock on the still-nascent tablet repair industry.

Survey respondents spoke to a number of criteria important in choosing and sticking with a vendor. The most important factors in choosing a vendor, ranked in order of priority, are:

• QUALITY OF REPAIRS
• COMMITMENT TO QUALITY METRICS
• ABILITY TO MEET TURNAROUND TIME (TAT)
• REQUIREMENTS (2-5 DAYS)
• WILLING TO INVEST IN TRAINING
• QUALITY & THOROUGHNESS OF REPORTS
• QUALITY OF IT INFRASTRUCTURE

Clearly repair quality is paramount in vendor selection. Qualified vendors must be able to meet OEM specifications and otherwise offer consistently high quality test and repair services. Long-standing, standardised processes across a vendor’s network demonstrate commitment to quality metrics.

With turnaround time being ranked second in priority, demonstrated high-velocity forward and reverse logistics is also a key criterion in choosing a vendor. Vendors who operate multiple facilities in high-volume regions and those who offer innovative time-saving services, such as in-field warranty services, excel at meeting and surpassing TAT requirements at scale. New Developments in Tablet Computer Repair 13

Also indicated are the quality of reports and IT infrastructure. Tablets have become highly complex pieces of equipment, and a vendor’s diagnostic system must be able to test many components, sensors and functions (e.g. Microphone and speaker, Cellular and WiFi connectivity, Accelerometer / Gyroscope / Magnetometer, and so on). The vendor must also offer a thorough and reliable methodology for reporting results in both high-level “Pass/Fail” and granular detail. New Developments in Tablet Computer Repair

Vendor spotlight – CTDI

One vendor whom we’ve worked with, and regard as a highly capable and qualified service provider, is CTDI. This company excels in all areas of tablet diagnosis and repair, including the specific factors identified as critical by our survey respondents. CTDI brings 39 years of technical expertise, innovation in service models, and global testing and repair capabilities to the market. They have the ability to test more than 75,000 unique model types and offer the most comprehensive repair service portfolio in the world.

CTDI’s NightHawk Test System, an advanced multi-unit tablet tester is a prime example of the company’s commitment to technological innovation in a rapidly evolving sector. NightHawk can test 10 tablets simultaneously, leveraging innovations like front-loading tablet trays that greatly increase test capacity and daily productivity. With NightHawk, CTDI has the flexibility to keep pace with the latest tablet models, operating systems and APIs while also leveraging extreme efficiencies that keep reverse logistics velocities high. NightHawk performs fully functional testing of tablets utilising CTDI designed and developed Apps tailored to access and utilise the Tablet API’s.

The purpose of these applications is to simulate the end-users tablet experience and will test the following tablet functionality:

• Connectivity
• Multimedia
• Battery
• Touchscreen, Buttons, LEDs
• Sensors
• System Information

CTDI’s ability to offer fast, high quality screening and diagnosis of multiple brands and models of tablet devices couples with their OEM authorized repair and excess asset management services to provide a comprehensive portfolio of service offerings. CTDI employs over 350 engineers to develop testing for a variety of OEM technologies, ensuring ongoing innovation to keep pace with this fast-moving market.

CTDI has a network of 69 facilities operating in 15 countries, with 48 facilities in the US alone. This mature, global network allows CTDI to offer high velocity reverse logistics by cutting down on transit time to and from their facilities. The quality of CTDI’s infrastructure is outstanding, and efficiencies are further increased by way of CTDI’s innovative, scalable Web-based testing technology. The company’s proprietary Warehouse Management System (WMS) and eBusiness tools also allow customers to enter and track orders online 24/7. In summary, CTDIs’ state of the art technology, world class processes, and global presence allow for high speed, high quality in region repairs which supports customers’ demands New Developments in Tablet Computer Repair for immediate or very short interval repair or replacement as well as meets the OEMs’ requirements to minimise costs. New Developments in Tablet Computer Repair

Summary:

The rapid growth of the tablet computer industry has created a demand for a highly efficient approach to diagnosing and repairing returned units. Our research findings show that a majority of tablet computer suppliers (e.g., OEMs, Retailers, and Carriers) waste time and money due to multiple issues in the current flow of reverse logistics. Specifically, too many devices are needlessly returned to the manufacturers’ 3PSP where time and effort is spent on testing the devices instead of screening via phone or at the retailer, and too many devices have to travel too far a distance for quality diagnosis and repair.

Market research surveys confirm that the tablet market will continue to expand by virtually all measures, including units shipped and install base. A byproduct of this growth will be the continued, increased need for in- and out of warranty repair. Our survey of decision makers across the OEM, Retail and Wireless Carrier segment confirmed the need for quality screen and repair service vendors, and also identified the key criteria involved in selecting and renewing relationships with vendors. Factors ranking high on the list of criteria included quality of repairs, ability to meet turnaround time, willingness to invest in R&D and training, and quality of reports and IT infrastructure. The primary methods discussed to alleviate such inefficiencies are: improved front-end diagnostics, moving the return & repair facilities closer to the customer/retailer through a regional service model, and, perhaps most importantly, optimised test and screening that forgoes the costs and slow speeds associated with standard testing.

As analysed in the vendor spotlight, CTDI is one vendor who meets all of these criteria with their automated multi-unit test systems and deep roster of highly trained technicians and innovative engineering talent. CTDI is also uniquely positioned to leverage their global network of repair facilities, technical competencies, and logistics support services to increase reverse logistics velocities, add value, and drive costs down. Given the huge potential for cost savings, risk protection, and revenue gains, companies should seriously consider building a business case and ROI justification for investment in solution such as the one offered by CTDI. New Developments in Tablet Computer Repair

Resource Type: White Paper
Title: 6 things you need to know when purchasing Service Lifecycle Management software
About: Based on independent research Michael Blumberg provides critical information for anyone who is preparing to purchase Service Lifecycle Management (or Service Management) software.
Download: Download the white paper by clicking here.

 

Synopsis:

As President of the Blumberg Advisory Group, Michael R Blumberg is widely acknowledged as one of the world’s leading consultants across field service, aftermarket services and reverse logistics. He is also a prolific commentator on industry and an accomplished author of many white papers. Field Service News is pleased to bring a selection of his white papers to you. The first of these is based on an exclusive research conducted by the Blumberg Advisory Group which was a yearlong market research study sponsored by the CSDP Corporation which looked at the experiences of hundreds of companies when purchasing Service Lifecycle Management (SLM) software.

As Jerry A Edinger, CEO of CSDP corporation comments “An ideal SLM solution puts terms and conditions of the contract at the heart of the system and builds on that system with solid experience in service delivery.” “There are many Niche players in the SLM space. Decades of  experience  and trusting your provider is key to everyone’s success. We treat all of our clients as a trusted partner.  By doing this,  it creates a Win-Win for everyone” In this white paper “6 things you need to know when purchasing Service Lifecycle Management software” Blumberg distils the knowledge found in this research into six key findings for organisations looking purchase enterprise standard service software. These are:

What to expect in the sales process?

Whilst you are almost certainly going to be doing a lot of research prior to even speaking with any software providers (like reading this feature and then downloading the white paper for further detail) when you do reach the point where you are contacting providers what can you expect? Well first of all most software provider’s will give you a top level demonstration of their software either during your initial call or soon after. Typically this is just meant to give you an idea of how the software works and a more detailed, a second demonstration, customised to your own specific company’s requirements will follow. Often the software provider will request that you fill out a demo prep form ahead of the next demonstration so they can tailor the demo to your needs.

What to look for in a Software Lifecycle Management software vendor?

The service management software market is a crowded niche, there are a number of software vendors available to you and understanding the different offerings can be a confusing if not overwhelming. In this section Blumberg looks at what were the common features that companies sought from software providers. The top three factors were software feature and functionality, technical competency of vendor, and vendor flexibility, with all of the respondents rating these factors as either the most important or second most important factor they considered when purchasing service software.

How important is price?

Interestingly price is far from the dominant factor when purchasing service software with only a quarter of companies indicating that price was the most important factor when purchasing SLM software.  In fact over half of respondents selected a software solution that was somewhere in the middle in terms of cost.

How important is the role of discounts in the buying decision?

As in many industries discounting is reasonably standard and common place when pricing software so there is often room for negotiation in the purchasing process. Blumberg reveals that 83% of those who purchased an enterprise software solution in the past 24 months received a discount and 89% of those planning to purchase in the next 24 months expect a discount. However, remember to be wary of software providers who drop their price too much without concession. The lower price may just come to haunt you when it comes to implementation.

CRM, ERP or best of breed service software?

For service lifecycle management software there are often three choices; buy your service software form your CRM provider, buy from your ERP provider or choose a best of breed service software provider. Whilst it may be easier to go with the CRM or ERP providers who you already know, best of breed providers specialise in service and their products are designed to contain all the functional requirements to support the full service lifecycle management process in an organisation.

What happens after the sale?

Perhaps the most important aspect of the white paper, understanding what you can expect after you have purchased the software is of course an essential piece of insight that will shape your decision on choosing the right vendor. It is important to understand exactly what the vendor’s expectation are of you during the implementation as well as understand the level of resources the vendor will commit to you during the implementation and for post implementation support. In this final section of the white paper Blumberg provides some excellent guidance on getting this detail correct. Buying any kind of software can be a daunting, this is magnified when it is for business and when it comes to mission critical software such as Service Lifecycle Management software the stakes are even higher. Understanding the buying process is an important element of getting the right product, at the right price, with the right level of implementation support that your company needs. Drawing on the insight of hundreds who have been through the process this white paper is therefore a great resource for those considering SLM software.

Download the white paper by clicking here.