New research into the digital service trends of large manufacturers shows they are lacking the necessary IT infrastructures and are struggling to meet the expectations of customers in the servitization era.

The research ,Drivers for Digital Growth in Service, was carried out by Noventum in collaboration with HSO and Microsoft and canvassed product manufacturers and technical services companies via electronic surveys and personal interviews.

Struggles with Servitization

The study comes as the influence of servitization - the sale of an outcome, rather than a one-off purchase - has prompted a move away from traditional one-off large product investments to pay-per-use and subscription models bringing a new set of customer expectations.

Customers now expect their suppliers to assist in other business goals, such as increased production and even influencing innovation and operations. To help them achieve this, the report finds, firms must adopt new business models to deliver outcome-based, data-driven services for their clients.

However, while the study showed 80% of companies are planning to deliver or are currently delivering customer business related services, 40% admitted that their current IT framework was not robust enough to fully support these new business models.

The results suggest that firms need to adopt a digital services strategy, encompassing the entire organisation in order to deliver a successful and services-based business.

The research was conducted at the beginning of 2020 before the Covid-19 outbreak and in an introduction to the report Noventum acknowledged the impact the pandemic could have on service business growth, while suggesting it could prompt a positive change in focus leading to new service-led business models. “...for the companies who have been negatively impacted by Covid-19,” the statement said, “it will be vital to adopt the new ways of working that have been learnt during the crisis and to put in place growth strategies that will ensure the survival and sustainability of the business.”

Further Reading: 

• Read the full Executive Report from the research here.
• Read more about Servitization here @ https://www.fieldservicenews.com/servitization
• To find out more about Noventum click here.
• To find out more about HSO click here.

Hilbrand Rustema, founder and Managing Director of Noventum Service Management Consultants, guides us through the incredible growth potential that could be unlocked by optimising the service value chain...

Noventum and the Service Science Factory have been working together to help establish a working framework for service organisations seeking to harness the power of the IoT. Damien Nunes, Dr. Dominik Mahr from the Service Science Factory and Rosanne Gresnigt, Noventum introduce some of the key concepts that have underpinned their work...

Recent advances in technology put Internet-of-things (IoT)-innovation on top of the management agenda across industries. IoT innovation is predicted to increase economic value by $11.1 trillion in 2025 (McKinsey 2015).

The Service Science Factory and Noventum collaborated to showcase the implementation of IoT in organisations.

What is the Internet-of-Things (IoT) and why is it relevant?

Over the past few years, computer technology has increasingly become a commodity as it has become cheaper, faster, more reliable, more efficient, smarter, smaller, portable and more connected.

It has given the opportunity to add new capabilities to the things (products and machines) that make up our lives. Consumer-focused examples include Philips Hue lights and the Nest Thermostat that knows via your smartphone when you have arrived home and automatically turns on your lights and heating.

But this is only a small part of the opportunities that IoT can bring.

The basis of all IoT innovations are the 6 principles listed in the graphic below. The power of IoT is to combine them in such a way that they provide new services and capabilities for your customers and organisation.

How can your organisation take advantage of IoT?

Top management often delegates the development of (IoT) innovation to middle and lower management. However, new ideas frequently face scepticism and even opposition across the firm. An example of this is the belief that IoT innovation often disrupts work practices as well as current product and service portfolios, thereby cannibalising existing revenues.

More so, some employees become worried about their jobs, and can even block innovations.

Fresh ideas, awareness of opportunities and positive attitudes across the organisation are what create the breeding ground for transformative innovation. This requires a user-centred, employee participative, explorative, iterative and routed approach like Service Design Thinking.

1. Set business focus: To leverage IoT opportunities, top management not only need to commit to drive IoT innovation but also clearly determine the strategic goals such as lowering cost, creating customer delight, building the brand or driving profits.
2. Introduce IoT Capabilities & Design Thinking: Before embarking further on this explorative journey it is important to recruit an interdisciplinary team. The team should understand customer needs (in the form of critical customer pains and gains), the context of the market they are operating in, and the potential capabilities of smart connected products. In addition, the team needs to be able to think in networks and eco-systems to be able to translate this understanding into new concrete service opportunities which are both valuable to, and in line with, the organisation's ambitions.
3. Ideate IoT innovations: The field of (service) Design Thinking provides various ideation techniques which are used by the interdisciplinary team to spark creativity. This results in ideas that embody both theopportunities that IoT can provide, and also the various perspectives of the market and the organisation.
4. Share, combine and prioritise ideas: The collective sharing of ideas strengthens the feeling of organisation-wide involvement, and collective prioritisation drives commitment. It is also an important period to receive feedback and identify if ideas can be strengthened by combining them with other concepts and initiatives.
5. Map the eco-system of the IoT innovation: IoT innovations typically involve a complex ecosystem of actors, components and connections. Visually mapping out eco-systems, on both macro as well as microscale, can reveal possible challenges to realise the IoT innovation.
6. Identify the business implications: Creating a clear understanding of potential benefits, required investments, and risks is crucial to driving any innovation. In addition, managers need to know what the implications on the organisation will be and what they can expect as ‘return on investment’.
7. Pitch to important decision makers: Especially in large international organisations with multiple divisions and functions, it is critical to have ambassadors who drive internal alignment. Pitch-like presentations towards (top) management and other parts of the organisation help to create a coalition of the willing, and obtain the commitment needed for further development and implementation.
8. In summary, the outcomes of the above process are not only great ideas but also form cross-functional teams that become ambassadors for their IoT innovations. The seven-step process is, in essence, a process for changing the mindset towards an IoT future. In the end, your employees are the basis for designing IoT Innovation – Not the technology.

What’s next?

IoT enabled services usually have a disruptive nature, and this realisation often affects all areas of the organisation. The implementation, therefore, requires a clear strategy and roadmap. Without this or an agile attitude towards unforeseen events, you risk losing not only the momentum you created in the IoT exploration phase,

 

Free IoT Readiness Assesment - Do you understand the value of IoT but don't know where to start? Have you already started on your IoT journey but want to get more out of it?

Click here to take the Noventum 5 minute IoT Readiness Assesment to get an overview of where you stand in relation to IoT and determine how ready your organisation is to benefit from it.

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Rosanne Gresnigt and Hilbrand Rustema at specialist service management consultancy Noventum tackle one of the big challenges all field service organizations face - aligning the core functions of service and sales...

It’s one of the questions we hear so often. How can a company build a scalable service sales and delivery model? With increased commoditisation, pressure on growth and margins are forcing companies to think outside the box when it comes to their services.

Service businesses need savvy innovation programmes, which allow them to evolve quickly and nimbly – they need to create new customer-oriented offerings, quickly adapting to changing markets. However, navigating the right path to service transformation isn’t always straightforward. Most common approaches, Big Bang and Incremental, carry risks and yield surprisingly low success rates.

There’s an alternate path, however, increasingly being adopted by today’s more successful and forward-looking service organizations: ‘The Service Factory’.

The Service Factory approach is an agile, systematic, highly successful, low-risk approach to service transformations enabling companies to adopt innovations in tandem with today’s fast-changing customer and market needs.

How does it work?

The Service Factory approach is an analogy to an actual factory and consists of three core steps:

• Creating and maintaining a high-level vision of the future for your business with a defined portfolio of services that you want to offer to your customers
• Defining a precise architecture of your business model components that you need to sell and deliver the services in the portfolio
• Defining a roadmap in which the components are improved step-by-step according to new and changing requirements

In further detail, having developed a high-level vision of your organization’s future services portfolio, the approach requires that you break down your business into sales and delivery model components; Request Management, Diagnosis, Planning, Maintenance Engineering and Knowledge Management are examples of valuable components in your Service Factory.

Each component is then looked at from the following perspectives:

• Management Practices
• Processes
• Performance Metrics
• IT functionality

Businesses implementing this approach must:

• Have a clear vision of how the business will develop in years to come.
• Set out well-defined long-term business objectives
• Develop an understanding of what components are required and what they should look like.

Using this holistic approach, businesses can embark on an ongoing process whereby a new component is implemented every 6-8 weeks.

As such, the Service Factory is a high-paced, focused approach involving fixing, raising and maturing the level of the business, component by component.

Where to begin?

A thorough assessment of the business is a good place to begin.

Companies can start by benchmarking Key Performance Indicators (KPIs) like Customer Experience, Productivity, Gross Profit Margins and Growth Rates against top performers in their industry and proven standards.

This will enable the company to identify what the biggest areas for improvement are. As a next step, a more qualitative assessment can help to identify the root causes of under-performance and best practices.

By prioritizing the opportunities that are derived from such assessment, based on time/complexity to implement and expected added value for the company, a service transformation roadmap can be created.By prioritizing the opportunities that are derived from such assessment, based on time/complexity to implement and expected added value for the company, a service transformation roadmap can be created.

As Europe’s leading Service Management experts, Noventum has developed a comprehensive library of industry benchmarks and best practice industry standards for components covering all the major capabilities of a Service Factory.

They are developed and updated frequently based on our research activities and our work with leading service businesses across the globe.

Start with Self Assessment:

To help you move forward we're pleased to offer you access to our free online self-assessment tool which covers a limited scope of functional service business areas which is available @ www.noventum.eu/fsm-assessment-demo

This assessment will take approximately 30 minutes of your time and then upon completion of the assessment, you will directly gain access to your personalized report of opportunities that could help you to improve your own business and get your sales and service operations more closely aligned.

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Annick Perry, Senior Project Manager, Noventum gives us some insight into the findings of a recent research project that Noventum and Aston Universities Advanced Services Group have undertaken to look at Advanced Services Trend within Manufacturing...

In a joint research study with the Advanced Services Group, a centre of excellence at Aston Business School, Noventum explored how five societal ‘Megatrends' bring opportunities for business growth for manufacturing companies through advanced IoT enabled services.

The five societal megatrends we explored in this research are:

1. Value change: The increasing importance of transparency, diversity, individualisation and freedom of choice, as well as demand for meaning and connectedness.
2. Green and resource scarcity: The increasing consciousness of manufacturers when providing products and services to fulfil human development and at the same time take care of the natural system.
3. Health and Aging: An ageing society and the increasing importance of healthy living and lifestyle.
4. Globalisation and the need for community: The increasing emphasis on communities, localities, etc. to foster identity in light of a globalised world.
5. Inequality and Social Exclusion: The increasing market share of poor customers, means reducing the complexity and cost of a good and its production. Designing products for emerging countries may also call for an increase in durability and when selling the products, reliance on unconventional distribution channels. Globalisation and rising incomes in emerging countries may also drive frugal innovation, which implies that services and products need not be of inferior quality but must be provided cheaply[/ordered_list]

In this article, the focus is on just one of the Mega Trends ‘Value Change’ which provided some interesting insights on how this will impact the manufacturing industry.

Customers’ perceptions of value are changing

Consumer habits are changing, we are becoming more tech-savvy, and less connected to ownership of products and, in favour of experiences delivered by service providers operating new business models, like Airbnb. Expectations of a personalized experience are higher, which means companies must respond to customers’ needs faster and in a unique way. This change is passed on by B2C customers towards their B2B suppliers and partners. For manufacturers, this means staying alert and being proactive. As Anders Mossberg of Scania Trucks stated in our study, “Talk to your customers’ customers because they are the ones that will drive the trends in the future.”

Customers want to Buy Everything as a Service

Manufacturers are recognising the need to find new ways of offering value to customers. Their offerings are changing from a product focus to a service focus, which emphasises providing the customer with the capability to achieve their business goals, instead of emphasising product features. They are now competing through a combination of products and services, enabled by technology, tailored to meet the customer’s needs. Rolls-Royce, for example, sells hours of flight time for its jet engines rather than the more traditional purchase of the engine. These are more sophisticated, higher-value contracts, based on outcomes. They are also higher risk for the manufacturer but with higher potential to create a competitive advantage.

New technologies enable to respond to changing needs

New developments in technology are enabling the value chain to be redesigned. Embedded sensors and processors in assets and devices are increasingly capable of transmitting data to control centres to signal the need for repair or refurbishment. Research participants cited the introduction of driverless vehicles, some of whom mentioned that this is already a reality in some situations, and will increasingly be the case in the future. It will provide the opportunity for companies to take leadership and redesign the value chain to increase efficiency and added value. New configurations of networks allow companies to redefine their role in the value chain.

A transformation is needed

Delivering such advanced service requires fundamental changes in the manufacturer’s operations, relationships, organisational structures and potentially a change in their culture. Denis Bouteille of Fives addressed this in our study by saying, “Talking to the customer, we need people who can really develop the empathy, the listening and the deep understanding.”

Conclusions of the research on societal ‘Megatrends’

This exploratory research concludes that societal megatrends can drive opportunities for manufacturers to compete and grow through advanced services. To realise those opportunities, it’s important that companies exploit the implications of new trends together with their customers and explore what the impact of societal trends might be for future needs. The megatrends explored in this research show a significant potential for companies to develop advanced services and strengthen the competitive position of companies. However, some key factors need to be taken into mind when manufacturing companies take the decision to invest in developing advanced services.

1. Before companies can start developing advanced IoT enabled services…..

• Top management needs to support the development of advanced services and provide clear leadership to staff in the mindset appropriate to the development of the new capabilities[/unordered_list]

2. Stay close to your customers to identify opportunities for advanced IoT enabled services by understanding how value perception and needs are impacted by societal trends

• Understand your companies role in tackling global social and environmental challenges
• Explore the opportunities of the ‘circular economy’
• Recognise the impact of IoT on your customer's value chain

3. When you are developing the business models around advanced services make sure that:

• The tacit knowledge of the very experienced but ageing workforce is transferred into technical solutions to deliver advanced services
• Your company thinks global, but acts local and delivers a superior customer experience

Want to know more? Download an executive summary of this research and learn how the other societal trends can bring business opportunities. @ http://fs-ne.ws/dOId30iepLh

Noventum have been a trusted pillar of the service management community for a long, long time and now they have established an excellent process to allow field service companies establish which FSM vendors best meet their needs. René Boverhuis guides us through their methodology...

A Field Service Management (FSM) solution is a key enabler for a service business to deliver best-in-class customer experiences, maximise business efficiency and achieve strategic goals.

Selecting the most suitable FSM solution can be a daunting task as there are numerous products on the market, each with its own strengths and weaknesses, and no single product can support complete end-to-end service processes.

A complete service solution will almost always consist of a combination of several products, some of which may already be implemented, except in a greenfield situation. Organisations thus have to accommodate their existing IT strategy and architecture in which the FSM solution should be integrated.

To select a FSM solution, Noventum recommends a seven-step approach:

1. Define strategic business objectives and goals

Before starting to select a new FSM solution, it is important to understand why an organisation needs this and what the organisation wants to accomplish with it.

Questions that need to be answered include:

• What direction is your service organisation heading?
• What type of services will be provided to your customers three to five years from now? Outcome based, predictive maintenance, etc.
• What are the main business goals in terms of growth and profit margins?
• Why not strive for a standardised global operating model and supporting service IT architecture?

It is important to understand the strategic objectives and goals as the new solution should be able to provide the functionality to enable the business to achieve the goals and be able to support the services that will be launched in the future.

2. Identify key service characteristics and service process scope

The type of service contracts that are offered, the type of market the organisation is addressing and the way these services are delivered greatly influence the required capabilities that a FSM solution must provide.

To get an understanding of the nature of the service business that needs to be supported, insight into key service characteristics is needed, including:

The different service contract types that are offered.

Service market as a B2C service organisation has quite a different dynamic than a B2B.

How is service delivered? By using internal resources, subcontractors, outsourcing of service activities, or a combination? Does this differ per county, region or business unit?

Size of the service business (if possible broken down per country, region or business unit) in terms of:

• Service revenue per year
• Total number of service contracts, service requests and work orders per month
• Number of technicians, dispatchers, service managers
• Value of service parts consumed per month
• Total number of installed base objects

The functional scope required of a FSM solution is dependent on the service processes that the organisation needs to have in place. To be future proof, the processes required in the future also must be identified to be able to support new type of services that are planned.

At Noventum we use the Service Capability & Performance (SCP) Standards as a framework to identify the business capabilities that should be included in the scope. A good way of determining which service business capabilities are relevant for an organisation is by identifying key end-to-end business scenarios and for each business scenario determine which SCP capability is touched by it.

Using this approach, a high-level business capability model can be created relatively quickly. This can also be used as a starting point for the definition of a new global standard.

3. Design High-level Service IT Architecture

Most organisations already have IT applications in place that support part of the service business, often this differs per geography or business unit.

To determine which elements of the existing IT landscape can continue to be used or which applications are no longer needed, it is important to fully understand the landscape. It is important to understand:

• Which applications are currently in use?
• Which processes are they supporting?
• What the technical state of these applications?
• How satisfied the business users are with the current applications?
• What are the gaps in terms of functionality?

This analysis can then be used to design a high-level vision of the future service IT architecture which can be used to: decide which applications should continue to be used, identify the gaps for which a new solution must be found, and determine any dependencies that should be considered.

This also includes a mapping of the service process onto the new architecture. For example, it could be the case that the existing ERP implementation is used for production and installation at customer sites. The initial installed base then is created in the ERP, then transferred to FSM solution and maintained in the FSM solution from that point on. Using the new High-Level Service IT Architecture, the process scope for the new FSM solution is further refined.

4. Define functional and non-functional requirements and constraints

Now that the business processes have been defined, the next step is to define the functional features that the new FSM solution must have.

To define the required features, Noventum’s SCP Functional Reference Architecture is used. The reference architecture consists of a set of functional domains, each with a set of typical features. The processes from the SCP Standards are mapped to the functional domains and therefore we know which ones are relevant for the process scope (fig.1).

This results in a comprehensive list of features that the new solution must support. This list is prioritised according the business goals and strategy.

Besides the functional requirements, the non-functional requirements and constraints are also defined. This includes the typical things like performance, security, availability, flexibility and interoperability, and constraints that define the context and environment in which the new FSM solution must be deployed.

5. Identify short-list of FSM products that match requirements and constraints

The functional scope, High Level service IT Architecture, functional and non-functional requirements and constraints can now be used to the define a short-list of products.

Noventum has good understanding of the FSM products on the market today, which includes that feature they provide and how they fit in existing architecture. We regularly publish our FSM Reality Check (fig.2) which ranks each FSM solution in terms of the ability to provide business benefits vs. the risks and costs involved in implementing and operating these solutions.

Using our knowledge of the FSM products, Noventum can help organisations to quickly reduce a long-list of potential products and vendors to the two or three most suitable ones, eliminating the need to go through a lengthy RFI process.

6. Evaluate FSM products and vendors

For each of the vendors and their product on the short-list it needs to be evaluated into detail to what extend the product can address the functional and non-functional requirements, whether it fits into the existing/future IT architecture and if it can meet the constraints.

To significantly shorten the time required to select a solution, Noventum often assists organisations in defining the RFP (using the functional scope, non-functional requirements and constraints) and evaluating the RFP responses, demonstrations and presentations.

As part of the process Noventum believes it is important that reference visits are part of the selection process as this provides the opportunity to hear from peers about their experience with the solution.

Reference visits also provide insight into why an organisation selected their specific solution and to give confidence that the solution works in practice.

7. Conduct Proof of Concept

High user adoption of you FSM solution is a critical success factor and there might be some essential specific functionality for a service organisation that needs detailed evaluation.

A Proof of Concept is a good way to validate whether the technicians are comfortable using the mobile FSM app to do their job, for example. Other examples include testing contract types, SLA’s or complex preventive maintenance schedules.

Together with Noventum and the product vendor, some of the key business scenarios defined in Step 2 can be implemented in a short period of time and validated with a select group of stakeholders.

The Proof of Concept is thus used to confirm that the selected product indeed is the best suitable FSM product to support the service processes and enables the service organisation to meet their strategic goals.

Conclusion

Although selecting the right FSM solution for an organisation is a daunting task, by using the right frameworks, knowledge of the service business and FSM market, it can be done in a much shorter time frame and cost. While an organisation can be sure that they select a solution, which is able to support their service business now and in the future.

 

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Noventum has released its FSM Solutions Reality Check report, a comprehensive overview of the leading Field Service Management (FSM) solutions to help organisations select the solutions best suited to their requirements.

According to research and evaluations conducted by Noventum, Field Service Management solutions provided by ServiceMax, Microsoft and IFS are best positioned to provide maximum business benefits to service businesses while the potential risks and TCO are the lowest.

Noventum evaluated vendors and their products by assessing their functional and non-functional capabilities against the industry leading Service Capability & Performance (SCP) Standards to determine whether the solutions can support the key businesses capabilities service businesses need to be successful.

Service organisations that are planning to select a new FSM solution can benefit from the knowledge and data collected to select the best FSM solution for their specific needs and for their specific situation. By using Noventum’s evaluation framework based on SCP this can be done in a much shorter timeframe and with a better and completer set of service requirements and evaluation criteria than is typically the case, ensuring that the selected solution can support all service processes in scope.

 

Through our extensive customer engagements, via product demos and customer references visits, Noventum validated the capabilities of service management solutions to ensure that they meet client’s needs in real world situations.

Visit Noventum’s website to request a copy of the report (http://noventum.eu/whitepaper/fsm-solutions-reality-check).

Join Noventum at Field Service Europe on 6-8 December 2017, with over 55 heads of service speakers.

You can register today http://fs-ne.ws/nCix30gid3o for Field Service, including the including the Service Industry Standards Day with a 20% discount (Service providers only) when you indicate the registration FSEU17FSN

 

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Who are the most influential people in the global field service sector that you need to pay attention to in 2017?

The Field Service News #FSN20 is our list of the individuals we believe will be key influencers in our industry across the next twelve months. Those included in the list have been selected by our own panel of industry insiders, who were given the simple criteria of identifying people who will have a significant impact on field service thinking.

However, more than just an annual list of 20 individuals the #FSN20 has grown since it’s launch to become a true celebration of excellence and innovation within our industry.

There are some familiar names and some new faces on this years list and as always we don’t expect everyone to agree with our selection – at it’s heart the #FSN20 was conceived as a tool to get everyone in our industry thinking about who it is that they have come across in the global field service sector that has made them think, who has made them question the accepted paradigms, who has inspired them to do just one little thing more in their own day to day role.

The #FSN20 is not just about the list our panel has put together. It is about fostering discussion that celebrates the unsung heroes of the field service sector. So look out for the online version of this list as well to take part in the debate.

But for now, ladies and gentleman and without further a do, in no particular order, we are pleased to introduce the #FSN20 of 2017…

 

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Click here to see page one of the 2017 #FSN20

 

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Click here to see page two of the 2017 #FSN20 

 

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Chris Proctor, CEO, Oneserve

With their relatively niche operating background primarily serving the UK local government and housing sector Oneserve may not be a company that are as well known as some of their competitors within the FSM solution space, however, there is no denying that in Proctor they have a CEO who isn’t afraid to ruffle feathers.

He has called for the Field Service Management software industry to stop “holding innovation hostage” and under his leadership the organisation have won some significant contracts away from their ‘home turf’ of the housing sector including Pay TV leaders Sky and construction giants Kier.

Having been promoted to CEO from Marketing and Sales Director in just 8 months with the company Proctor is a young, dynamic leader who is not afraid of controversy if it means raising awareness of issues within the industry.

 

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Professor Andy Neely, Head of the Institute for Manufacturing, Cambridge University

Professor Andy Neely is Pro-Vice-Chancellor: Enterprise and Business Relations at the University of Cambridge and also Head of the Institute for Manufacturing (IfM) and Head of the Manufacturing and Management Division of Cambridge University Engineering Department.

In his role as a Founding Director of the Cambridge Service Alliance he is widely recognised for his work on the servitization of manufacturing, as well as his work on performance measurement and management and as such is often seen chairing sessions in the field service sector.

 

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Hilbrand Rustema, Managing Director, Noventum Service Management

As service management consultancy spanning three continents. With over 200 successful projects and a proven track record of improving growth and profitability Noventum are a tour de force and are firmly established as the leading consultancy within the field service industry.

Hilbrand Rustema has been a driving force in that development and continues to lead the business having been at the heart of evolving service thinking for many, many years.

 

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Jan Van Veen, Managing Director, Van Veen Business Innovation

One of the founding partners of Noventum, Van Veen is now working under his own brand and is currently developing a framework for companies to be able to develop continuous momentum based on a series of detailed benchmarking and researching projects.

A broad and ambitious project, but Van Veen has the background and insight to be able to deliver what should be highly powerful business tool.

 

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CEM has been identified as a  key driver of customer loyalty and profitable growth, is a trending topic in the manufacturing industry. But for many manufacturers this is still a greenfield operation. So where do you stand and how do you get started?

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