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An executive summary of Noventum’s new publication, co-created with the participants of Noventum’s Service Innovation Programme and the Aston Centre for Servitization Research and Practice...

Looking at the industry trends, it appears that IoT, Industry 4.0 and product digitalisation will substantially affect competition, profitability, and the structure in many industries - as did the previous wave of Internet-enabled IT.

To be prepared and to define their strategy, companies must understand how smart, connected products impact industry and their service organisations, as well as the way companies do business. Service business is an essential part of most new business models that companies are implementing. Within the service business, it appears that Customer Business Related Services are driving the growth, while Product Related Services will shrink, if not managed very differently than today.

The major trends that appear to drive the development of advanced services are the;

1. Growing demand for Customer Business Related Services
2. Customers wanting to ‘’consume’’ technology, instead of ‘’owning’’ it
3. Increasing importance of Brands
4. Growing need for Customer Experience Design
5. Increasing globalisation
6. Implications of the Internet of Things (IoT)
7. Companies recognizing the need to capitalize on Industry 4.0; and
8. Companies requiring to develop Big Data Analytics capabilities

These industry trends are affecting the way manufacturers have to compete, it will impact their profitability, and it will change the structure in many industries.

In order to increase revenue from advanced services, companies face (amongst many) four top challenges:

1. How to manage the consistency of service delivery across regions and geographies in order to deliver a consistent customer experience, increase productivity and optimise the service delivery.
2. How to adapt sales skills, methodologies, systems, measurements and incentives to move from a product selling to a consultative sales approach and so support the sales of advanced services.
3. How to manage the development of a new services offering so that the value proposition to customers is improved and new services are brought to market faster than the competition can do it.
4. A model was developed that shows how most companies follow a similar path of evolutionary steps to reach a state in which the most valuable, fast growing and most profitable services are being sold and delivered. It is very difficult for companies to skip a step, as the capabilities of any of the previous steps are needed to be successful in the next. 

Noventum’s new book elaborates in detail on the required changes and the capabilities that a service business must develop in order to go from a reactive to a pro-active service business. As the maturity of your service organisation develops, the type of services you offer evolves.

And by differentiating yourself based on your brand, you can provide more value to your customers, while allowing for bigger margins.

The main areas to address for running a successful business are:

• Customer Journey
• Customer Value Perception
• Business model
• Company Value Management
• Service Propositions
• Marketing & Sales Model
• Delivery Model
• Knowledge Management
• Technology Management
• People Management
• Customer experience management

Generally, the participating companies felt they had a reasonable understanding about the mega-trend of manufacturing digitalisation and the service opportunities it represents, but had not yet transformed this into a sound strategy, roadmap and execution. If they had, they had actually just started.

At the end of one of Noventum’s Service Innovation Projects, titled “From a Reactive to a Proactive Service Business”, a workshop was facilitated, titled ‘Challenges and barriers of implementing advanced services’.

All participants were asked to indicate their main challenges in moving forward to a more service centric (or even customer centric) company value proposition.

Then challenges were categorised by themes. The three biggest themes were:

• Skills, in particular sales skills
• Company culture and
• Organisational buy in, in particular winning the support of the corporate executive board

Participants felt that the market and customers are (or seem to be) able to accept the service transformation. Most of the challenges to overcome are internal. Many companies have begun to make real progress, accelerating their pace of change, while slow-moving competitors fall further behind.

 

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Across December and January we asked our readers to nominate candidates for the inaugural #FSN20, a list of the twenty most influential people in field service. We received nominations from across the globe through social media, email and even a phone call or two directly into the news-desk.

Armed with a list of candidates, a Field Service News panel selected the final list of twenty based on the number of nominations, their impact on the industry (past, present and future) and their sphere of influence in both the physical and digital world.

After much long deliberation, heartful debate (read arguing) and enormous amounts of coffee we managed to whittle our list down to a final twenty which we pleased to present to you here the inaugural edition of the #FSN20. You may not agree with our selection and if you don’t tell us, tell your friends, tell your colleagues, hell tell the world – because at the heart of it that’s what this list is all about, getting people talking about excellence in field service and raising the profile of those leading us to a better future.

We are now announcing who made the list in alphabetical order in four sections across four days. So without further ado we are pleased to bring you the final five of the #FSN20

Aly Pinder, Senior Research Analyst, Aberdeen

One of the most prolific authors in the industry and also one of the nicest guys in Field Service to boot. Pinder had more nominations for this list than any other candidate, which speaks volumes.

Having written or co-authored over 50 research reports, and benchmarked more than 4,000 service executives across 5 years with Aberdeen, he writes and speaks with authority and understanding and is widely respected across the market.

Follow Aly @Pinderjr

 

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Bill Pollock, President and Principal Consulting Analyst, Strategies For Growth

Pollock is one of the industry’s most respected authors and commentators with a long and distinguished career focused on field service.

Having worked for Gartner, Aberdeen and been a founding partner of The Service Council, his analysis is highly sought after and he has authored some of the most detailed research available in the industry. His white papers, blogs and posts are widely read across the globe.

Follow Bill @SFGOnService

 

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Hilbrand Rustema, Managing Director, Noventum Service Management

Co-author of seminal service book, “Service Economics” and managing director of one of Europe’s most prominent Service Management consultancies, Noventum Service Management, Rustema has been at the heart of evolving service thinking across the continent for many years and remains at the forefront of the sector today.

Follow Hilbrand @bynoventum

 

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Steve Street, IT Security & Infrastructure Architect, IBM

Steve Street, IT Security/Infrastructure Architect, IBM – In a long industrious career with computing giants IBM Steve has been an excellent servant to service science. He has worked with many of the key leaders and thinkers in this area including Professors Irene Ng, Scott Sampson and fellow Cambridge University Alumni Andy Neely on a wide range of initiatives to unite academia, government and industry in the development and promotion of service science as a discipline.

He remains a key figure in the evolution of the area and his work is shaping the way leading organisations are seeking to deliver services.

Follow Steve @SteveDStreet

 

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Martin Summerhayes, Head of Strategy and Business Development, Fujitsu

One of a few on the list that started their a career as a service engineer, Summerhayes’ career has been quite remarkable.

He was the man who devised HP’s service strategy which became a billion dollar proposition, he has advised London’s Metropolitan police force working with local and national government, paramilitary and commercial companies, before taking on his current role as Head of Strategy for Fujitsu. And he still finds time to take a proactive role in promoting service excellence in the UK nonprofit group, The Service Community.

Follow Martin @martinsummerhay

 

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Special Mention - Steve Downton, Downton Consulting

Whilst Downton sadly passed away in 2013 his long-standing legacy remains both in the approach he developed to service as outlined in the book, ”Service Economics”, which he co-authored with Hilbrand Rustema and Jan Van Veen, as well as in the non-profit organisation he created, ”The Service Community”, which continues to operate as a significant organisation dedicated to sharing best practices amongst service companies operating the UK.

Steve’s impact on the field service industries will be long felt.

 

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See the rest of the list here: Part One, Part Two, Part Three

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Field Service News regular Nick Frank returns to his series looking at various case studies from companies he has worked with both past and presesnt to help us better understand best practice in service. This time out Nick takes a closer look at customer satisfaction...

Do Satisfaction surveys or Net Promoter systems really tell you how your customer’s experience your company? When you are satisfied with your car, does it mean you will buy the same brand the next time round?  The reality is that tools such as these are better than no tools at all! They do bring a focus on the customer by employees. . But to really get insights in how customers currently experience your brand in terms of needs, expectation and value perception,  requires  more intimate forms of communication and most importantly a change in MIND-SET.

Industry leading companies tend to exhibit an OUTSIDE-IN approach. They actively search out their customer’s thoughts and act on them. They use more sophisticated methods to capture deeper customer insights. They are mature enough to take on-board comments, which might be negative or not fit their agenda, because listening and action are in their DNA.

The on-stage/back-stage model: 

Typically these companies recognise that customer experience is not just an outcome, but can be designed into the service delivery model. Key is identifying the key factors influencing the customer’s perception at each touch-point. The On-stage/Back-stage model is often a useful tool to do this.

These are easy ideas to accept, but a recent consulting experience really brought home to me that for many organisations it’s much harder to put into practice.

We were working with several very successful capital equipment suppliers with very similar situations:

• They want to gain deeper insights into how customers experience their service business.
• They desired to move to the next level as they moved through a period of service transformation.
• They want to go much deeper than their own Net Promoter Score / Customer Satisfaction programmes.[/unordered_list]

In one of these projects, we dealt with a division where a significant proportion of the revenue came from the consumables that supported the product. They decided to invest in a programme where they recorded their staff’s interactions at the touch-points and then interviewed various key stakeholders of their customers.

This brought some unexpected observations within the buying process. The buyers recognised and appreciated the company’s knowledge and professionalism.  But they felt frustrated that the Sales people did not bring any value to the table other than taking orders for consumables.  They actually felt let down, which significantly harmed their overall perception of the brand and encouraged them to look for new vendors.  They made explicit statement statements such as  ‘We want a leading Solution Provider and not merely a leading Product provider’.

Don't be defensive - all feedback is useful

The challenge for this organisations was to take the feedback at face value, not get defensive and take the actions needed for improvement. But this market leading organisation struggled to do this. Why?

Often organisations are structured in silo’s with very specific targets, which are not necessarily aligned with customer value. For example, sales people who meet their incentive plan from significant sales of consumables, are not enticed to walk the extra mile and deliver more value, as this could prevent them from meeting their individual targets

• A focus on short term financial targets stimulates attention on low hanging fruit which directly drives financial results
• Wanting to Stick to the product related values and competencies
• Not being able to accept another perspective on the world.

In truth it’s probably a mixture of the above. The moral of the story is that if you are not ‘truly’ open to what your customers need and say, or are not committed to acting on the feedback, you are probably stuck in an IN-SIDE OUT world. It’s hard to innovate for your customers and provide an excellent experience, when you are only focussed on internal issues such as the next quarters sales or your next product’s features.

And we know that the OUTSIDE-IN mind-set is more likely to lead to growth. Recent research shows that companies who push themselves to gain insights into customer experience from a wide number of sources, are more likely to achieve higher corporate growth. But its not surprising that those companies that make this effort have a better understanding of what is valuable to their customers and how to deliver a customer experience that will drive loyalty.

For more information on how to develop your MINDSET and Design Customer Experience into your Service Propositions, why not look at some of our courses on Service Leadership(23^rd Sept in the UK) and Service Design.

As the organisers of the Field Service Solutions Theatre at this year’s Service Management Expo, Field Service News was on hand to speak exclusively to a number of leading industry professionals straight as they stepped off the theatre podium. In this video series we are pleased to bring you the highlights from the Field Service Solutions Theatre.

Here we hear from Nick Frank a senior service management consultant with Noventum Service Management and a regular field service news columnist. Frank discusses his presentation on "Growth through Services" which was based on the results of a year long study held by Noventum Service Management trying to understand what are the key drivers for push a business forward and how does service relate to that?

 

Continuing his series looking at case studies of how service companies adapt their culture to improve their productivity Nick Frank, service management consultant with Noventum Service Management looks at how happiness became a key tool for Dutch firm Hutten...

It sounds so obvious that people are the key to any business change, so why do we often overlook their importance.  Is it because managers are so wrapped up in their strategies and actions plans, that they forget talking to customers and employees requires a different kind of language?  That the ‘just get it ***** done!’ mentality does not achieve the results they want.

Whatever the reason, the lesson we learn time and time again is that it’s your ‘people that make you stand out from the crowd’. So how do you then make sure that people development and communication is a key part of your plan.

Some companies take a very novel approach. Take Hutten, a leading Dutch kitchen service provider. Pascal Verheugd their HR director told us about their unique approach;

“Most companies, particularly in Holland, are driven by productivity and profit margins. Here at Hutten, we thought differently. We wanted to position happiness as the central driver within our company.

Working from the ground up, we engaged with all team members to develop our mission to promote the values of happiness, collaboration, transparency and sustainability across our organisation. This was not just a top down initiative, and neither was it only internally generated. Our partners, suppliers and clients are key stakeholders, so these values were generated also considering their input from the outside in.

This ‘happiness vision’ could have been difficult to justify on board level but in our case, the CEO, Bob Hutten and I were singing from the same hymn sheet. We were both of the belief that social innovation should be the most important goal for every company and that managing targets, bonuses and profitability simply isn’t enough.

People have to want to work for you. If they share the same values internally and are happy working together then it stands to reason that their happiness will create better productivity and that this will filter through to customers in the end.”

Now this may be a very different approach, but I am sure there is a lesson here for us all in both our professional and work lives!

So if you are interested to know more more about the importance of people in achieving your goals, you can get more information from this link, or you can sign up for our next UK Service Executive Leadership Course in September, where you will get an opportunity with your peers to develop your thoughts on people and leadership…and perhaps have a a bit of fun yourself.

 

 

The question of how to grow profitably is high on the strategic agenda of most companies, yet only few are able to realise it. In today’s world, many businesses are struggling to maintain their existing revenue and profit margins, let alone achieve ambitious growth rates. But there are also many exceptions!

Given that significant variations appear in the growth strategies companies choose and the role services play within this strategy, Noventum set out to answer the following two questions:

1. What are today and tomorrow’s key drivers for profitable growth?

2. What role do services play in respect to growth?

The research comprised of in-depth interviews and a survey conducted amongst board members, service managers and directors, primarily from B2B product-orientated companies across a wide distribution of industry sectors and company turnovers.

It was quite clear that companies exhibiting higher growth rates saw ‘services’ as one of their strategic solutions to achieving growth and not as a challenge in its own right.

We found that these companies tended to exhibit 4 key capabilities:

1. Deployed a wide portfolio of growth strategies

In order to outperform competitors on revenue growth and margins, companies should pursue a broad portfolio of growth strategies and not just the traditional few of  (1) Product growth in mature markets; (2) Product growth in emerging markets; (3) Product Related Services. When these 3 strategies are broadened by Advanced Services focused on solving company’s business problems, or improving a customer’s processes, revenue growth was generally above 11%. In addition these companies were more likely to achieve gross margins across the whole business of greater than 40%.

2. Innovate for customer value

Key to growth and profit margins is a focus on innovation in order to optimise customer value. Successful companies do this by employing multiple tools to glean customer insights and maintain a balanced portfolio between incremental and ‘game changing’ innovations.

3. Demonstrate Organisational Agility

We defined agility as the capability, dedication and culture to rapidly innovate on a continuous basis. The companies that achieve high growth are innovative in nature which leads to change. But all this change creates internal friction and conflict . Hence successful high growth companies develop a culture that can move and change rapidly giving the oganisation an agility to adapt to new ideas

4. Strategic alignment between service- and corporate strategies

Companies need to develop a clear long-term vision as to how to develop their service business, ensuring each step delivers a tangible and credible contribution to the overall performance of the company. Focusing on the overall value of service for the company will secure corporate commitment and thereby further enable (service) business success.

The bottom line: Advanced services are a key differentiator in driving companywide revenue growth.

If you are interested in understanding more about how advanced services differentiate the winners from the losers, you can down load  a summary of the research finding using this link.  Or if you would like to participate in our follow up research, you can join Noventum’s Service Innovation Programme on LinkedIn. When people subscribe they will receive our newsletter including the events updates such as the Servitisation conference in May at Aston Business School.

I will be presenting the research findings at this event, as well as at the Service Management Expo at the ExCeL in June.

 

 

Welcome to the fourth edition of our Field Service News podcast. This month we are joined by Noventum Service Management consultant Nick Frank. 

In this exclusive interview Nick talks extensively about a recent study he and his colleagues have made into what are the key drivers for growth for businesses and the role service plays in this.

This podcast is also accompanied by a great article written exclusively for Field Service News by Nick which you can find here

Nick will also be joining Field Service News in the Field Service Solutions Theatre at this year's Service Management Expo being held in London's ExCel on June 17th, 18th and 19th. So if you want to here more from Nick then make sure you get your complimentary 3 day pass by clicking this link

 

 

‘Congratulations! You grew your service business by 25% last year…but how much money did you make?!’

This is the dilemma we often hear when talking to disappointed and frustrated managers.

In our experience this is especially true for organisations undergoing rapid change or growth through acquisition. Their Service Delivery Processes have not been built on a solid foundation and they experience large variations in how services are delivered from the excellent to the appalling.

Increasingly there are many new service management and mobile solutions on the market that bring transparency to the operations. Although they are a critical ‘enabler’, they do not address the root cause of the problem. We know that for a company to successfully industrialise its back office and deliver a consistent customer experience, it is key to have a clear vision of the:-

 

• End to End business processes
• Service management practices
• People competencies
• Performance management systems
• IT requirements

 

These building blocks are not only the basis for ensuring the existing service delivery model can be profitable, they will also de-risk the introduction of new service offerings.

Take one of the company’s that has featured in this blog series, Bobst SA.

Stephan Maerz, Head of the Service Business Unit faced a classic post acquisition situation. Bobst were working with seven different brands globally, all functioning under different management models; services weren’t aligned, standards and pricing were disparate. If the answer to growth lay in their services, they needed a global plan.

In March 2012, the Bobst executive team decided to create a single One Bobst brand. In July 2012, they started to define and execute a global service transformation programme. The brand-driven strategy they developed required a globally consistent customer experience, and that meant standardisation.  But unifying operations however, wasn’t so simple. The solution? Create a Book of Service Standards, a global undertaking requiring agreement from every regional and functional head. Modes of working were so variable, the project could have taken years. But by working with a 3^rd party with access to proven models and best practice, it took only three months to agree on one model.

A lot of people said it couldn’t be done and that a global service strategy would not work on a local level. Bobst demonstrated that by using a component based service factory model, it is is possible to take a fragmented operation and build a common documented vision of how the business should operate. In this way Bobst has built the basis for a sustainable and profitable service business. The next challenge is to build a completely new IT architecture to make the book of standards an operational reality.

If you would like to know more about this case study or the Component Based Service Factory, use this link to go to the Noventum website at www.noventum.eu.

Or you can meet us in person in May at the Servitisation Conference at Aston Business School or the Service Management Expo at the the London ExCeL where we will be sharing more experiences on how to achieve business growth through services.

Nick Frank is a service specialist with Noventum Service Management

Nick Frank, Consultant with Novetnum Service Management continues his exclusive series looking at building revenue from services...

Selling services, how difficult can it be? Talk to a product sales person: ‘Piece of Cake, but…’.     Talk to the Services Sales specialist about their product colleagues; ’They don’t understand…. all they care about is the big deal’

In truth it’s not black and white, which is why it’s not so easy. Product Sales people can be very successful at selling services, if they are packaged as a product. For example I have seen great results for well defined service maintenance contracts, sold up front with the product. But I have also experienced complete frustration with some product sales people, as they struggle to sell managed services to more senior decision makers.  Generally this because they do not fully understand the strategic growth issues the boardroom faces and focus on service features.

To find the best path for your business requires an in depth knowledge of your customer’s buying processes, your own service propositions and your people. Get the answer right and it’s possible to create tremendous momentum, where you can start to see growth rates of between 20-40% per year in your services business.

Easy words, but what about the reality. Lets look at the experiences of a world leader in packaging equipment, Bobst SA based in Switzerland. The Head of the Service Business Unit, Stephan März saw the opportunity to transform the Services into a sustainable engine for long term growth. Two years in and Parts & Service is starting to push past 6% annual growth. This growth has been led by a focus on services where contract penetration has doubled. Although he is mid- journey, some of the lessons Stephan has learned about energising service sales are a good guide for anyone making this transition:

 

1. Technology leadership is not enough anymore: Spend time with the product sales force repeating this message. ‘Good Services are key to selling more Machines’. They will get it in the end, especially when you look at their incentives!
2. Focus, Focus, Focus: Creating a separate service team gave service an identity and motivation. Bobst had gone as far as creating a separate Business Unit, which allowed Stephan to demonstrate who was making the money…and it was not the products! Dedicated marketing, sales and supply chain allowed him to develop and implement very effective service proposition quickly. A focus on sales people skills; who were hunters or farmers. And often a successful approach for complex equipment manufacturers, leveraging  the customer perception of Regional Service Managers as trusted advisor’s, and using their skills to drive Service Sales.
3. Communicate, Communicate, Communicate: It’s a major cultural change, but change does not happen overnight. Even though Stephan had 100% commitment from the CEO and the Executive team, he still had to work through the silos issues, dealing with jealousy, finger pointing, remuneration, profit & cost allocation and yes, car policy. Bobst worked very hard on team work with their product Sales colleagues, making sure roles and responsibilities were clear; and its beginning to work!
4. Patience, Patience, Patience: Business is impatient for results, but service sales is in fact part of a long term transformation programme, where the business model, processes and people all need to be challenged. It takes time commitment and management skill to achieve the desired relationship and results.

If you are interested in how to sell service more effectively, why not look to attend Noventum’s next Service Sales Course or look at our article on ‘How to boost Service Sales at this link