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Andrew Bolivar, Senior Consultant at Ultra Consultants explores how a firm understanding of Best-Practices can help field service companies increase efficiencies...

Effectively managing service technicians in the field has always presented a challenge for companies offering on-site customer service. The complexity of efficiently delivering those services has been a recurring problem, but technology and an enlightened approach to business process improvement provide the enterprise with a solution.

Modern technologies that streamline the management of field operations transform processes for employees as well as customers and key stakeholders.

However, it’s not merely embracing new technology that will enable the enterprise to optimize its field service operations; it also requires a comprehensive analysis of existing business processes and a strategic plan to create the desired future state of operations.

The Traditional Perspective

Field service was traditionally considered an extra, post-sales service, often operated as a low priority cost center with limited potential for expanding business. In today’s competitive marketplace, many companies differentiate themselves by providing additional services that wrap-around traditional product offerings.

Legacy field service management (FSM) solutions frequently lack a comprehensive suite of services. Many companies have cobbled together different solutions to secure all the functionality needed to operate efficiently.

Field service management has evolved into an essential tool which provides tremendous value in generating additional revenue from new and repeat business from existing customers.

Today’s Approach Leverages Technology and Improved Business Processes:

The introduction of field service mobile apps, GPS navigation and email alerts has ushered in a new era for field service. It has become a high priority standard and is a key differentiator when it comes to effective business operations and ongoing customer relationships.

An end-to-end FSM solution may include scheduling and routing optimization, vehicle location, driver logs and hours-of-service tracking, inventory management, field worker management and other benefits like reporting and analytics.  All combine to provide a comprehensive view of the asset’s service history throughout its lifecycle.

Current FSM solutions make it possible to maintain a 360-degree view of customer sites, equipment and service coverage. Time between call receipts and job assignments can be shortened. You can be assured that the right technician, with the right tools, and the right skills and certifications, will arrive at the right time and complete the required service without delay.

Automated Business Processes Provide Improvements in Four Key Areas:

Here are ways that an automated FSM solution can improve business results

1. Improved performance:

• Tracking the root causes of field service requests can drive better quality analysis and identify product design and/or business process improvements.
• An integrated field service management system can provide visibility of new installations or sales and ensure continuous contact with customers at critical phases of their engagement with the company.
• A full view of an asset's lifecycle helps ensure proactive service and warranty management calls

2. Increased productivity:

• Mobile field service applications optimize travel and scheduling for field technicians.
• Integrated warranty management and cost tracking eliminates wasted time and reduces receivables collection time.
• Visibility into your customer’s equipment and service history allow you to plan your inventory and tool requirements sooner – avoiding costly delays and downtime

3. Reduced costs:

• Real-time resource scheduling ensures quick response to customer calls and reduces the cost of idle time between on-site customer visits.
• Integrated, real-time service information reduces the waste in non-productive activities, improves service planning and reduces the need and cost for excess inventory allocated to repair.

4. Improved customer satisfaction

• Faster response time to customer calls and requests not only improves relationships with customers, but also enables opportunities to develop add-on and repeat business.
• Mobile applications and GPS enablement allow companies to alert customers of expected arrival times and access to data via mobile devices ensures field service personnel can be better prepared for each engagement.

Growth is Strong, with North American Market Leading the Way

The field service management market has been estimated to exceed $3.5 billion by 2019 with North America predicted to be the largest market size. Stratistics MRC expects FSM to reach nearly $4.5 billion by 2022 with a CAGR of 16.5 percent. Enhanced customer satisfaction and reducing operational costs are driving market growth while the emerging Internet of Things (IoT) provides ample additional opportunities.

Optimized Field Service Management Offers Huge Opportunity

Customers are increasingly expecting efficiency in field service – and are willing to pay a premium for it.

Leveraging the potential of field service automation with a proper analysis and deployment of appropriate business process improvements can increase the efficiency and productivity of field personnel, reduce costs and improve customer satisfaction.

Companies sticking with legacy systems that don’t optimize field service operations may find their customers increasingly seeking companies that leverage technology to better deliver customer service.

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It’s been several years since the official end of the Great Recession and we finally see organizations beginning to switch from a cautionary mindset to one of business expansion. However, business and revenue expansion initiatives need to be built on an infrastructure of growth, an area where organizations haven’t invested significantly in the previous 5-10 years. The desire for growth needs to be matched with investments in knowledge, technology, and innovation.

Sumair Dutta, Chief Customer Officer, Service Council explains why he anticipates that the next twelve months will be a period when service leaders begin to transition into new revenue models.

The Voice of the Service Leader:

In The Service Council’s annual trends survey of 2017, service leaders indicated that their top initiatives were focused on the improvement of customer management, the enhancement of service operations with the aid of business data, and an expansion of knowledge management across the enterprise.

In discussions with service leaders, it seemed like most were looking to get closer to their customers via better voice of the customer and listening initiatives to truly understand what these customers valued. In several industries, we also noted that organizations were balancing the demands and needs of various customers within an organization.

2018 initiatives are similar to those planned for 2017 and we don’t see a major deviation for service leaders. The push is to continue to drive operational efficiencies and business capacity with the aid of data, information, and technology. In parallel, organizations are looking to continue to ramp up their customer experience initiatives. As these initiatives get more mature and move from the listening phase to the customer understanding phase, organizations are hoping to use customer insight and data to support revenue generation efforts.

In discussions with service leaders, it seemed like most were looking to get closer to their customers via better voice of the customer and listening initiatives to truly understand what these customers valued.Voice of the customer efforts have been popular for several years and were championed by those in business to consumer industries.

In serving a larger number of customers and customer transactions, it was essential for these organizations to get a pulse of customer sentiment tied to service transactions and business relationships. The effort from these organizations was to improve operations to support better loyalty and retention.

Some would argue that the intent of these organizations is now shifting to ensuring a greater use of purchased product and service features, akin to the customer success model.

In enterprises that work directly with other businesses, the volume of transactions and interactions might not be as large; nevertheless, these interactions can have a high degree of value or impact attached to them. Historically, organizations were happy to capture feedback from their customers, but customer listening wasn’t a prioritized activity.

That has changed; as over the last three years, we have seen more organizations invest in voice of the customer and customer surveying programs.

More so, service leaders have also sought after resources to map customer journeys and identify key pain points in the service delivery ecosystem.

These customer experience activities have led to a handful of initiatives that strive to assuage frustrated customers, increase visibility into the service process, and reduce the effort required to access the service organization.

We now believe that organizations are fairly well equipped to deal with direct customer feedback but now need to dive deeper to truly unearth customer value.

Deciphering value requires a deeper look at customer feedback. Customer complaints and outreach are typically a channel for customers to share their expressed wishes. Answering expressed needs and wishes is essential to maintaining customer satisfaction, but addressing unexpressed needs is the key to differentiation.

This requires the ability for service teams to dig deeper into the reasons for a customer contact and what that specific customer might be looking to accomplish with the delivered information.

Addressing constraint:

The delivery of improved experiences must occur in a constraint heavy environment. The biggest constraint faced by organizations is the capacity of the service workforce.

This capacity isn’t solely tied to the quantity of service tasks that must be met, but in the quality of service interactions that must be supported by service personnel. In organizations with field service groups, there is a major focus on replacing retiring service workers and in retaining and replicating their knowledge for future generations.

Several industries are having major issues tapping into the next generation of service workers. Yet service requests continue and customers require a higher level of service.

Technology might seem like the best answer to addressing capacity issues, but the real solution comes from a better understanding of available service data. This explains why service leaders are looking at their major sources of data to identify:

• Inefficient service delivery processes
• Opportunities for automation and elimination of manual intervention
• Opportunities for enhancement of service worker output and coverage

The data that is available at the service leader’s fingertips can come from multiple sources. It may come direct from the product being serviced, and this mode of data communication continues to gain traction. Yet reliable data is already available from:

• Customer requests, complaints, and claims
• Point-of-service systems tracking work completion and resources required

Once operational improvement opportunities are identified, it makes sense to inject technology solutions to address these opportunities.

For instance, portals can be created to offer customers an easier path to service information or to the creation of a service request as compared to a traditional 1-800 call queue.

Routing technology can be used to directly connect customers to higher-level technical support. Video solutions can allow for assisted service resolution or improved diagnosis prior to dispatch. And just-in-time content can be sent to technicians to ensure that their service visits are successful.

We would recommend that service leaders also analyze and review data tied to the customer experience as much as they use data to prioritize operational improvements.We would recommend that service leaders also analyze and review data tied to the customer experience as much as they use data to prioritize operational improvements.

If customers indicate that the ease of access to service personnel is a priority for them, or that other areas in the service delivery ecosystem need improvement, then these could help service leaders rank needed changes.

The growth plan:

Operational and customer-focused initiatives are being paired with those that focus on business and service revenue. In discussions around service’s impact on the business, TSC has previously highlighted two revenue buckets that are directly enhanced by service.

• Service-Impacted Revenue – Revenue generated as a result of positive customer satisfaction, typically tied to up-sells, cross-sells, renewals, new purchases, and referrals.
• Service Revenue – Revenue generated from the sale of service products such as service parts, time & material work, or service agreements.

In pursuing growth in 2018, service leaders continue to support the first bucket of revenue typically driven by other parts of the organization but are taking aim at enhancing their overall service revenue contribution.

This expansion is typically supported in two ways:

1. Understanding customer use of current service products
2. Uncovering appetite for new service products

For those organizations with service agreements in place, it’s essential to understand which customers are covered by these agreements and which ones are coming up for renewal. Better visibility into coverage and renewal opportunities can uncover millions in revenue opportunities.

Once visibility is established, it is essential to identify why customers chose to stay away from service agreements or other products. This might uncover awareness or sales opportunities for the service enterprise.

In addition to actual coverage and renewal, service organizations must understand how customers are utilizing products and services. Awareness of customer adoption and usage will allow for improved account management opportunities. It might also yield ideas for net new services that can be valuable to customers.

Summary/Conclusion: the need for service innovation

While organizations are navigating what it means to be a digital business, they are also looking to new collaboration models with their customers to ensure longer and more profitable relationships.

For organizations to be more innovative in service, an internal transformation needs to occur around business leadership, around business measurement, and around the technology in place to support a new service business.In innovation-focused research conducted by The Service Council in 2017, less than one-half of organizations highlighted that their service businesses received as much focus on innovation, as did the other parts of the business.

For organizations to be more innovative in service, an internal transformation needs to occur around business leadership, around business measurement, and around the technology in place to support a new service business.

Service leaders must develop and fuel a culture that welcomes and accepts new ways of doing business, even at the cost of cannibalizing existing revenue streams. The promise of innovation is ripe at service organizations; it’s now time for service leaders to execute on this promise.

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Servitization has been an increasingly widely discussed topic amongst the Manufacturing sector for some time now, but whilst an understanding of the why is becoming widely accepted, the how still remains a mystery for many.

Here Christian Kowalkowski and Wolfgang Ulaga coauthors of the book Service Strategy in Action go some way towards demystifying the path to servitization...

With growing digital disruption across industries, the emergence of new business models, and the mounting pressure to deliver better business outcomes for customers, much has been written about what servitization of industries means and why firms need to move into the service space.

Yet, in times where increasingly ‘everything’ is considered as a service, decision makers still need to understand how to master this profound transformation and decide which concrete actions they must take to carry out this change.

Roadmap for service growth

In our new book, Service Strategy in Action (S2iA), we show how to shift your business from a goods-centric model to a service-savvy one.

For over a decade, we have accompanied numerous firms on their journeys from focusing on manufacturing and selling products to providing services and customer solutions in a broad array of industries and markets. We distilled what we learned into a 12-step roadmap which provides clear directions for crafting a competitive service strategy and putting it into practice. We recognize that all companies have different starting points and goals for their service businesses, so we tailored the roadmap to make it possible for managers to focus on the most pressing issues.

When service-growth strategies work, the payoffs are impressive, and firms often discover that their new activities make more money than productsWhen service-growth strategies work, the payoffs are impressive, and firms often discover that their new activities make more money than products. But for every success story, numerous cautionary tales remind us that this move involves more than a few cosmetic adjustments.

Without giving this strategic initiative serious thought, and without methodologically managing the change process, our research has found that the transition is doomed to fail and companies struggle to turn a profit from their service growth initiative.

Our intention in this book is, therefore, to provide decision-makers with the tools they need to craft a competitive service strategy and put it into practice.

Readers can employ our proprietary 12-step roadmap and use methods and frameworks for each step in their own firms to navigate the transformation.

The first part of the roadmap tackles the very foundations of a service business: why to move into services and how to embed a true service-centric culture in your organisation.

The second part deals with strategic issues: how to drive change and align your service strategy with corporate goals, and determine if your company is “fit-for-service.” Then we discuss how to come to grips with implementation: how to make the most of your existing services, innovate and create value-added services and solutions beyond your products, and build the service factory.

Finally, we show how to build the structure needed: transforming your product-centric sales force into a service-savvy sales organization, designing an organizational structure that promotes service growth, and aligning your interests with distributors and partners.

Many firms profited from our hands-on approach.

For example, in one project with a forklift manufacturer, we worked on transforming short-term opportunities in revenues and profits.

Together with the company, we reviewed more than 80 “low-hanging fruits.”

In one project with a forklift manufacturer, we worked on transforming short-term opportunities in revenues and profits.During the project, we identified 22 service activities that the firm had been providing free of charge, but that offered notable opportunities for revenue generation.

Over a period of several months, the company moved 14 of these activities along the journey from free to fee. For example, the manufacturer started invoicing for on-site equipment diagnostics, an activity previously provided free of charge by service technicians during customer visits.

The diagnostic fees for each customer were relatively small, so customers were widely willing to pay. In one test market, 80 percent of customers accepted the fees, resulting in substantial additional revenues in the first year in which this single initiative was implemented in just one country.

The various free-to-fee initiatives that the forklift manufacturer adopted after attending our workshop collectively led to millions of euros in added revenues.

Building a true service culture

Once you understand why to move into service and what the main roadblocks are, consider the culture that supports successful service enterprises and how to venture into the service space. In working with managers in industrial and professional services companies, we have seen over the years that a strong service culture serves as a powerful enabler of successful service growth.

Product firms that neglect to assess culture often struggle to implement services, and sometimes abandon the effort.Product firms that neglect to assess culture often struggle to implement services, and sometimes abandon the effort. A company can burn a lot of energy trying to move forward with services if its culture is product-centric, because culture underpins the organization.

We have identified six misconceptions that are hurdles to transitioning from a product-centric to a service-savvy culture. Here are the hurdles, and the signs that you still need to jump over them:

1. A product-centric mind-set — Your marketing efforts focus on things that come in boxes. Your accounting system is designed for physical resources. R&D works on solutions that are objects. You compensate your sales team based on boxes moved.
2. An absence of deep customer insights — You are using a distributer network, and those channels – not you — have the close and valuable relationships with your customers.
3. A lack of understanding and using the co-creation concept. You still think value is created in your factory and you can’t see how customers can partner with you to co-create a service product.
4. The right rules are factory rules — You are uncomfortable with the new rules of service production that upset traditional factory values like standardization and quality control.
5. It’s all about CAPEX — You are focused on capital expenditures and selling customers equipment, rather than helping them solve operational challenges.
6. Working through channels — You have built a strong channel network, and you don’t want to think that it may be necessary to assume more control over channels – even owning them outright.

Making the move to services, then, is a process that starts with the culture at the very core of your business.

Changing culture is never easy, and understanding that fact improves a company’s chances of transforming their product-centric culture to service-focused culture.

Four stages mark the way. Not every company starts at the same point, so it’s useful to figure out where your firm is on the map, and what actions and initiatives will be required to move to the next step.

• Step One: The Service Desert – Many firms are what we call services-myopic. They are aware of service, but they see it as an after-sale addon.Firms deeply grounded in the service desert often consider providing spare parts or repairing equipment as a substantial part of their service business. This is a narrow focus view that obscures opportunities that could result in double-digit revenue growth.
• Step Two: The Dark Tunnel – A company ramps up investment in service, but results are slow. It’s a “bitter pill” experienced by many companies going through this transition. Decision makers must understand that a critical mass of services is needed before reaping benefits. A short-term focus only can lead to sacrificing long-term growth.
• Step Three: Promising Light – In this stage, companies that seized service opportunities early on are experiencing quick wins.Some firms emerge into this stage without even going through the dark tunnel. When it happens, welcome revenues turn up, and the proponents of the services transition have powerful evidence to persuade others across the organization.
• Step Four: Bright Landscape – This is the destination! The company has devoted sufficient resources and people top its cultural transformation, and the new service business is a source of profit and growth.

Would you like to know more? Please visit us on www.ServiceStrategyInAction.com To find out more and continue the conversation.

We are sincerely interested in your comments and reactions and hope that our book will initiate a fruitful dialogue among our community on this topic we all are so passionate about!

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