Now is absolutely the time we need to start treating our Business to Business Accounts the same as our Business to Customers accounts writes Strategies for Growth^SM Bill Pollock...

Until only recently, the services purchase/acquisition cycle was a fairly closed-loop, highly structured, and oftentimes formal process. Potential clients obtained most of their decision-making data and informational input directly from the vendors, sought the top-level recommendations of published hardware and software buyer’s guides and directories, and picked up on the latest “buzz” at industry trade shows or via services trade publications – all were and still are powerful and rich resources (albeit, virtual trade shows will just have to do until the end of the current pandemic) .

This was the way services decisions had been supported and made for decades. But then, the Internet and social media changed everything – including the means by which information is gathered, reviewed, and analysed, the criteria by which potential vendors are evaluated and selected, and even the way in which customers position themselves as potential buyers in a largely buyer’s market.

The White House Office of Consumer Affairs has reported that dissatisfied customers will tell between nine and 15 people about their negative experience, with about 13 percent telling more than 20 people. Satisfied customers, on the other hand, will only tell about four to six people about their positive experience. Therefore, according to the report, customer service failures are likely to be communicated two-and-a-half times more often than customer service successes. As a result, services organisations will need to maintain a ratio of roughly 2.5:1 satisfied vs. dissatisfied customers just to break even in terms of word-of-mouth customer service feedback (i.e., 71 percent customer satisfaction). 

In all likelihood, customers will become even more critical – and communicative – about their service experiences in the future, based on the widespread usage of social media tools and technology devices. This presents a new front for services organisations to address in an increasingly social media-influenced marketplace; however, there are many other challenges that also must be addressed.

 

The Three Most Daunting Challenges to Field Service Organisations

The three most uniquely daunting challenges faced by services organisations over the past few decades include the following:

• Transforming themselves from manufacturer/OEM cost centers to strategic lines of business (i.e., with their own executive-level management and P&L responsibility).
• Shifting their operational focus from company-centric to customer-centric, whereby the customer represents the focal point of their universe.
• Learning how to treat their business-to-business (B2B) accounts with the same high level of service and support that other vendors use to treat their business-to-consumer (B2C) customers.

Surely there have also been other equally daunting challenges facing the services industry throughout this period, such as:

• The globalization of business operations
• A volatile cycle of economic upturns and downturns
• The proliferation of new technologies and applications
• The continuing shakeout of marginal performers, and the resultant consolidation within market sectors
• The widespread growth of social media for business purposes

However, while all of these business game-changers ultimately impact all business segments, the three challenges in the op list above focus uniquely on the services sector.

 

The Industry’s Success in Dealing with These Challenges

The main distinction between these two sets of challenges is that while the general influences of the economy, technology, market consolidation, and social media continue to impact all businesses from the outside in, the three challenges unique to the services industry are serving to transform services organizations from the inside out. As a result, the entire complexion of the services sector continues to morph on a virtually constant basis.

Let’s examine each of our three challenges with respect to their impact on the services industry.

Over the past 25 years or so, most services organisations have come to recognise that the “service as a cost center” business model is essentially outdated. Myriad books have been read – and conferences, seminars, and workshops attended – by enough managers to assure that the vast majority of services organisations have been able to successfully make the move from an historical manufacturer/OEM cost center to a more state-of-the-art profit center. All it took for this transformation to take place was for some of the larger and more progressive organisations to successfully bridge the chasm, coupled with the creation of third- and fourth-party organisations with no other line of business aside from service, and the ultimate introduction of a whole new genre of technology-driven, leaner operating upstart companies that did not carry the cost-center mindset of their predecessors. 

"Many of the service executives, managers, technicians, and general services staffs have never looked previously at their business accounts as “consumers” in the past..."

Shifting from a company-centric to a customer-centric focus was the next most daunting challenge to be addressed by services organisations on a wide-scale basis – though not always voluntarily. Some objection came from those steeped in a long-term R&D tradition where technology, manufacturing, production, and processes took precedence over customer service and support. Nonetheless, the need to focus on the customer has been satisfactorily addressed by the vast majority of today’s services organisations. 

The third challenge, however, is perhaps the most daunting of all, because it flies in the face of every marketing and promotional primer ever published, read, or taught. That is, the importance of treating your B2B accounts as if they were B2C customers. Many of the service executives, managers, technicians, and general services staffs have never looked previously at their business accounts as “consumers” in the past. But that’s what they really are – and that’s how they act when they collect information to support their buying decisions when they evaluate alternative vendors and products, narrow their “long lists” down to “short lists,” and make their final purchase decisions and/or recommendations.

In the past, businesses typically employed an entirely different process than consumers did to make their business-related product and service decisions. There was generally an elongated evaluation process, followed by an equally elongated negotiation process, ultimately leading to an acquisition decision that was approved by a committee or purchasing department. Business managers generally utilized resources such as comparative product/service reviews produced by research analyst firms to compare alternative offerings, then they typically would dissolve into committees and groups chartered to make the final purchase recommendations. Sales calls and marketing collateral provided by each of the short-listed manufacturer/OEMs and services organisations were also relied on heavily (as they still are today). 

However, the overall process was oftentimes slow, repetitive, incomplete, and short of the full complement of information it should have taken to support the decision-making process. Further, many of the short-listed vendors would typically only compare their products and services to those offered by their closest “like” competitors, oftentimes ignoring some of the otherwise applicable “new technology” solutions providers. But, as they say, times have changed. 

 

The Convergence of B2B and B2C:

The primary reason why the “like-company comparison” no longer holds up can be explained in just a few words and selected brand names, e.g., the Internet, Google, LinkedIn, Twitter, Amazon, QVC, Federal Express, UPS. Of course, there are many other paradigms that may be just as illustrative, but these are representative examples of what has helped transform the “B” aspect of the B2B equation into a “C.”

The Internet has become the great equalizer, i.e., the means by which businesses (the B’s) and consumers (the C’s) have been afforded equal data and information access, availability, and use. Prior to the introduction of the Internet, businesses and consumers operated in two entirely different worlds; but now, businesses and consumers have an equally powerful tool to support their product and service decision-making processes.

Further, search engines like Google, Yahoo!, Bing, and others can equally empower both types of customers in their ability to search out the best products and services available to them. No longer would businesses need to rely primarily on printed or electronic buyer’s guides, directories, and product/service overviews published by research analyst firms. Nor would consumers need to focus exclusively on Consumer Reports, newspaper articles, and television advertising to obtain their purchasing information. Not that these sources aren’t rich and resourceful – they entirely are. But today, there are numerous websites, blogs, trade associations, and general e-mail communications, posts and tweets that are powerful additional sources of comparative information that is helpful in making a final decision.

"The question arises: Wouldn’t it be nice if all of the B2B business vendors offered the same capabilities as the B2C vendors?"

Then there are the companies that have taken the functionality of these Web-based tools to the highest levels. Companies such as Amazon that, every time you log in, tell you what you’ve bought in the past; what others who have bought the same items as you have also bought; what new items similar to the ones you have bought in the past are now available, and so on. They can even provide you with time-related reminders for purchasing (e.g., birthdays, holidays, anniversaries) and alternative shipping options for the items you have purchased.

The question arises: Wouldn’t it be nice if all of the B2B business vendors offered the same capabilities as the B2C vendors? For example, letting their customers know what comparable businesses have ordered in terms of related items, bundled product/consumables packages, extended service coverage agreements. Or reminding them that they may need to renew or extend their service agreement, stock up on consumables, or consider migrating to a newer model or version. Some companies already provide these services, but certainly it would be great if there were more businesses that did. 

Companies like QVC and the Home Shopping Network have also maximized their use of the Internet’s communications capabilities by making not only the buying process easy – but the returns process as well. For example, you might purchase an item from QVC via telephone, computer, or electronic device. Once you obtain a customer number, it’s all very easy to place an order. The overall customer experience is then heightened even further by the high level of communications provided to the consumer, receipt of a near-instant e-mail confirmation of the order, subsequent follow-up e-mails when the item is shipped, if it is on backorder, etc. Even the return process is easy with companies like QVC. If it doesn’t work out, one can simply return the item in the same packaging along with the supplied mailing label, with return-receipt and credit notification sent in a timely manner. 

Again, an equivalent B2B experience here would be an outstanding way to focus on your business customers. 

 

The Permanent Emergence of the “C” Account

It is no longer good enough to tell your accounts that your organisation is no worse than any of your similar competitors (the “like-company comparison). If you do, you will risk hearing something in return such as, “I understand that. But what I don’t understand is why you can’t provide me with as much past, present, and future order information as Amazon or process my return – and return credit – as quickly as American Express!” 

By simply delivering the same-old, same-old treatment to your accounts, you are guaranteed to continue treating them as B’s. However, your accounts have become accustomed to being treated as C’s. Your customers – empowered by the Internet, its evolving technology, and the explosion of related apps, devices, and social media tools – have already crossed that bridge; now’s the perfect time for your services organisation to do the same!

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Further Reading:

• Read more exclusive FSN features from Bill Pollock @ www.fieldservicenews.com/blog/author/bill-pollock
• Read more about Service Innovation and Design @ www.fieldservicenews.com/blog/tag/service-innovation-and-design
• Read more about Leadership and Strategy @ www.fieldservicenews.com/blog/tag/leadership-and-strategy
• Connect with Bill Pollock on LinkedIn @ www.linkedin.com/in/bill-pollock-b74874/
• Follow Bill Pillock on Twitter @ https://twitter.com/sfgonservice
• Follow Bill Pollock's Personal Blog @ pollockonservice.com/

As our industry is desperately seeking avenues to return to normality, FieldAware’s COO Steve Mason brings to the table an interesting solution...

As businesses continue to evolve their operating practices in the age of Covid-19, service organizations worldwide are resuming their operations in response to relaxed lockdown measures. In many locations, the introduction of Track and Trace protocols enables authorities to identify who a positive COVID-19 person has been in close contact. Once identified, they instruct exposed individuals to self-isolate and to get tested themselves. These new measures aggressively limit the exposure to COVID-19 and enable the suppression of uncontrolled virus breakouts.    

As part of reopening plans, many countries have successfully implemented Social Bubbles. In these “bubbles,” individuals agree to only have contact with a small group of others and practice social distancing with everyone else. The idea is to break transmission chains so that nobody within the bubble gets infected or, importantly, if somebody within the bubble is infected, the number of people to test is smaller and the virus is not transmitted into the wider population.

So, what does Track and Trace and Social Bubbles have to do with field service and service organizations? 

At the heart of field service is the delivery of work to customers at commercial facilities, private homes, or in open, often public, locations. This necessary public interaction creates an environment where field techs have a higher propensity to come into proximity with infected COVID-19 contacts. The result and impact on service organizations:

• A customer becomes infected, and the field resources that have been in close contact with that customer are part of the Track and Trace investigation.
• The tech becomes infected themselves, and the Track and Trace investigation includes other service team members and the customers they interacted with while providing service.

Either scenario creates an inevitable event that your field resources will have to self-isolate due to the evolving Track and Trace investigation protocols associated with COVID-19 exposure.

The question isn’t whether your techs will need to self-isolate. Rather, how do you reduce the number impacted at any one time and simultaneously minimize the impact on your service business?

Enter the concept of Service Bubbles. In the fight against COVID-19 service bubbles provides several key benefits:

1. For individuals, it reduces the risk of exposure and infection.
2. It provides a mechanism to manage the impact an exposure has on the available workforce for service organizations.
3. For society, it contains the exposure and potential spread of an infection to a smaller number of members in the Service Bubble.

 

How do you set up Service Bubbles?

There are three primary ways to create service bubbles, and you mix and match options depending on business demands.

• Physical Service Bubbles are created by creating small service areas and assigning individual resources and crews to work. You build up these smaller areas until you achieve complete coverage of your original service areas.
• Logical Service Bubbles are created by using permits to allocate different customers to different resources. Once configured, a pre-determined resource can only service that customer.
• Shift-based Service Bubbles are created by allocating resources to work at different times of the day. Setting the working hours for each resource to reflect their correct shift hours, and adjusting their shifts over time ensures no overlap.  

In addition to the different ways to create Service Bubbles, you can also use permits to limit further which resources can work at specific customer locations. By restricting the number of resources visiting a customer location, you minimize the resources required to self-isolate as part of a Track and Trace investigation if a customer tests positive.

The smaller team sizes require constructing teams to fully consider the skills necessary to service customers in a particular area. You want to avoid having to send experts into different Service Bubbles to resolve complex problems. Appropriately allocated experts have the benefit of keeping the integrity of your Service Bubble strategy, minimizing Track and Trace risk, while increasing first time fix rates.

Tactics used to avoid overexposing include:

• Defining Skills against all your field resources and creating a Schedule Policy to utilize these Skills Rules. Planners and the Smart Scheduler will only assign jobs to techs with prerequisite skills.  
• Ensuring knowledge management capabilities are fully enabled for field resources to have access via smartphone to provide access to customer and asset history; technical manuals; specification sheets; FAQ’s; and other artifacts to reduce the need for expert involvement.
• For advanced organizations, using Augmented Reality to give access to your experts remotely. Using smart devices and even googles for a pool of experts to see what is happening on-site remotely and guiding technicians to fix more complex problems or unfamiliar systems.   

Setting up and managing an effective Service Bubble operation can be difficult if you do not have a modern application and technology. FieldAware with its configuration flexibility, enables organizations to efficiently and effectively set up and administer Service Bubbles, increasing the team’s operational resilience and protecting against having vast numbers of the team self-isolating.  

Once suspended and Track and Trace protocols are lifted, you can revert to your original service model by merely assigning your resources back to their original service areas and removing the customer annotated permits. Once updated, your system will automatically revert to your original service model.

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Further Reading:

• Read more about Field Service and Covid-19 Recovery @ www.fieldservicenews.com/en-gb/covid-19-0
• Read more about Service Innovation and Design @ www.fieldservicenews.com/blog/tag/service-innovation-and-design
• Read more FSN exclusive articles from the team at FieldAware @ www.fieldservicenews.com/blog/fieldaware
• Connect with Steve Mason on LinkedIN @ www.linkedin.com/in/stevemason3
• Follow FieldAware on Twitter @ twitter.com/fieldaware
• Find out more about the solutions FieldAware offer @ www.fieldaware.com

Marc Tatarsky from FieldAware argues the case for a Field Service Hub as part of a field service strategy. 

Field service organizations of all shapes and sizes are continually challenging themselves to create new sources of competitive advantage, and a Field Service Hub might be the answer. Through our many years of experience working across numerous industries, we see a direct relationship between the effective use of technology and creating a competitive edge.

 

Using Technology in a Service Strategy

When service teams actively use technology, it leads to better-served customers. At FieldAware, we measure overall Field Service Maturity across two dimensions – technical maturity and operational maturity. We find time and time again, utilizing an open and integrated service platform is the crucial source in bridging these two critical threads together, enabling organizations to stand out and deliver world-class service.

In a previous article, I discussed the power of extending the service organization's impact through the integration of back-office systems. Fully integrated service solutions enable organizations to consolidate field-based work from multiple internal and external sources, as well as data from back-office systems into one operational platform. A world-class field service management (FSM) solution provides teams with the core features to address demand management, work planning, technician enablement, work order debriefs, operational management, and analytics & reporting. 

But what happens when service departments want to address new/emerging market trends or want access to cutting-edge technologies. Does this mean they have to rip out the old system and find a new one? Or wait until their current all-in-one solution provider develops (or acquires and integrates) a robust ancillary solution themselves? 

Enter the concept of a Field Service Hub, fueling an age-old debate of best-of-breed solution vs. all-in-one-platform. In today's modern cloud infrastructure, coupled with easy integration and intelligent business systems, arguably, the pendulum has swung back in favor of a best-of-breed approach. A Field Service Hub builds on the best-of-breed model, allowing a service organization to gain maximum flexibility and agility. It bolsters a team's ability to innovate service delivery capabilities without disrupting the integrated "core" system and workflows.

 

So, what is a Field Service Hub?

A hub is a best-of-breed approach to delivering a robust, highly configurable, open service platform. It offers the "core" capabilities that organizations need to digitize their field service operations and is architected to integrate. Think well-designed – open, integrated, and configurable. These attributes allow organizations to adopt and access new, modern technologies quickly and future proof their investment. Teams can freely and cost-effectively extend the value of their "core" platform without disrupting the base system and integrations. Service leaders can take on new market advancements such as IoT, AR, advanced communications, dynamic forms, predictive analytics, and other emerging trends to meet changing customer demands.

 

What can a hub do to create a competitive edge?

A robust hub provides access to a range of complementary best-of-breed solutions that are pre-integrated and offer a seamless end-user interaction. It enables service leaders to implement new technologies and quickly employ field service specific use cases relevant to the technology. Even better yet, it also provides open access to enable customers to integrate their chosen best-of-breed solutions should the vendor not already have one available.

Imagine having your fully integrated service workflow further transformed with an Uberized technician tracking and advanced communication tool that seamlessly leverages details about the work order, the customer, work history, technician, and other "core" system details. The new enhancement effortlessly improves transparency to the end-customer. Or, switching to a dynamic forms capability that allows you to instantaneously deploy new or revised work protocols or regulatory checklists to all field workers at the touch of a button. Or, deploying a remote diagnostic and training app that allows you to address an aging workforce or new market requirements to work remotely. Many of these capabilities are only partially (if at all) available in the most robust, expensive, and complex all-in-one enterprise solutions. Yet, a hub can affordably provide best-in-class access to these features.

 

Why is a hub so powerful?

A well-designed hub reduces an end-user organization's risk of maintaining integrations. Maintenance is the responsibility of the hub provider. Service organizations pick and choose the capabilities they need and gain significant cost savings by only paying for the service provided vs. investing in a comprehensive implementation and stand-alone solution. Furthermore, a hub can be specifically tuned and priced for the mid-market or emerging enterprises, providing access to sophisticated field service capabilities that are easy to implement and deliver rapid ROI.

A service platform, fully integrated to back-office systems, is traditionally viewed to have a minimum shelf-life of 5 to 10-years. However, as we know, now more than ever, markets are volatile. There is constant disruption from technology advancements, new market entrants, globalization, and regulatory changes. Business models must be more dynamic than ever. This required flexibility puts pressure on this investment horizon, especially if a solution is not able to adapt and keep pace with new technology or changing business needs. A Field Service Hub reduces the risk and enables service organizations to continue to gain value from their core FSM investment while swapping and adding satellite applications to facilitate change and adapt to new workflows and business models.

 

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Further Reading:

• Read more News and Features from FieldAware @ https://www.fieldservicenews.com/fieldaware
• Visit FieldAware's website @ www.fieldaware.com
• Read more by Marc Tatarsky @ https://www.fieldservicenews.com/marctatartsky
• Read more about digital transformation in service @ https://www.fieldservicenews.com/digitaltransformation
• Read more about field service strategies @ https://www.fieldservicenews.com/strategy
• Read more about technology adoption in service @ https://www.fieldservicenews.com/technologyadoption

What can we learn from the social environment of silicon valley and can it be adapted to service? Mark Glover finds out more...

In the 1960's, sunlight seeping into the bay area of San Francisco would glisten not only off the sea but, perhaps less evocatively, off the many silicon transistors being developed at the time.

Curating Innovation in Field Service

Since then, the area better known as silicon valley sparked with creativity from the world famous Stanford University and through a tech evolution that started in military equipment, straddling space research, radio equipment, computer software; stopping slightly to ease itself out of the dotcom bubble, has emerged as the technology capital of the world.

It now means that when we think of innovation, we think of silicon valley. It contains the largest concentration of high-tech companies in the United States. The area bristles with start-ups who have started or are about to; a place where ideas fizz creating some of the biggest trends and movements.

Its criss-cross of streets and avenues are dotted with famous tech companies.

Facebook, Google, Twitter all bloomed from its creative soil and it was while researching this article, using the aforementioned web-based search engine, my browser guided me to a picture of an unassuming garage in Palo Alto, the caption underneath reading: "The birthplace of Silicon Valley."

Further investigation revealed the garage had, in 1938, been where two college friends, William Hewlett and David Packard, began developing their audio oscillator. As I look around my office I see a printer with the pair's names on which is probably ubiquitous across many other offices up and down the land and another nod towards the global influence of the Valley.

Hewlett Packard, Facebook, Twitter base themselves or have a presence there. Google's 'Googleplex', the company's vast glass and chrome office-space shimmies and shines over 2,000,000 square feet in Mountain View, California.

Employees from the surrounding San Francisco areas are whizzed into work and back by a wi-fi enabled Google shuttle bus. It's not Google's main HQ, that's in New York City, but the company recognised the importance of embedding themselves here.

But why is this part of the world such a fertile area for creativity and big ideas? Of course, the weather, fine beeches and transport links all help - as does the location of of Stanford University, one of the finest education establishments in the world but the creativity has matured and eventually embedded itself over time.

 

"It's interacting heavily with each other, doing the same things and learning and inspiring each other and setting the same standards..."

 

The original sediment fused in silicon chips has, for those that work there, become an ingrained culture that is the envy of many a businesses and thought pieces in Wired and HBR. Those that find themselves working there can't help but be absorbed and locked into its social environment.

In a recent Field Service Podcast Jan van Veen discussed how an social environment like that of Silicon Valley's can lead to business success. "The environment you're in heavily dictates or defines your success," he said. "There is a ambition to it, there is a stretched goal that you are trying to pursue.

"An example of this is Silicon Valley. Everyone is there together, doing the same kind of thing and just by being so close to each other and interacting with each other and doing similar work and collaborating with each other and then all of a sudden that boosts development."

"There are buildings where start-ups join together and are based but it's not just about the office-space, it's interacting heavily with each other, doing the same things and learning and inspiring each other and setting the same standards for example, 'How do we run our business and develop our business and grow our business?'"

It all sounds great, even better if you're in the California sunshine sipping a smoothie while caressing the keypad of your Macbook pro, but what does it really look from a business perspective? "It's a social environment, an environment of people together," Jan suggests. "The environment is a group of people, either inside your business or outside or a combination of both, all sharing the same kind of aspirations and values and goals. And that they have a high-level of interaction and the exchange of information, insight and experiences and interact with each other," he paused at this point in the podcast, "but it's more than this."

"It's setting a culture and values and that way influencing each other's behaviours, mindsets and habits and the actions you take," he continued. "It can boost the things you do and how well you are able to succeed in achieving your goals."

 

"The demands from clients are changing and we see that business models are changing and we are seeing new entrants coming into the industries..."

 

As we move forward over the next twelve months what benefits can adopting such a culture bring to the service sector? van Veen thinks it can affect how successful we are in using innovation to develop a more service-orientated business model. "In manufacturing industries we are seeing more and more digital technologies coming in. The demands from clients are changing and we see that business models are changing and we are seeing new entrants coming into the industries."

What this new social environment signifies is a warning to those that choose not to or fail to follow. If manufacturers are not able to adapt quickly and escape from business-as-usual and fail to adapt to new models then they will drop behind the competition. How well are we able to change the way we innovate our businesses, drive that innovation and thrive in a rapidly changing world?

When Mr.Packard and Mr.Hewlett dusted away the cobwebs in a garage in Pala Alto, looked around and taken a deep breath, did they know what they would achieve? Probably not, but they would have driven each other on, confident their mini social environment would get them through.

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Further Reading: 

• Read more articles by Mark Glover @ www.fieldservicenews.com/markglover
• To listen to the podcast referenced in the article click here.
• Read more about Service Innovation and Design @ www.fieldservicenews.com/service-innovation-and-design
• Join Jan van Veen's Community @ moremomentum.eu/discovery-session
• Connect with Jan van Veen on Linked in @ https://www.linkedin.com/in/janvanveen1

Jan Van Veen, founder of moreMomentum, outlines a crucial approach he has been developing within his peer-sharing community to help service organisations grow through innovation and diversification...

Manufacturers with a narrow innovation focus miss many opportunities, see more innovations fail, often see that competitors do exactly the same thing and struggle to turn their innovations into growing revenues and margins.

Leading and successful manufacturers cover a much wider scope of innovations than those that stagnate and fall behind competition. They actively search for opportunities to improve the value they promise their clients, how they deliver the value and how they capture part of the value. 

They find and launch more innovations for growth. Sounds like a good recipe, doesn’t it?

The problem: Too narrow innovation

Many manufacturers have a too narrow focus on their innovations. Their dominant focus is on improving features and functionality of the products they sell. An increasing portion of the manufacturers also improve their services, but are still focusing on break-fix and maintenance services.

There are major disadvantages of the narrow innovation focus:

• Companies miss many opportunities to better serve their clients and grow their business;
• Most innovations are not a complete solution, miss crucial aspects and therefore fail;
• If clients do appreciate the new value, they often have the buying power to benefit from this new value without paying more for it;
• For competitors it is easy to recognise the innovations and do exactly the same (or better), hence, commoditise the new capabilities and value even before the investment is earned back.

As a result, they not only fall behind competition. In today’s rapidly changing industries, they ultimately run the risk of be pushed down the “food chain”, stagnate or even become obsolete. This is pretty frustrating, but does not have to be like that.

How Many Manufacturers Struggle to Grow with IoT

A common struggle is to drive growth and monetise new remote capabilities.  Most manufacturers focus predominately on predictive maintenance, remote diagnostics and remote resolution. The aim is to increase the value they offer to clients by improving uptime of their equipment and the resolution time if a failure occurs.

They encounter the following typical challenges:

• Uptime is already quite high, so there is not much room for improving the value for clients. If uptime is already 95%, how much value will it bring your client to increase uptime to 96-97%?
• Clients recognize that you will be able to deliver maintenance services at a lower cost, so they may actually expect to pay less, not more. 
• Competitors are working on exactly the same, so there is no opportunity to differentiate
• Clients fear a myriad of IoT networks, platforms and having their data flow to external parties. Every brand and manufacturer they work with is asking for the same.
• Clients start looking for a common infrastructure and services from neutral service providers.

As a result, manufacturers invest a lot, see little value coming in return and see a declining interest for business innovation from senior stakeholders in their company.

Solution: Search along 21 innovation tracks

Leading and innovative manufacturers have a pretty broad range of areas in which they innovate for growth. They are more open to new domains, new business models and new perspectives which enables them to adapt and thrive in rapidly changing industries.

In our research, we have identified 21 innovation tracks for growth, spread over 3 clusters. You can thrive in today’s disruptive world and achieve sustainable growth by widening your scope of innovation along these 21 tracks and by making strong and coherent combinations in each innovation.

Just like the leading innovators, make it a habit to embed these 21 tracks firmly in your innovation strategy:

• Actively search for growth opportunities
• Along 21 innovation tracks
• And enrich each innovation idea by combining a few innovation tracks.
  
  

If you want a more in-depth description of the 21 innovation tracks, you can download the Job-aid 21 innovation tracks to thrive during disruption. This includes a description of the innovation tracks and a template assessment sheet to assess your current portfolio of innovation projects and ideas.

The three clusters of the 21 tracks are;

1. The value you promise to clients

Which problems or needs do you solve for which customer segments? Your growth opportunities are in solving more or other problems of your existing clients and expanding the market you serve. Alternatively, instead of expanding on scope and market, you could also specialise more in a specific niche of customer segments and needs and become the market leader in that niche. This cluster of innovation tracks also includes developing your brand to better articulate and expose the value you provide.  

2. How you deliver the value

Which activities and capabilities do you need to deliver the promised value to your clients? Your growth opportunities are in building and improving the capabilities to deliver the value in an effective, efficient and consistent way, so clients get and see the value.

3. How you capture part of the value

Which portion of the value you create and deliver do you capture? So how and how much are you being paid for the value you deliver? This involves your pricing model, earnings model and your position in the value chain. Successful and innovative companies always have these three clusters – value.

A few examples of how the various tracks are embedded in their strategy;

• There was a latent need of easy availability of tools and information and easy access to music (track 1). A lot was already available for the techies, but not for the mass market until Apple made this easy and readily available (track 2).
• Various manufacturers have offered something similar before, but Apple made it a commercial success by learning from the previous attempts of others what was needed for success (track 8)
• Apple developed an ecosystem of products and services with seamless integration as well as the Appstore (track 7). Other app-developers can offer their apps in the Appstore as well (track 15), but have to comply with Apple’s requirements. They also need to pay part of their license fees to Apple (track 19). As the app-builders are replaceable and the Apple eco-system is not, Apple can afford to ask pretty significant fees (track 21 and 18).
• Apple’s brands is far beyond “great products”. It is much more about lifestyle, ease, fashion and desire (track 11 and 12).

Back To Iot – The Opportunity

Once you have the sensors in your equipment, the infrastructure for connectivity and data and the capabilities to turn data into valuable insights, there are many opportunities to enrich your innovations and business model and hence dramatically improve the potential for your clients and your own business. To mention only a few:

• Your clients are on a journey of becoming more digital and data driven in many of their processes. This is a challenge with many unknown domains, unanswered questions and uncertainties.
• How can you identify these new needs (track 1) and reduce the complexity and uncertainty for your clients (track 2)?
• With the data and intelligence you develop on the back of these data, you can help your clients to reduce usage of energy and materials, improve efficiency and productivity, develop their products and shift their core business (track 6).
• This could start with assessment and benchmarking services, evolve in consulting and training services and further grow into business outsourcing services.
• For example, Fresenius does not only sell the instruments for kidney dialyses, but also runs entire kidney dialyses departments in hospitals, including the staff treating the patients.
• Part of this journey is also advancing your brand from being a product manufacturer to a solutions provider and being known for what problems you solve. (track 11 and 12).
• For example, Caterpillar helps clients achieve operational excellence through advanced services covering asset management, project planning, fuel consumption etcetera.
• Particularly for component manufacturers, you have the opportunity to develop unique intellectual property with which you can improve the overall performance of bigger systems of OEM’s. This will make you less replaceable and increase your ability to secure your margins from the OEM (track 21 and 18) – like Intel Inside. 
• Maybe you can even do business with the end-client buying assets from the OEM (track 19). An example is how Rolls Royce does not sell its airplane engines to the airplane builders (OEMs) but to the users of the airplanes.
• For most innovations, you will need to develop new capabilities, processes, competencies and tools to deliver these new values in an efficient way (track 14).
• As your business becomes more focussed on outcome and starts building more recurring revenues, you will need to develop your sales model as well (track 20), with more emphasis on onboarding, driving and demonstrating customer success, improving customer life time value and step-by-step growing the business with your clients by upselling and cross-selling.

 

Conclusion

For sustainable success in today’s rapidly changing world, there is no single silver bullet. A great product or great service will not bring much value. To thrive in these disruptive times, you need diversity in your business innovation with initiatives in different innovation tracks as well as initiatives with a rich and coherent set of innovation tracks. That way, you will launch innovations which:

• Provide clients a complete, remarkable and desirable solution
• Are hard to replace by other actors in the value chain, like OEM’s or system integrators
• Cannot be easily copied by competitors
• Your clients will love to pay for

If you want to take your business innovation to the next level, I would like to recommend you and your team to;

1. Assess your portfolio of innovation projects along the 21 innovation tracks. How well are the 21 tracks covered?
2. Enrich each innovation idea and project by adding a few more innovation tracks to it.

Feel free to use our job-aid “21 innovation tracks to thrive during disruption”. You can download it here. 

It contains:

• A description of each innovation track with some examples
• An excel sheet to map each innovation to the 21 innovation tracks and get an insightful graphical picture of how diverse your innovation is
• Slides you can use to brainstorm with your teams to enrich your innovation projects.

Good Luck!

 

 

 

Understanding the various ways in which your customers may perceive value from your services is crucial if you are to be able to effectively sell preventative maintenance based service solutions to them, writes Coen Jeukens...

Selling preventive maintenance is not what it used to be. In the old days a manufacturer could use its expert position to prescribe a maintenance scheme. Today, a combination of emerging technologies and pressure from buyers to do it cheaper/ smarter warrant a revisiting of the value proposition of preventive maintenance.

PM = Periodical Maintenance

As acronym we use PM. When talking we utter the words preventive maintenance. But what do we really mean?

• Planned Maintenance
• Periodical Maintenance
• Predictive Maintenance
• Prescriptive Maintenance

Analysing a lot of service contracts offered by OEMs we still see most of the maintenance is periodical or counter based. Just like the maintenance interval for your car; a PM each year or at 15,000 km.

All those periodical or counter based maintenance jobs are good service revenue for your service organisations But what happens when customers start challenging you? What if the customer has access to knowledge that amends or contradicts the engineering assumptions that led to the definition of your current maintenance intervals?

Buyers seek to reduce maintenance cost

In a world where people are more vocal, we see customers expecting things to work and buyers seeking to reduce maintenance cost. These expectations impact the way we sell service contracts.

Selling is more straight forward when you can see a direct relationship between the pain and the gain. Such a link is obvious for installation and break-fix activities. But it is less apparent for preventive maintenance. Try to picture buyers asking these questions:

• What does PM prevent and what is the risk that remains?
• What is the rationale of the current maintenance interval?
• Nothing happened last year. What will happen if we skip or delay a PM?
• Can you dissect the PM job in activities (show me what you do) and is it really necessary to have all those activities done by an experienced/ expensive technician as yours?
• Can we do pieces of the PM job ourselves?

 

 

 

You get the gist of the conversation and know where it is leading less cost for your customer at the expense of less PM revenue for your service organisation.

What complicates the selling of service, is that in most scenarios the buyer and the customer/ user are not the same person. You may convince the user of a piece of equipment to do preventive maintenance, the buyer on the other hand has a different set of objectives. Most likely the buyer will push you on a path towards commoditising and cannibalising your PM services. All in order to reduce cost.

Rediscovering value

To stay ahead of the game let’s dissect PM along the lines of value creation for the customer. High level you can split a PM into three pieces:

1. The execution of the maintenance activities
2. The reporting on those activities
3. The communication and interpretation of the results

Ask your customers to rate the value of each of those pieces. It’s probable that you will find that the business value of PM to a lesser extent is in the execution and more in the reporting and communication.

Maybe you pride yourself in your uniqueness of execution, whereas the customer might perceive it as a commodity. If also reporting and communication are on par, you may face price erosion.

If your customer needs the PM report for compliance or insurance purposes, the value of the report increases. When you consider that PM is often a play of risk and liability, you can price the value of your brand.

Example: It does make a difference to an insurer if a yearly PM/ inspection is performed by a triple A company or a middle of the road company. Communication value comes into play when your customer expects you to be a partner rather than a supplier.

• Supplier – “just send me the PM report, I’ll read and interpret it myself. When I need assistance, I’ll contact you.”
• Partner – “help me interpret the findings and consequences of the PM. How does this impact my business?”.

In the latter situation you can monetise the communication beyond the effort of having a conversation for a couple of hours. PM can thus elevate from an obligatory periodical execution to an instrument of customer satisfaction and cross- and upselling.

Repackaging the preventive maintenance offering

In order to retain and expand your PM revenue stream in a context where the buyers move to reduce their spend, do go in discovery mode and (re)define preventive maintenance.

PM is not a singular black box once defined by somebody in engineering with a product focus. Modern PM is a menu of choices (and consequences) for your buyer based on the usage profile of the product, budget and risk.

With experiments you can test all critical assumptions and success factors of your service innovations, get better data and take better decisions before scaling up investment and implementation. As a result, you will only pursue the viable and valuable ideas, will not waist resources on unsuccessful ideas nor jeopardies today’s business, brand and confidence of any stakeholders or colleagues. Jan Van Veen discusses...

A burning platform is bad for innovation and change because it focuses on an urgent necessity to change. This triggers a defensive attitude causing higher risks for failure, has a lot of collateral damage and does not drive fluid, continuous innovation for sustainable success. Jan Van Veen explains why... 


Quite often, when talking with business leaders and clients, I hear the problem that the organization and its people are not that open to innovate and change as they already have good performance and there is no clear threat visible yet. They experience it as a lack of “sense of urgency”: there is no “burning platform” for innovation and change.

A common approach is to either wait until the situation gets worse or construct a (mini)crisis to increase and maintain a sense of urgency.

However, the question is:
• Do we really need a burning platform to innovate and change? And;
• What are the downsides to building change and innovation around a burning platform?

In this article I will share five reasons why a Burning Platform is bad for sustainable innovation and change.

Why a burning platform is bad for innovation? 
1.You are too late
Typically, the trends which create threats or opportunities develop a long while before becoming an obvious burning platform. First, there are the first weak signals for a trend. At this time, it is still hard to accurately predict what will happen and when. Maybe different way signals are contradictory.

So often, these weak signals are being ignored by the majority. After some time, we see the first competitors moving, but actually also struggling to successfully address the threats of opportunities. Their initiatives seem to be failing. As a result, the majority still waits. Once the leading competitors are having their first successes and the trends become emerging, the burning platform becomes visible.

But now, the leading competitors have learned and built capabilities and can scale. While the lagging majority is still trying to find the right questions, let alone the right answers. They are dropping behind the leading pack in their industry. They are too late. 

2. You get a deeper performance dip
The urgent situation of a burning platform means there is a critical situation which requires a rapid response and rapid results.
The topic is becoming increasingly dominant in the daily activities of everyone in the organisations. All hands on deck!

It starts distracting attention from the daily work of running the business. The overall performance will suffer more and longer than if the urgent can critical situation would have been prevented by innovation and change at a much earlier stage.

3. You disengage your valuable people
In general, a necessity to change – the burning platform – will create higher stress levels which will impact altitude and behaviour towards change. The more critical and urgent the necessity, the bigger the chances are for stress levels which will trigger defensive reactions like fight, flight or freeze.

Too often, we see the stress levels resulting in internal fights, pointing fingers, pushing problems to other teams and the best talents moving to other companies.

These are negative sentiments, which can be transformed into a positive and bonding sentiment within teams for a while, but not for long.

4. You miss the best solutions
The defensive fight, flight or freeze behaviour mentioned above, also triggers short term reactive thinking and blocks constructive and creative thinking.

When solutions require deeper analysis, being open to new types of solutions and require collaboration between different teams or department, this reactive short-term thinking is counterproductive.

The high level of stress increases the risks of not seeing the real problems or opportunities, not finding the right solutions and not doing what it really takes to get the results.

"It starts distracting attention from the daily work of running the business..."

5. You increase the risk for failure
During the first attempt of implementing a new solution, we should expect hiccups. Instead of experiencing this as a failure, everyone should see this as learning.

They should be able to have a constructive and forward-looking mindset to collectively understand why it is not working yet and what interventions are required to get it right. With a flight, fight or freeze attitude, the chances are bigger people will blame others or the conditions, find reasons to justify the disappointing results and give up.

For sure, we know about success stories where companies successfully pivoted their business during a crisis, like IBM. We also now the examples where companies miserably failed during a crisis and did not survive. 


The better alternative: Purpose
The better alternative is what the leading and dynamic manufacturers do very well: the rally their employees, their clients and their partners with a strong and compelling purpose which makes continuous innovations and change the natural, logical and compelling thing to do.

Like everyone at Philips Healthcare is committed to transforming our healthcare by offering and developing integrated solutions (hardware, software, services) for people to live healthier, prevent deceases, be diagnosed quicker and more accurately, receive better and less intrusive treatment and receive the care they need at home.

Or like Tesla is accelerating the transition of sustainable energy and transportation with electric vehicles, better batteries and solar panels. This approach will be more rewarding for everyone, lead to sustainable success of the business and reduce the chances of entering periods of critical decline of performance. It will avoid you being on a burning platform.

The Essence: People Do change!
I believe that people do change and drive innovation, if there are compelling reasons and not too many obstacles. After all, that is the only reason the world is changing so rapidly.

Too many organisations do a bad job in providing compelling reasons and good job in creating obstacles. That is the reason organisations struggle in keeping up the high pace of changing world.

Leading, dynamic and innovative companies set themselves apart by maintaining a clear and compelling purpose, direction and strategic intent as well as e great environment for collaborative change and innovation.

Conclusion and recommendation
In this article, I described five reasons why the common practice burning platforms and sense of urgency are bad for innovation and change. I also briefly described the best practice alternative: build and maintain a compelling purpose for everyone to be proud of and to work on.

If you are on the same page and would like to take next steps, I would recommend you to:

• Assess what your personal view is on the reason your business or department should change and innovate differently or quicker.
• Assess to how compelling this is for the 1) shareholder, 2) boardroom, 3) employees and 4) clients.
• Evaluate and enrich (your view of) the purpose of your company or your department. What is your relevance for the industry, for your clients and for the society?
• Reach out to me for a discovery or sound-boarding session. I am happy to help and also curious to learn from your experience.

I am confident this will bring you actionable insights for your department - if not for the business as a whole. Good luck!

Jan van Veen is Founder and Managing Director at moreMoumentum.

Expanded portfolio will simplify the transition to a secure, automated and cloud-centric infrastructure with new innovations in metro, edge and core, firm says.

Juniper Networks has announced a major refresh to its metro, edge and core solutions to for service providers 5G transformation.

Comprised of IP optimized silicon enabling industry-leading 400GbE density on a new 14.4 Tb linecard, new ACX access and aggregation platforms and an expanded MX 5G router portfolio, the new solutions will help service providers achieve a holistic approach to infrastructure transformation, Juniper claims.

Commenting, Brendan Gibbs, Juniper Network's VP, Product Managament said: “Juniper Networks is giving service providers the building blocks required to create 5G-ready networks built for simplicity and agility that are capable of supporting immense traffic demands for the future. By combining the attributes of secure and automated cloud architectures, Juniper is ushering in the next era of service provider networking.”