Kris Oldland, Editor-in-Chief, Field Service News talks to Deputy CEO and COO of Polygon a company with over 3,500 field service engineers, about how his organisation has evolved over the last decade, the shift towards advanced services that has...
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Jun 25, 2018 • video • Features • Management • Jonas Granath • Polyflow • Polygon • Risk Management • Enterprise Service Management • field service • field service management • IFS • IoT • Service Management • Servitization • Servitization and Advanced Services
Kris Oldland, Editor-in-Chief, Field Service News talks to Deputy CEO and COO of Polygon a company with over 3,500 field service engineers, about how his organisation has evolved over the last decade, the shift towards advanced services that has come from that evolution and how a close working relationship with Enterprise Service Management solution provider IFS has empowered their ability to develop and advanced services approach to field service delivery.
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Jun 18, 2018 • Features • FSM • IFS FSM 6 • Mark Brewer • mplsystems • Work Wave • EQT • ERP • field service management • IFS • IFS APPS 10 • SAP • Service Management • Software and Apps • Stephen Jeff Watts
With a new CEO taking the helm Swedish FSM and ERP providers, IFS enter a new era of their ongoing development. Kris Oldland, Editor-in-Chief was on hand at the IFS World Conference in Atlanta to see the developments first hand and caught up with...
With a new CEO taking the helm Swedish FSM and ERP providers, IFS enter a new era of their ongoing development. Kris Oldland, Editor-in-Chief was on hand at the IFS World Conference in Atlanta to see the developments first hand and caught up with FSN associate columnist Mark Brewer, Global Director of Field Service, to get the inside scoop...
The IFS World Conference is an event that never really fails to deliver at least one key highlight of interest. Memories of CTO, Dan Matthews bouncing around madly to Bruce Springsteen on the stage last time out in Gothenburg- he was demonstrating how IoT sensors work just in case you were wondering, is one such example of the unique way the Swedish company approach things.
Similarly, Ulf Stern, one of the companies original founders keeping customers, prospects and the press alike entertained playing some (pretty darned good) rock and roll with his band in a ‘Fish Cathedral’ later that evening is just another example of how the same core ethos remains in the company today as it did when they first started out some 35 years ago. Despite significant growth and development across the years, there all often overlooked secret-sauce that can allow a company to flourish, the uniqueness within their DNA - has always remained the same.
Who IFS are today is very much a different company to who they were then, just 18 months ago.Yet, who IFS are today is very much a different company to who they were then, just 18 months ago.
Firstly, there is the acquisition by - investment firm EQT. Which was in fact announced just days before the Gothenburg World Conference.
At the time the discussion had been highly positive - especially from a field service point of view as the message from EQT was clear - we are giving you the funds to go and do what you do better and faster - with field service being one of the top three areas IFS would be targeting for significant growth.
Given their stature in the market at the time as an already established major player within the field service industry, this was certainly an exciting announcement for those close to our sector.
Indeed, there have already been some significant acquisitions that Field Service News readers, especially those from the UK will be aware of which have followed after the acquisition.
The first of these was to bring IFS UK and Eire reseller Field Service Management in-house, which was a sensible and largely expected move.
The second, which saw mplsystems become part of the IFS family, however, was far more strategic.
mplsystems core strength lies is there omnichannel contact centre technology, essentially plugging a major gap in the IFS solutionAlthough, an FSM solution provider themselves, mplsystems core strength lies is there omnichannel contact centre technology, essentially plugging a major gap in the IFS solution and giving them a genuinely robust end to end service solution.
This is not to mention the US acquisition of WorkWave, an FSM solution that is dedicated to the SMB market - which instantly gave IFS access to a huge market, which many of the larger FSM solution providers struggle to penetrate.
So in fairness the record of EQT in terms of delivering on their promise has been mightily impressive and IFS have continued to grow in stature within the FSM sector as one of the true key players - an achievement all the more impressive given the attention our sector has had within the last few years with the lieks of GE, SAP, Microsoft and Salesforce all investing significantly in building a global presence.
My anticipation was therefore high when I spotted that the launch of FSM6 was to be given a major spotlight, being presented on the main stage as a key announcement on day 1.
Mark Brewer, Gloabl Director, Field Service, alongside Steve Jeff-Watts, Senior Advisor, IFS were the men tasked with giving that presentation.
“If you go back to the origins of IFS, we are an ERP company, but that can be something of an ambiguous term,” opened Brewer when I caught up with him.
We built a product that managed service, maintenance and projects. This means the intrinsic DNA of the business is actually service not manufacturing“ERP for most people is a product built for managing a manufacturing business. IFS did not ever take that approach. We built a product that managed service, maintennance and projects. This means the intrinsic DNA of the business is actually service not manufacturing.”
“Fast forward to today with the IFS FSM platform you’ve got a best in class service offering, there is an almost equivalent best-in-class service functionality in an ERP in Apps 10.”
“This means you can already have an existing ERP such as SAP or somethign similar which you are unable to swap out, we can layer that with best-in-class field service. However, if you also need solutions for your manufacturing, supply chain, financials etc then we can also give you all of this whilst encapsulating a best-in-class service solution within it.”
Customer experience is a huge part of the equation in service organisations now and we are moving into the experience economy “It is a unique position, where we can not only offer the stand alone FSM solution but the wider ESM (Enterprise Service Management) solution as well.”
“I also thought it was very telling that the announcement of our acquisition and mplsystems and our integration of their technology into IFS FSM was front and centre on the main stage during the opening key note sessions.”
“We call our solution IFS FSM but the truth is now that it is a full end-to-end lifecycle management solution. It is far more than just field service, it includes depot repair operations, reverse logistics, customer specific billing, deep contract and warranty capability.”
“Given that it goes all the way to the end, we were missing a piece at the front, and mplsystems omni channel solution completes the picture. Customer experience is a huge part of the equation in service organisations now and we are moving into the experience economy so that customer journey needs to be consistent across the whole lifecycle.”
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Jun 14, 2018 • Features • bybox • Claudine Mosseri • field service • field service management • Inner City Congestion • Service Management • Parts Pricing and Logistics
Inner city congestion has long been a major cause for consternation for field service organisations, but with environmental factors such as air pollution becoming increasingly high on the political agenda of many countries across Europe and beyond,...
Inner city congestion has long been a major cause for consternation for field service organisations, but with environmental factors such as air pollution becoming increasingly high on the political agenda of many countries across Europe and beyond, additional regulatory challenges are fast adding to the issue as Claudine Mosseri, General Manager, Field Services, ByBox explains...
The issue of air pollution in the UK is high on the political and environmental agenda, following a High Court ruling in February that the levels in many UK cities are ‘unlawful’. Given increasing pressure to do more to tackle this issue, along with rising inner-city congestion, councils are looking at new initiatives to cut traffic. These include calls for congestion charges, zero emissions zones and even a rumoured cable car for Oxford.
The estimated cost of congestion in the UK is predicted to rise 63% by 2030, to a cost of £21bn. British roads are some of the most populated in Europe, with double the number of traffic hotspots than Germany and France. The estimated cost of congestion in the UK is predicted to rise 63% by 2030, to a cost of £21bn. London, of course, is top of the congested heap. Its weight of traffic is set to also increase by 60% by 2031, according to Transport for London (TfL).
A major contributing factor is the number of delivery vehicles on the roads during peak times. TfL states a quarter of London’s traffic during the peak hours of 7-11am is freight. It’s easy to see why the numbers of delivery vans on the roads are increasing. The number of workplace deliveries being ordered by people who cannot accommodate home delivery is rising. Expectations when it comes to next day and even same day delivery of items are high. And according to TfL, van space itself is often underutilised, with many shipping fresh air and making multiple stops around the capital. In response, the London transport organisation advocates greater delivery consolidation – ensuring more space, in fewer vehicles, is used more effectively.
While TfL has focused on delivery consolidation, there are also options around changing delivery times themselves. This would spread out the weight of traffic and avoid peak congestion hours. After all, when roads are busy, it becomes a vicious cycle of more delivery vehicles being stuck in traffic, further reducing their efficiency in getting from drop-off to drop-off. It seems unlikely that consumer demands about quick and convenient delivery will decline – and of course as businesses and cities themselves become ever more dependent on technology due to the integration of smart ‘Internet of Things’ devices and other automation, there will also be a rising need in urban areas for quick provision of replacement parts and engineers to provide fast and efficient fixes. Without exploring different solutions for getting these parts from point A to point B, this could easily lead to more vehicles on the road, simply trying to minimise the impact of device downtime.
Until recently, delivering during off-peak times was not possible – where would be open at two in the morning to take delivery?Until recently, delivering during off-peak times was not possible – where would be open at two in the morning to take delivery?
Yet now, there are networks of consumer click and collect locations in newsagents, stores and locker banks all over urban areas, many of them accessible 24/7. Similar solutions for part delivery have been used across the country for years to increase efficiencies in the field service supply chain. These 24/7 accessible, fixed point delivery locations not only reduce the number of stops delivery vehicles make but also reduce the numbers of vehicles on the road in city centres. Using this kind of point-to-point delivery planning with lockers, located in convenient, edge of city locations, essential parts are easy to access with minimal environmental impact and maximum speed.
Delivery to these locations overnight reduces failed deliveries, allows for the more efficient use of vehicle capacity, and doesn’t add to the existing congestion problem. For businesses with a high frequency for these deliveries, or where the delivered parts are especially time-sensitive or high value, hosting their own secure drop-off location could well prove a significant boon in timely delivery of essential items.
Some believe that clogged and congested cities are a problem that will only get worse. At ByBox we believe no problem is insurmountable.With predictive analytics on stock levels and given increasingly ‘smart’ devices communicating their status back to businesses, it is even possible for these holding stock and collection points to house particularly critical parts in advance of breakdowns, so they are to hand well before they are needed as well as being able to collect multiple items from one location at the same time.
Some believe that clogged and congested cities are a problem that will only get worse. At ByBox we believe no problem is insurmountable.
New thinking facilitated by technological innovations which can reduce transportation costs and optimise delivery routes can also help to tackle some of the issues around inner-city congestion and air pollution. By approaching the issues differently when it comes to vehicle use, drop-off and delivery schedules can answer on environmental necessities, the effective flow of traffic around urban areas, and the needs of demanding and always-on customers.
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Jun 06, 2018 • Features • Advanced Services Group • aston university • Future of FIeld Service • Outcome based services • Podcast • field service • Service Management • Servitization • The Field Service Podcast • tim baines
Kris Oldland, Editor-in-Chief, Field Service News talks to Prof. Tim Baines about the recent Spring Servitization Conference hosted by The Advanced Services Group and how the conversation around servitization is continuing to evolve as academia and...
Kris Oldland, Editor-in-Chief, Field Service News talks to Prof. Tim Baines about the recent Spring Servitization Conference hosted by The Advanced Services Group and how the conversation around servitization is continuing to evolve as academia and industry come together to drive advanced services forwards...
NEVER MISS AN EPISODE! You can now subscribe to the Field Service Podcast via iTunes here
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Jun 06, 2018 • Management • News • Outsourced IT • field service • Getronics • Service Management
Getronics, the global ICT services group, has maintained market-leading customer satisfaction ratings in the last twelve months, according to the Whitelane 2018 UK IT Outsourcing Study.
Getronics, the global ICT services group, has maintained market-leading customer satisfaction ratings in the last twelve months, according to the Whitelane 2018 UK IT Outsourcing Study.
A selection of Getronics’ UK outsourcing customers were surveyed, yielding a general satisfaction rating of 79% (10% higher than the industry average of 69%) and, as a result, a top three ranking out of 31 service providers. This demonstrates the consistency of the group’s performance, having maintained a top-four position in this survey for the last four consecutive years, with no dissatisfied customers.
In Whitelane’s study, Getronics was evaluated on two of four types of outsourcing contracts:
- ‘end-user services and collaboration solutions’, ranking 1st overall and
- ‘data centre, managed infrastructure and hosting’, ranking 4th overall
Chairman and Group CEO of Getronics, Nana Baffour, said: “Our performance over the past four years shows that we have earned our reputation as a people-centric business, by focusing on adaptability, resilience and proactivity to deliver an exceptional user experience. This continued success is not just in the UK, but across Europe and is reflected in other Whitelane research success, for example, in Belgium. We are doing all the right things to maintain our reputation, and we work hard to keep doing those things to delight all our customers, year in, year out.”
The survey indicates a small decline in the rate of growth of IT outsourcing in the UK: 27% of UK organizations expect to outsource more in the next two years (down from 35% in 2017).
The survey suggests that the top five objectives for organisations that are outsourcing their IT services are, in order of importance:
- cost reduction (68%)
- access to resources (57%)
- improvements to service quality (48%)
- innovation (44%)
- enable focus on core business (42%)
The independent study was conducted by Whitelane in cooperation with PA Consulting. More than 240 CIOs, CFOs or their direct reports from the top IT spending organisations in the United Kingdom were surveyed, evaluating over 760 unique IT outsourcing relationships. This resulted in the evaluation and ranking of 31 service providers.
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Jun 04, 2018 • Features • Connected Field Service • Data • Data Analytics • Future of FIeld Service • white papers • White Papers & eBooks • eBECS • field service • field service management • field service software • Internet of Things • IoT • Service Management • Managing the Mobile Workforce
Field Service News, Editor-in-Chief Editor, Kris Oldland's latest white paper, sponsored by eBECS, explores why field service organisations should be ensuring their field service technicians are collecting data from assets whilst on service calls...
Field Service News, Editor-in-Chief Editor, Kris Oldland's latest white paper, sponsored by eBECS, explores why field service organisations should be ensuring their field service technicians are collecting data from assets whilst on service calls even if they aren't ready to implement an IoT based approach to service delivery yet as by doing so they can reap some of the benefits and more importantly build the processes for a future world in which connectivity and data will be at the heart of customer service operations...
Want to know more? The bad news is the full white paper is only available exclusively for fieldservicenews.com subscribers.
The good news is that if you are a field service practitioner then you may well qualify for a complimentary industry practitioner.
The even better news is we will send you a copy of this white paper when you apply as a welcome!
Click here to apply for your complimentary industry subscription to fieldservicenews.com and access the white paper now!
Note: Please do take the time to our T&Cs (available in plain English at fieldservicenews.com/subscribe) and note that this content is sponsored by eBECS
In today’s field service sector companies are facing an increasingly complex set of challenges and the collation and analysis of data paradoxically seem to often be found at both ends of the spectrum.
Data can be at the heart of many problems for a field service organisation as they struggle to find useful insight amongst ever-increasing banks of data locked away in differing business silos. Yet the rewards for breaking down those silos and also being able to identify where the insight is within your data can lead to better service levels than have ever been possible previously.
The vast amount of data that we have access to today can potentially give us a much more intimate understanding of our customer base than ever before, giving us the ability to understand and even predict their needs, far more accurately than we have ever been able to manage previously.
The vast amount of data that we have access to today can potentially give us a much more intimate understanding of our customer base than ever beforeHowever, the flip side of this benefit is that companies are now finding themselves drowning in data - which becomes meaningless without insight, a challenge which can be magnified further if data is locked away behind walls within an organisation.
It can be a daunting challenge to not only establish processes that allow the collection of data but also to ensure that when collected, data can move seamlessly across an organisation to fulfil its maximum potential. Yet in today’s business climate where service has become a core differentiator, there has perhaps never been a more urgent need to ensure you are harnessing every tool available to you in the most efficient manner in order to stay just one step ahead of the competition - and data certainly holds many of the keys to service excellence when it’s collected, processed and analysed correctly.
An interesting symptom of operating in a world of technological advancements, is that when we talk about data collection within a field service context the topic immediately turns to IoT - but in doing so are we overlooking one of the most important resource in a service organisation already at our disposal - the field service engineers themselves?
The importance of data collection in an increasingly connected world
The question of whether the Internet of Things will play a part in field service has been and gone. The answer was a resounding ‘yes it will.’
Research from Field Service News showed that 86% of companies were actively either developing plans to implement IoT or had already done so. Indeed, in terms of IoT and field service, the question for the overwhelming majority of companies has moved from why to how.
However, the impact of IoT in field service is set to be so revolutionary that it cannot just be viewed as a new technology to be rolled out, it is a decision which must be grounded with a firm understanding of your business strategies, your future goals and a rock solid foundation of both processes and technologies that can allow an organisation to fully reap the benefits of an IoT based service strategy.
But the revolution isn’t really an IoT revolution, it is a data revolution.
Asset performance data and even component performance data can open the doors towards moving towards both a more preventative maintenance focused approach as well as empowering your service engineers to be able to find a first-time-fix on a more regular basis.
Asset performance data and even component performance data can open the doors towards moving towards both a more preventative maintenance focused approach as well as empowering your service engineersYet, for many service organisations, the sheer volume of data that a fleet of connected assets will produce will cause a series of problems and pain points in and of itself.
With companies facing unprecedented levels of data coming into their service operation not only from IoT connected assets but also various digital customer touch points whether that be via contact agents, self-service portals or even sentiment analysis of relevant social media, finding meaning and value within such a deep data lakes can be a daunting task.
In addition to this, there is the further question of retrofitting assets that a discussion on IoT necessarily brings with it.
For organisations with a large install base there are a number of considerations that must be given thought including:
- Which assets are worth retrofitting with IoT connected sensors?
- Is it worth waiting for some assets in the field to reach their natural obsolescence and then replace them with newer connected models?
- Should you prioritise retrofitting assets for those clients that are the most profitable or will having multiple levels of service contract be a hindrance to service delivery?
- What data is it important to track from retro-fitted assets? What is essential and what is merely nice to have?
- What processes will you need to develop or adjust in order to facilitate this data within the workflow of your service delivery teams?
Want to know more? The bad news is the full white paper is only available exclusively for fieldservicenews.com subscribers.
The good news is that if you are a field service practitioner then you may well qualify for a complimentary industry practitioner.
The even better news is we will send you a copy of this white paper when you apply as a welcome!
Click here to apply for your complimentary industry subscription to fieldservicenews.com and access the white paper now!
Note: Please do take the time to our T&Cs (available in plain English at fieldservicenews.com/subscribe) and note that this content is sponsored by eBECS
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Jun 01, 2018 • Features • Coresystems • Future of FIeld Service • future of field service • manuel grenacher • Mobile • big data • cloud • field service • field service management • IoT • Service Management
Manuel Grenacher, CEO, Coresystems discusses the big three technologies that are driving field service productivity to ever greater heights...
Manuel Grenacher, CEO, Coresystems discusses the big three technologies that are driving field service productivity to ever greater heights...
More than 85 percent of field service professionals say that the strategic use of technology is a key driver of overall productivity.
Moreover, within the next two years, 70 percent of organizations will reference customer satisfaction as a primary benefit obtained from implementing modern field service management technology, according to Gartner.
Unfortunately, many organizations are resisting from updating systems due to a need to accommodate legacy systems, and are therefore missing out on the increased workforce efficiency and productivity that updated systems deliver.
[quote float="left"]Unfortunately, many organizations are resisting from updating systems due to a need to accommodate legacy systems[/quote]Recent technological progressions have made a significant impact on many industries - and field service is no exception. Keep in mind, it’s often quite difficult for businesses to ‘bolt on’ additional technology to legacy systems, and many these should be considering new projects aimed at reducing cost and improving agility. So, what is there to gain?
Big Data and Data Analytics
Big data and analytics functionalities present a digestible, clear view of relevant data, which allow staff to make real-time decisions.
Each step is visible and transparent, and companies can start offering customers more proactive service, such as more finely tuned maintenance schedule alerts or alerts on peripherals that need replacement, consistently.
Cloud and Connectivity
Many field service applications are anchored in the cloud, and this pay-on-demand nature allows businesses to reduce spend on software and hardware costs. The cloud provides an accessible, shared environment where, for example, call centre staff can access records pulled from phone, email, IM and social media – leading to quicker and improved customer service.
Technicians can also stream video, capture photos, surf the internet and communicate with connected networks and wearable technologies.
Mobility
Mobility has an impressive impact on field service workers’ productivity and efficiency. Field service workers can access real-time data and information about customer issues, machine conditions and operating environments.
What’s more, field service organizations that implement mobility solutions improve their first-time fix rates, SLA compliance levels, cash flow and field engineer utilization levels.
[quote float="right"]Companies that still use paper-based systems often have difficulty efficiently scheduling resources and tracking employee performance. [/quote]Companies that still use paper-based systems often have difficulty efficiently scheduling resources and tracking employee performance.
It also slows down invoicing, and even affects the company culture. While upgrading can be costly, legacy systems tend to be more expensive to maintain on almost every level. Software licensing models have changed, as have the nature of service agreements, and the cloud offers a cost-effective means to have an entire IT setup without the need for huge premises.
Employees who can perform their jobs without the administrative or operational baggage are happier and more efficient.
This is a positive result for companies as it translates into a proactive state-of-mind (employees critically thinking about what more can they do), rather than a reactive one (how can it be done).
The above summaries illustrate why enterprises should switch to current FSM solutions, rather than remaining with their legacy systems. We look forward to seeing (and experiencing) the results of these and future technological innovations in the service industry.
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Jun 01, 2018 • Features • Coresystems • Future of FIeld Service • future of field service • manuel grenacher • Mobile • big data • cloud • field service • field service management • IoT • Service Management
Manuel Grenacher, CEO, Coresystems discusses the big three technologies that are driving field service productivity to ever greater heights...
Manuel Grenacher, CEO, Coresystems discusses the big three technologies that are driving field service productivity to ever greater heights...
More than 85 percent of field service professionals say that the strategic use of technology is a key driver of overall productivity.
Moreover, within the next two years, 70 percent of organizations will reference customer satisfaction as a primary benefit obtained from implementing modern field service management technology, according to Gartner.
Unfortunately, many organizations are resisting from updating systems due to a need to accommodate legacy systems, and are therefore missing out on the increased workforce efficiency and productivity that updated systems deliver.
Unfortunately, many organizations are resisting from updating systems due to a need to accommodate legacy systemsRecent technological progressions have made a significant impact on many industries - and field service is no exception. Keep in mind, it’s often quite difficult for businesses to ‘bolt on’ additional technology to legacy systems, and many these should be considering new projects aimed at reducing cost and improving agility. So, what is there to gain?
Big Data and Data Analytics
Big data and analytics functionalities present a digestible, clear view of relevant data, which allow staff to make real-time decisions.
Each step is visible and transparent, and companies can start offering customers more proactive service, such as more finely tuned maintenance schedule alerts or alerts on peripherals that need replacement, consistently.
Cloud and Connectivity
Many field service applications are anchored in the cloud, and this pay-on-demand nature allows businesses to reduce spend on software and hardware costs. The cloud provides an accessible, shared environment where, for example, call centre staff can access records pulled from phone, email, IM and social media – leading to quicker and improved customer service.
Technicians can also stream video, capture photos, surf the internet and communicate with connected networks and wearable technologies.
Mobility
Mobility has an impressive impact on field service workers’ productivity and efficiency. Field service workers can access real-time data and information about customer issues, machine conditions and operating environments.
What’s more, field service organizations that implement mobility solutions improve their first-time fix rates, SLA compliance levels, cash flow and field engineer utilization levels.
Companies that still use paper-based systems often have difficulty efficiently scheduling resources and tracking employee performance. Companies that still use paper-based systems often have difficulty efficiently scheduling resources and tracking employee performance.
It also slows down invoicing, and even affects the company culture. While upgrading can be costly, legacy systems tend to be more expensive to maintain on almost every level. Software licensing models have changed, as have the nature of service agreements, and the cloud offers a cost-effective means to have an entire IT setup without the need for huge premises.
Employees who can perform their jobs without the administrative or operational baggage are happier and more efficient.
This is a positive result for companies as it translates into a proactive state-of-mind (employees critically thinking about what more can they do), rather than a reactive one (how can it be done).
The above summaries illustrate why enterprises should switch to current FSM solutions, rather than remaining with their legacy systems. We look forward to seeing (and experiencing) the results of these and future technological innovations in the service industry.
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May 31, 2018 • Features • Management • Hilbrand Rustema • Noventum Service Management • field service • field service management • Service Design • Service Evolution • Service Management
Two decades ago high tech companies blazed a new trail that saw them move away from the traditional transactional relationships they had with their customers as they embraced service as a route to sustainable and predictable revenue.
Two decades ago high tech companies blazed a new trail that saw them move away from the traditional transactional relationships they had with their customers as they embraced service as a route to sustainable and predictable revenue.
Other industries including the copier, medical and discrete manufacturing sectors have since followed suit and the evolutionary path to becoming a service led business is now clear explains Hilbrand Rustema, Managing Director, Noventum Service Management...
Twenty years ago, high tech companies such as IBM and HP were product driven organisations that sold hardware with a product warranty service.
Their products such as PC’s and servers were often mission-critical and too complex for customers to repair themselves. Once the warranty expired, customers had to pay for spare parts and on-site field service, also known as “Time and Materials”. These high-tech companies discovered that the service business was an interesting high margins and high growth business.
They adopted a new strategy to start focusing more on the Service Business. They created a new core service business with its own profit & loss statements, with dedicated senior managers at board level.They adopted a new strategy to start focusing more on the Service Business. They created a new core service business with its own profit & loss statements, with dedicated senior managers at board level.
Their customers then discovered that rather than buying services when you have a problem, it was cheaper and less disruptive to purchase preventive maintenance services.
Eventually the high-tech companies found out that to have predictable and profitable revenue it was necessary to create services that would guarantee a certain availability of the product This was the start of a category of services called “Availability Services” and the start of “Service Level Agreements” as a business model that closely resembles that of the insurance industry when it defines a price for the service based on the risks and value as perceived by customers.
Following the high-tech industry, other industries followed a similar evolution, for example:
- The copier industry with companies such as Xerox and Canon, now evolved into document management solutions;
- The Medical equipment companies such as Philips Healthcare, Siemens Healthcare and GE Healthcare that can now offer entire “Managed Hospital Services”
- Discrete manufacturing where machine manufacturers are now moving from reactive to preventive and predictive services using the Internet of Things technologies to accelerate the transformation towards more advanced services.
Since then these high-tech companies have converted themselves into full-service businesses that no longer sell only products and “Product Related Services”.
They have moved up higher in the value chain by offering “Customer Business Related Services” which we can bundle under the name Pro-Active Services.
The model below illustrates the typical evolution of a service business:
We see roughly three types of Customer Business Related Services:
- Process Optimisation Services are the first typical types of services whereby process expertise is used, for example, in process advisory, process compliance services or benchmarking services. Most often, the service provider agrees upon a certain business outcome or deliverables such as an advisory report, a process compliance report or a business improvement result such as an agreed productivity improvement.
- Business Optimisation Services address improvements in the business model of customers such as “Pay per Use” models where the technology provider also provides the financing of the technology, thereby offering the financial commitment to become an OPEX (Operational Expense) rather than a CAPEX (Capital Expenses) leaving the financing burden to the supplier who is often better able to manage the risks.
- Business Transformation Services help customers to implement strategic changes. The expertise of the service provider includes the ability to manage change together with their customer. The ability of organisations to adapt fast enough to changing market conditions has become one of the most important drivers of success. Service providers may take over entire processes or functions and manage this with (Managed Service) or for (Business Process Outsourcing) their customer.
We see roughly four types of Product Related Services:
- Warranty and Time & Materials Services: Service organisations typically start off offering warranty services to their products. After the warranty period, customers start to request additional services. When a service organisation responds to this request, they most likely offer time & material services.
- Preventive maintenance: Preventive maintenance services aim to reduce the cost of time & material services. They can do so by planning ahead based on the product lifecycle and reducing the cost of delivery of services as they can be provided without urgencies.
- Availability Services: The next step is when customers only look at when a product is available for use and consider the cost of unplanned downtime. The service provider guarantees a certain level of equipment uptime or response time. The customer will balance the perceived risk of downtime with the price they are willing to pay. The service contract or service level agreement (SLA) usually renews automatically every year and therefore generates predictable revenues for the service provider, and represents a predictable cost for the customer.
Once organisations start to look beyond the level of the product, they find out that they have a lot of knowledge to help their customers improve their processes and even their complete business.
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