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In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

The first question of this topic was "Just how big is the potential impact of IoT on Field Service?"  whilst the second answered was "Is IoT now making the shift from early adoption to mass adoption amongst field service companies?" and last week the questions was "What are the challenges of implementing an IoT strategy within field service operation?

And now the final question on this topic

 

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Question Four: Are field service companies who are not adopting IoT at risk of becoming non- competitive?

The urgency around IoT adoption varies from one vertical industry to the next, but the cost of service delivery and need for greater visibility are universal concerns. The old business adage “you manage what you measure” certainly applies.

If your competitors have a level of insight that enables them to increase the number of jobs per technician per day or reduce critical failures by 90% thanks to preventative measure, the business benefits are powerful and quantifiable.

Increased efficiency and productivity, and slashing the cost of missed SLA penalties, that has direct impact on customer satisfaction and profitability. IoT can deliver exactly these types of insights and business outcomes, and only service organisations that invest in IoT capabilities will reap these rewards.

 

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In a word, yes. This is much more than just a ‘nice to have’ scenario. In most industries, margins are too thin and competition is too fierce to simply guesstimate how much capacity a piece of equipment can cope with, and it seems positively archaic to run a reactive break/fix service mentality in today’s connected age.

Industrial downtime is no joke. Unplanned downtime in just about every industry has a significant impact.

The Aberdeen Group last year reported that the cost of downtime across industries went up to $260,000 per hour on average between 2014 and 2016. That’s a huge jump with a considerable hit on any business.

On top of that, most companies don’t know how best to optimise uptime availability in different conditions, such as managing volatility, meeting peak demand or managing performance in extreme conditions. If your competitors are addressing this problem and you’re not, you’re surrendering market share. Digital disruption is set to wipe out 40% of the Fortune 500 companies in the next 10 years and the Industrial Internet will play a big part in that disruption, as well as the survival and success of companies.

The question isn’t why would you, but rather why wouldn’t you?

 

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Definitely!

The potential gains in cost efficiency and improved service offerings are tremendous. IoT has the potential to disrupt entire industries. Organisations that aren’t educating themselves on the potential, road mapping an IoT strategy, or structuring their organisation to be IoT-ready may not see the risk now but they will definitely be laggards in 5-10 years.

IDC predicts that the installed base of IoT endpoints will grow to more than 30 billion by the end of the decade from just less than 13 billion units in 2015.

As a consequence, machine-generated data will comprise an increasing share of stored data: by 2020, 10 percent of the 44 zettabyte digital universe will originate from IoT devices.

In five years, there will be seven times more IoT data than there is today.

 

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Look out of the next topic in our Big Discussion series coming soon... 

 

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There has been considerable Mergers and Acquisitions activity amongst field service management solution providers across the last eighteen months. At the same time we have seen a rapid rise in the adoption of servitization based business models, which has driven a move away from traditional break-fix SLA based maintenance contracts to contracts based around guarantees of uptime and availability.

Does this provide both the opportunity and the need for the development of new breed of field based platforms - the Service ERP? Kris Oldland, FSN Editor-in-Chief, reports...

For as long as there has been Field Service Management (FSM) Solutions there has always been a conversation around how well a solution integrates with other key business systems in the B2B world it has largely been about connecting through an ERP system, in B2C the same conversation was centred around bolting on a field service solution onto a CRM.

Indeed for many years use of a dedicated FSM system could be avoided entirely either by some clever and hugely laborious recoding of the functionality of an existing tool such as SAP or Oracle for example, or alternatively some equally ingenious means of reworking existing processes and relabelling existing form fields to find a semi-workable solution.

Something a bit W Heath-Robinson that could involved going from 'a' to 'j' via 'e' all just to get to 'b', but something that kind of did the job.

 

However, with the advent of Cloud computing and the democratising impact of the emergence of the SaaS revenue model we have seen a far greater and more widespread adoption of FSM systems from companies of all sizes in all sectors.

In turn, this increased use of FSM systems has driven further product development and feature enhancements in what is a relatively small but Undoubtedly fiercely competitive sector.

Meanwhile, we have also seen service, and in particular field service rise in importance amongst the executive boards in all areas as the world begins to adapt to the twenty first century and it’s service centric, on-demand driven business models. Uber and Amazon are thrown around constantly as examples of best practice (even though the former have yet to break even apparently) in today’s data driven world, and are very much tools of their time.

Closer to home within FSM systems, indeed the gig-economy is one of a number of new twenty first century additions to the field service equation - as are challenges of an ageing workforce, dealing with a customer base more empowered and more vocal (via the joy of social media) than ever before, plus the emergence of game changing technology such as IoT and Augmented Reality.

With the investment in solutions at an all time high, we are seeing an emerging race to become the dominate platform for the increasingly lucrative and important field service sector begin to heat up with a series of FSM providers including IFS, ServicePower, ServiceMax, ClickSoftware and Telogis all being acquired - and the story in the large part is very much the same from each of them - the investment is intended to help them get to their technology (and sales and marketing) ready to take a podium finish.

This of course is driving development in terms of technology, further and faster than ever before.

Indeed, functionality within FSM systems has now become widespread and diverse that the standard terminology is shifting to a full ‘end-to-end’ platforms. Solutions that not only include field service management elements such as scheduling and job reporting but also incorporate wider spectrums such as parts and inventory management, asset management and reverse logistics Have we finally reached a point where we can see the solutions that are essentially today’s FSM systems ready to step out of the shadows of their business software cousins CRM and ERP and stand shoulder to shoulder with them as an equally valid business system?

 

With all the investment in the FSM sector are we reaching a point where FSM systems will no longer be just a humble add on for ERP but a mission critical service and business delivery platform within it’s own right. You use your ERP for product-based activities you FSM system for all service and aftermarket related activities with a CRM, and financial package sitting across the perhaps? Of course, the likes of Gartner and other such important acronym makers would argue (and they’d have a point to be fair) that such a system would be probably a bit more than FSM so we would need a new bunch of letters to put together.

My humble suggestion would be Service ERP (sERP) but this may cause confusion with those pesky marketeer types and their Search Engine Results Pages (hence why I went with a small s at the front), but quite frankly other than needing something to refer to in this article, I’ll let the real industry makers work that one out.

The important thing is the concept - which I genuinely think is the logical conclusion of all this talk around FSM platforms.

We are at a level now with integration and cloud technology, where things just talk to each other naturally, or at least they are supposed to and that is definitely the path we’re heading down.

 

With this in mind, I believe the route we are heading down will lead us to a point where companies will look at their mix of business systems and say OK my ERP is SAP (for example) and that handles my production and manufacturing side of a business.

And then my sERP/FSM system - which includes scheduling, a mobile piece (including Augmented Reality), customer management (including CSAT and other customer engagement pieces), parts management, reverse logistics, asset management (including IoT connectivity) and anything and everything else required for running the service and aftermarket side of the business - is in place to run that part of our operations.

Essentially, for a company that only offers third party service, the sERP platform could be all they need as long as it included a light CRM embedded in there as well.

From a field service management perspective there has always been a feeling that FSM has always been the bridesmaid and would never be the bride, that we would always be the slightly poorer relations feeding off the table crumbs of our close, yet infinitely more important cousins in the ERP and CRM world.

But given the rising growth in importance of service in the global business ecosystem, given the amount of Tier A companies shifting their business models, at least in part, to a servitized business model where delivery of uptime replaces traditional break-fix SLAs and sloppy service will result in direct loss of revenue – it is of little surprise that those companies offering the tools to ensure that service is delivered as efficiently and productively as possible have become a major focus for investment of late.

As mentioned above FSM is rapidly gaining in recognition as an important tool within the business software ecosystem, the question is just where will that rise to prominence end – so is the prospect of FSM ultimately being the opposite side of the coin to ERP likely?

Or is it just a short-term bubble as the world realigns itself to a more service orientated future and the major ERP players re-interpret their platforms to add more attention and focus to service related activities and how to optimise those into their own mix?

 

I recently discussed this conversation at length with Marne Martin, CEO of ServicePower, one of the key organisations within the FSM sector that have recently attracted significant Private Equity investment.

It is interesting to note that as with the private equity investment in both ClickSoftware and IFS, the intention does not appear to either asset strip the technology and look for a quick buck or prime the business for a bigger sale in the near future - which is so often the case of such investments. In fact, in all three cases it seems that the goal is to plough further resources into R&D and marketing to help each respective company flourish. In the case of ServicePower it is very much a case of a boost in resources to help meet what Martin sees as their own longer term vision a lot quicker than they could have done so organically.

Indeed, Martin’s comments on the matter are almost an exact echo of what Paul Massey Managing Director, IFS and Dave Yarnold, CEO, ServiceMax told me when I spoke to them both about the recent investments within their own businesses.

Yes, the cynic in me might see the similar sound bites as nothing more than holding up a business-as-normal-here flag to allay any customer fears and perhaps even more importantly those of prospective customers. Yet, I don’t think that is the case. At the last IFS world conference, Massey (and indeed CEO Alastair Sorbie) made a big point about Field Service being one of the top three priorities for the business in the wake of investment from EQT, given they are an ERP provider with a lot of other areas of focus within their business, this in itself was a significant endorsement of the vibrancy of the sector.

Similarly, when speaking with Yarnold about why GE Digital was the right home for ServiceMax, the conversation was very much focussed around how having access to both the technology of the Predix platform but also importantly the brand power of GE to open doors at the C-Suite level of enterprise, was a significant factor.

Close to a Billion $USD will certainly be part of the reason GE Digital were able to bring the market leader of an increasingly important technology market into their fold, but one also suspects that the opportunity for Yarnold to further expand his vision and ambition for the system he and two others launched in California just over a decade ago was another fundamental element to why GE Digital was the right destination.

Indeed he even commented at the “I didn’t just want to see us end up as part of another CRM/ERP system”.

So did Martin agree with my assertions that FSM would become equally as powerful and important as CRM and ERP in the future?

“I believe so, but with a few caveats” she replied

“If you think about what a CRM does, in it’s most basic, a lot of CRMs are structured around loading in your customer data, their buying patterns, and their contacts – so if you have sales people that churn then you have all that data still. At it’s most simplistic that is what a CRM covers at the basic level. That is pretty straight forward. And if they want all of the other functionalities of a more robust CRM provider then they can pay for it from one of the million and one CRM providers.”

“It’s the same as when you think of a typical ERP - a lot of that is built around finance and accounting packages there’s a million good finance and accounting packages out there and we’re not trying to become a finance - what we are interested in is the use cases around a mobile worker.”

“Give the mobile worker the tools to do everything they need to do in their business. So that they can access what they need to know about the customer, about the asset, where parts are, what they need to do on the  service contracts and so on.”

“The potential for a lot of this to be completed within a standalone FSM platform – that incorporates the spare parts management, warranty management, service sales CRM alongside the more traditional aspects of FSM such as scheduling and parts management etc is certainly there.”

 

Of course, one of the big shifts that we have seen in recent years is the power of data to transform the way we operationalise our business as Business Intelligence platforms powered by the Cloud, IoT and Big Data give field service organisations greater visibility into both their customers and their own operations more than ever before.

At large we are seeing a seismic shift in how field service is measured, both in terms of operational and success metrics.

“That’s very true.” Martin agreed when I put this point to her.

“The field service industry really is in a state of evolution. It’s on the verge of transforming itself into both a customer centric focus looking to bring the power of customer relationship management into the field, while also incorporating technology around machine learning, Internet of Things, and more actionable insights from data.”

“That’s also what is attracting so much acquisition activity. To get to the next level, any business with field based resources must invest in technology and business process consulting to move forward. Mobile workforce management is key to any organisation performing activities away from a plant or office.”

“We are still seeing companies at differing levels of business or use case complexity, some still moving from paper or less sophisticated platforms and others ready to move beyond their current technology to the next level technology in order to incorporate actionable insights and efficiencies from emerging technologies like wearables and IoT, the power of big data, and machine learning are also now realities. Whereas in the past they were nebulous concepts, their ability to be incorporated into mobile workforce software is reality today.”

Perhaps at the heart of the current spate of rapid development within our sector is the fact that all of these emerging technologies can be combined to solve traditional challenges. Whilst they can bring value to service operations by themselves it is when harnessed together alongside existing technologies that we are seeing true leaps forward.

“Each [technology] can be used in conjunction with products like ours to improve productivity, and reduce schedule costs, improving the overall operational metrics, and of course the power of cloud computing is what enables all this to be provided with greater flexibility and value to the customer,” adds Martin.

 

But as we mentioned earlier there is a whiff of chicken and egg in the question as to whether business models are driving a need for improved technology or vice versa. Martin also recognises this fact.

“It is key to recognise that the shift isn’t only about technology adoption, the industry is moving quickly towards a more consumer-centric model where the customer experience is the overriding measure of success,” she explains.

“KPIs like schedule adherence and mean time to schedule continue to be indicative of customer satisfaction, however, up-time, customer value, and propensity to purchase additional services are emerging as more dominant, and are increasingly where focus and resources are applied, to improve profitability.”

“Customer relationship management is about more than getting your sales people to sell to your accounts. It has to be about how you delight the customer after the purchase of the equipment or service contract so that they stay with you, and come back for more.”

“We have also seen so much investment into call centre technology, but in reality, customers don’t want to talk to a call centre if they don’t have to. So technologies which improve the experience, like self-service customer portals which offer the ability to book real time appointments, monitor status, and interact with scheduled mobile workers before and during the visit, integrated knowledge management, machine learning, and actionable insights are what drive additional or longer term revenue, driving profitability. Customer satisfaction and profitability are the new reality for field service organisations.”

So the billion dollar question for Martin and her peers in the industry is has FSM become about more than just field service now? So where does she see the industry moving now?

Indeed, where are ServicePower heading now?

“As I said, to get to the next level, any business with resources that travel beyond a given plant or office must invest in technology to move towards improved profitability and efficiency. An integrated platform is also necessary in order to not run a business in silos, but actually with the greatest intelligence related to maximising the overall performance,” she replied.

As Adam Smith said, it is about labour, capital – and now technology. Staff, parts (if applicable), and technology all need to work together for a common goal. This is also why mobile workforce technology should be on top of mind for the C-suite. CRM and ERP technology isn’t enough to have a great performing organisation if you have workers in the field”

“Mobile workforce management technology therefore isn’t only for organisations which offer field service, traditionally thought of as repair or maintenance. Any mobile worker’s productivity can be improved, the customer experience can be improved, while those traditional metrics like cost and mean time to schedule can be improved at the same time.”

“What I see often is that not only does technology have a role to play, but also equally critically, companies must be looking at business and field processes, and how to use the data within an organisation to agree actionable insights.”

“By that definition, the addressable market for mobile workforce technology expands exponentially, including any organisation with feet on the street. Consider the Salesforce ecosystem. Salesforce users range from traditional wrench turners, to home healthcare, sale forces offered by big box home retailers, pharmaceutical reps, to financial planners, government, and housing and facilities. The list of businesses which rely on people delivering ‘services’ in the field is enormous and expanding.”

 

“Mobile workforce management can be used in every one of those verticals to improve the service delivery process, improve operational metrics and delight the customer, which in turn drives additional revenue. It also when applied with the customer facing technologies as well, can bring the power of the CRM to the customer you want to retain and make another investment in your equipment or services after the point of sale. Only mobile workforce management takes your brand and your people to your current customers in a way that CRM and ERP does not.”

In conclusion she adds the final statement “The opportunity for our market is exponential.”

And I wholeheartedly concur with her on this.

We may see a few new acronyms pop up in the next few years but the future of FSM, in whatever new guise it may take, looks to be in a good place.

 

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In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

The first question of this topic was "Just how big is the potential impact of IoT on Field Service?"  whilst the second answered was "Is IoT now making the shift from early adoption to mass adoption amongst field service companies?"

So let's move onto the third question of the topic...

 

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Question Three: What are the challenges of implementing an IoT strategy within field service operation?

One of the biggest challenges of marrying IoT and field service is developing the technological infrastructure to capture, process, and respond to the data collected by IoT-enabled assets. Turning voluminous data into business intelligence will require service organisations to completely rethink their operations.

If a machine can tell you an uncomplicated part needs replacement, will you be able to dispatch a junior (and therefore less expensive) resource to provide maintenance; or simply deliver the part to the customer by drone? Will you be able to do so without human intervention? Will you be able to use IoT data to optimise scheduling preventive maintenance while reserving capacity for emergency work?

In order to fully realise the benefits of IoT, field service organisations will need to incorporate artificial intelligence driven service automation solutions that integrate with their other systems. IT support will be increasingly important, as well as expertise in data science.

 

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There are still some hurdles to overcome in the wider context, such as security, data storage, infrastructure demands, and the knock-on effects across a company’s wider IT systems. But many of the data protection issues and cyber threats have been addressed by the development of more sophisticated edge computing devices and edge to Cloud technologies, as well as putting some of intelligence and logic (AI) power and computing next to the critical asset. Very few companies have the expertise in-house required to protect industrial data, so you should engage data science cyber security specialists where it makes sense.

There’s also the question of who in a company can best lead the digital charge. Companies need a person or team that can bridge the gap between IT, service and operations so that all competing priorities are met. It’s an easier issue for larger companies to address as they have a greater breadth of talent pool and a wider range of skills.

I also think mindset can be an inhibitor or an accelerator. Most people can think big, but the potential of the Industrial Internet means you can think bigger. You’ve got to sit down and look of the art of the possible and then map a digital strategy to it. There’s lots of help available in this area, such as dedicated foundries, maturity assessments et al, but people don’t know they exist.

 

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Like many things, it depends:

If equipment is high-value and expected to have a long life, you need to retrofit them with sensors.

Those sensors may be 3rd-party.

Many facilities, even today, have limited bandwidth available to them. This can make transmitting data from many sources challenging.

For third-party service providers there’s the question of data ownership. Who owns information collected about how equipment is being used and is performing? The service provider? The OEM? The customer?

Fundamentally, the biggest challenge with adopting and implementing IoT is having the right structure and systems in place to maximise its value. It doesn’t serves an organisation to have the ability to collect data from assets if that data is not processed and actioned in real-time.

Organisations need business process intelligence, optimised field service management, and real-time visibility to truly maximise the potential of IoT.

 

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Next weeks the final question of this topic: Are field service companies who are not adopting IoT at risk of becoming non- competitive?

 

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In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

The first question of this topic was "Just how big is the potential impact of IoT on Field Service?" 

And onto this week's question...

 

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Question Two: Is IoT now making the shift from early adoption to mass adoption amongst field service companies?

Although IoT in field service is still relatively new, early adopters like manufacturers of capital equipment are approaching greater maturity. They’re leapfrogging other industries in terms of first-time fix rates and overall operational efficiency.

Other industries are beginning to recognise the potential benefits, and we’re seeing conversations around IoT shift from wide-eyed wonder to practical next steps. Utility and telecommunications providers are well positioned to benefit by making the infrastructure they maintain smarter and better connected. Consumer-facing organisations can better empower customers to participate in diagnosing and repairing problems.

The Smart Meter initiative in the UK is a perfect example where mass adoption by consumers will force manufacturers to advance. A couple years ago IoT in service was largely seen as tomorrow’s problem.

Today service providers are eager to take the next step.

 

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IoT hasn’t reached mass adoption in any market just yet, but certainly field service is seen as the ‘killer app’ for businesses. And it’s making fast progress.

Senior management are realising that service is the hidden gem within their organisations, largely due to the untapped potential of the Industrial Internet, and it’s something we’re seeing in our own global customer base.

Fuelled by the shift to outcome-based service models, shrinking product margins, and globalisation, and the Industrial Internet, industry watchers have been predicting that service revenue will eventually eclipse product revenue. Smart, connected, optimised equipment assets are accelerating that shift.

As companies begin to properly monetise service with sensors at the edge, they have the opportunity to increase service revenues and margins further, providing an effective hedge in a downturn economy.

That’s why we’re seeing greater adoption and acceleration in this space.

 

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Yes. The concept of IoT and IIoT (Industrial Internet of Things) isn’t a new one.

It has been around for more than 20 years. But now, thanks to advances in technology and digital transformation, it is at the forefront of business opportunity. There are many field service sectors that have already been working with sensors and IoT technology for a few years now, such as the medical industry (like the IFS customer Sysmex).

Over the next five years we will no doubt see the number of IoT implementations rise among field service organisations as the industry becomes regulated and more best-practice cases are publicised.

 

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Next weeks question: What are the challenges of implementing an IoT strategy within field service operation?

 

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In the Big Discussion we take one topic, bring together three leading experts on that topic and put four key questions to them across four weeks to help us better understand its potential impact on the field service sector...

This time around we turn to a brand new topic which is the Internet of Things and our experts are Paul Whitelam, ClickSoftware, Mark Homer, ServiceMax from GE Digital and Mark Brewer, IFS...

And so onto the first question on the topic...

 

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Question One: Just how big is the potential impact of IoT on Field Service?

The Internet of Things is already transforming field service. Service has traditionally been a reactive practice. Something breaks, a technician is dispatched to fix it, and sometimes the repair is successful the first time. IoT enabled devices provide ongoing visibility into the status of a piece of equipment, as well as a richer view of the severity and source of any issues, and the ability to make predictions based on this information.

The service organisation no longer waits for a panicked phone call from a customer. They can proactively maintain equipment, replace components before they break, and use an understanding of asset lifecycle and usage patterns to inform future product design.

Customers increasingly expect to pay for uptime instead of equipment, and define SLAs based on their business targets. Eventually, all service organisations will have to live up the expectation of seamless  service and minimised  disruptions.

 

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The potential of IoT – and more importantly IIoT (the Industrial Internet of Things) – is immense. So much so, that it’s making service a game changer, fundamentally changing how we optimise equipment and capital assets, and predict their maintenance and service requirements.

By harvesting and applying intelligence that previously would have been impossible to obtain, companies are seeing a major step change this area - that’s why more forward thinking companies are combining IoT-enabled field service management with asset performance management.

This is emerging as the real disruptor because for the first time, customers have meaningful performance and service intelligence at their fingertips to understand potential equipment issues, and pre-empt them or act upon them quickly and efficiently with the correct tools and parts.

It’s important to remember that prescription is equally as valuable as prediction - prescription to make adjustments or refine parameters to improve productivity or throughout, or keep something running to the next planned service outage. That’s one of the things that makes the Industrial Internet so powerful – you can do load balancing, and share the flow and volume across multiple appliances or machines using condition-based monitoring to switch machines in high volume usage areas when required.

 

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IoT has huge potential to transform field service organisations. The concept and technologies allows organisations to take data collected from remote sites and equipment to:

Gain better insights into the usage of equipment.

This will help determine when to perform optimal service. Rather than send technicians to sites on a schedule, you can send them only when you need to. For example, say you service a solar park. One of the main things that can lead to damage solar modules is wind. By remotely tracking the wind speeds, you can better estimate when to perform service.

Run a leaner service organisation.

One challenge service organisations encounter is that they’re reactive in nature. They respond to equipment failing. And without real-time information of equipment, when the equipment fails is unpredictable. This requires the organisations to maintain a fair amount of slack. Both within the inventory they manage, and the people that they’re made up of. Knowing when equipment will likely need service or when it will reach its end of life allows you to better plan.

Improve the competitiveness of your service offerings.

IoT, combined with machine learning, allows you to address problems before they occur. This results in higher availability of your equipment and lower service costs. You can pass this to your customers by improving your service terms and conditions. Higher SLA targets and compliance delivered at lower cost is a win-win all around.

 

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Next weeks question: Is IoT now making the shift from early adoption to mass adoption amongst field service companies?

 

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Kris Oldland deliver's his editorial leader in issue 17 of Field Service News where our theme was the ever changing nature of field service...

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Field Service News subscribers are entitled to our bi-monthly magazine in both print and digital versions. Subscription is free for field service professionals click here to apply for a complimentary industry professional subscription now and get a digital copy of issue 17 sent straight to your inbox instantly

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Now any regular readers of this column will know that I’m a big fan of change.

Not that I think change needs to be wholesale and sweeping. No I subscribe much more to the journey of continuous improvement method of change. I like the concept of constant refinement, of being in constant Beta.

As a result of such an outlook I do tend to focus on innovation quite closely, which is a happy coincidence that there seems to be constant innovation within the field service sector too.

So I often talk about changes in our industry. Changes in business processes such as the shift towards servitization or the concept of crowd service

Changes in technology such as the emergence of Augmented Reality and IOT as two highly credible emerging technologies that the field service industry must embrace.

Even, the changing skill-profile of the field engineer as an incoming generation replaces an ageing outgoing one.

But the change referred to in this edition of Field Service News is actually a completely different type of change and for once I found myself wondering if such seismic change within our industry is good for us.

That change is amongst the solution providers, the pioneers and innovators that helped usher in so much of the revolution we are currently experiencing.

 

In the last 18 months we have seen most of the big names in field service  management solutions being acquired. Tesseract, IFS, ServiceMax, ClickSoftware, Telogis, and most recently ServicePower have all been bought up and that’s just a few from the top of my head.

There are many, many more.

The thing is that all of these companies had a common thread that allowed them to thrive in our industry. They were all independent companies who truly understood and cared about field service.

If I recall correctly the redesign of Solarvista a few years back took 3 MILLION lines of code, more than it takes to send a shuttle up to the space station, there are far easier sectors to enter, far easier places to make money as a software provider.

But it was the passion to help drive service forwards that was at the heart of many of these companies’ success.

Colin Brown former MD and founder at Tesseract for example came from an engineer background himself, so he got the challenges that companies were facing and was able to tailor that into a series of industry first solutions (i.e. first windows based solution, first browser based solution, first SaaS solution).

Similarly, Dave Yarnold, CEO at ServiceMax has spoken at great length about the importance of service - even going as far as to described ServiceMax once as a Field Service Enablement company who happen to use technology to do so.

And while Yarnold, remains on board in ServiceMax’s new guise as part of the GE Brand one just hopes that is infectious enthusiasm for great service delivery isn’t diluted by being in a bigger pond.

Indeed, the message from almost all camps is that it is business as usual just with bigger expectations, and quicker developments. On the surface it all sounds great and I must admit that it is fantastic to see the field service sector become such hot property globally - it’s just when so many great independent companies are bought within quick succession of each other it does make me a little nervous.

All Change maybe fine, just not at once, is all I’m asking.

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Today at Minds + Machines Europe, GE  outlined the course they have mapped out for digital industrial growth, unveiling solutions aimed squarely at the world of industrial assets, environments and operations.

The event has aimed to outline a path towards greater productivity for customers who take up the advances in their Asset Performance Management (APM) and ServiceMax industrial applications, powered by Predix, GE’s platform for the Industrial Internet.

“Europe can lead the digital industrial era,” said GE Chairman and CEO Jeff Immelt. “Investment in technology, such as automation, advanced manufacturing, and artificial intelligence – along with new skills – can transform industry and drive productivity. GE has long been committed to Europe, and we are invested in its future.”

Delivering the Industrial Service Model of the Future

Transformation of the current industrial service model is a critical element of the digital industrial journey. Most companies today lack the ability to combine insights from data with actions in real time when managing and servicing assets. This contributes to unplanned downtime, which has significant impact on industrial productivity.

To reduce cost and eliminate downtime, it is critical for asset-intensive industries to shift from a reactive, break/fix service model to a predictive model. This change will help companies better understand potential equipment issues preemptively or act upon them quickly with the correct tools and parts.

To achieve this, GE Digital unveiled an integrated solution to deliver the industrial service model of the future that combines the power of ServiceMax, its cloud-based field service management (FSM) solution, with its intelligent Asset Performance Management portfolio. Available in late 2017, the combination of ServiceMax + APM will enable industrial companies to transform how they predict, manage and service the entire asset lifecycle.

“The Industrial Internet is enabling companies to take advantage of possibilities that previously seemed out of reach. But in many ways, we are still in the early stages of this transformation journey as companies seek to move from gaining insight to taking action and as automation gives way to autonomous systems,” said Bill Ruh, CEO, GE Digital. “GE Digital is helping companies use technology and information to transform how they operate and create new possibilities – from delivering the industrial service model of the future to creating entirely new business models.”

 

GE Digital’s APM and FSM solutions automatically collect and analyze service data – from predictive maintenance needs to failure information and recommended work actions – to help industrial companies move beyond traditional asset monitoring to advanced predictive maintenance and asset performance management.

This new approach also provides enhanced scheduling capabilities. Matching customers’ service workforces with their service needs, the offering helps industrial companies dispatch the right engineers to the right job at the right time – and ensure they are qualified, prepared and equipped to successfully complete their work. Receiving updates from workers in the field, the software provides a closed loop from issue identification to resolution, while 'learning' about the most efficient issue resolution methods over time to improve analytics with each alert.

As companies accelerate digital transformation through the combination of GE Digital’s APM and ServiceMax offerings, they can more proactively manage the entire asset lifecycle, increasing productivity and operational efficiencies that can open the door to future business growth.

Transforming service at the edge

Additionally, GE Ventures today launched Avitas Systems, a new data-driven company that will use predictive data analytics, robotics and artificial intelligence (AI) to deliver advanced inspection services to the oil and gas, transportation and energy industries.

“The inspection services industry requires cutting-edge technologies to avoid unplanned asset downtime and deliver new, valuable insights,” said Alex Tepper, Managing Director of Avitas Systems. “We deploy state-of-the-art robotics and cloud-based technology to give customers the customised service and insights-based data they need to advance from reactive to predictive repair – no matter where their assets are located.”

The Avitas Systems solution, using the Predix platform, is built to support the unique service needs of companies with remote assets, particularly in the oil and gas, transportation and energy industries. The solution helps customers analyse inspection data, integrates regulatory and external sources, such as weather, identifies defects automatically and recommends optimal inspection and maintenance schedules. The system can fuse data from diverse sources and independently analyse the relationships between them for deeper insights – and incorporates user feedback to make defect detection smarter and more accurate.

 

By reducing high-risk tasks through robotics, Avitas Systems can make inspection processes safer and more efficient through data automation, decreasing costs by up to 25%. By performing inspections based on anticipated risk, instead of regular time intervals, Avitas Systems can also help to increase asset longevity.

GE estimates that service transformation represents a $40 billion market opportunity. With ServiceMax + APM and Avitas Systems, GE is helping industrial companies manage, optimize and gain insight into their assets across each stage of the lifecycle – all driven by Predix. As the only platform that provides computing capabilities from the edge to the cloud, Predix gives GE customers visibility, control and analytic insights to every part of their industrial infrastructure and operations.

Transforming Energy Management and Customer Operations  

GE also announced a suite of new industrial applications, solutions and partnerships to help companies take advantage of the Industrial Internet – moving beyond the factory walls to enable the digital industrial companies of the future. The solutions build on GE’s expansive suite of Predix-powered tools and applications purpose-built for the Industrial Internet.

• Data-Optimized Energy Trading & the ‘Digital Utility’: To help utilities navigate the changing energy market, GE Power unveiled the ’Digital Utility,’ a suite of Predix-based applications that connect real-time machine data with a utility’s profitability. The new Business Optimization software is first of its kind, bringing analytics to the business side of power and utilities companies to help energy traders act profitably in long-term, day-ahead and short-term wholesale markets. The Digital Utility includes updates to GE Power’s Operations Optimization software, incorporating closed-loop analytics to improve generation efficiency for entire fleets. Additionally, GE’s APM solutions for energy businesses now connect all assets across the entire Electricity Value Network (EVN) in an integrated application, providing customers with a single view of assets spanning power generation to the grid.
• Advanced Utility Operations: GE Digital alliance partner PwC showcased its Predix-powered commercial operations solution for utility companies. This solution enables executives to identify margin ‘leakage.’ The solution analyses plant performance data from GE’s Operations Optimisation application, commercial data from dispatch and market-facing system from GE's Business Optimisation application. The solution is expected to launch this summer.
• Reduced Carbon Dioxide Emissions: GE Distributed Power and Dalkia announced that through GE distributor Clarke Energy, the companies have equipped more than one-third of Dalkia’s 170+ Jenbacher gas engines with GE’s myPlant* APM solution, powered by Predix. In total, the fleet of engines could power more than 240,000 French households, resulting in lower carbon dioxide emissions – which equates to taking nearly 100,000 European cars off the road annually.
• Predix-Powered Clean Energy: GE Renewable Energy and Fina Enerji signed a 10-year full service agreement that covers 150 GE wind turbines in Turkey. The deal will implement GE’s Predix-based Digital Wind Farm hardware and software solutions, which use data analytics to increase wind farm operations. With these digital capabilities, GE Renewable Energy will help develop smarter wind power forecasts for the Turkish market.
• Predix-Enabled Additive Manufacturing: GE Additive will add Predix edge technology to its Concept Laser M2 cusing additive machines. This move allows customers to remotely monitor and collect data from their machines – helping them analyse trends and uncover insights to improve asset performance and operations.
• Data-Driven Drilling: Last year, GE's Marine Solutions and Maersk Drilling announced a partnership to collaborate on a data analytic-driven pilot project, aimed at increasing Maersk’s drilling vessel’s productivity by reducing maintenance costs by up to 20 percent and increasing drilling productivity. The deployment of SeaStream* Insight, GE’s APM solution for Marine powered by Predix, is already showing great potential, and Maersk and GE are looking to expand onto Maersk’s second rig, Interceptor, to broaden the outcomes achieved from the pilot project.

Together, these solutions and deployments advance GE’s vision for the Industrial Internet with a portfolio designed to accelerate customers’ transformation journeys and create new paths to growth for customers of every size and scale.

Minds + Machines Europe 2017 convenes the best and the brightest of the technology world —including GE customers, developers, partners, industry luminaries and technology thought leaders. This year’s event dove deeper into the technology driving digital industrial transformation.

 

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Within the last twelve months we have seen a sudden rush of Merger and Acquisition activities within the field service sector with many major brands including ServiceMax, ClickSoftware and most recently ServicePower all being acquired. So why has the field service sector suddenly become such a hotbed for investment and what does it mean for the innovation in our industry?

Kris Oldland, Editor-in-Chief, Field Service News reports...

I’ve referred to field service as a sector at times as a ghost sector because despite field service impacting almost everyone, and it crossing across almost all verticals outside those who work within our horizontal sector the role of field service management and certainly the tools that those in this field use are relatively unknown.

Yet, it seems that over the last few years someone, somewhere has certainly started paying attention.

Of course, the growing trend within global manufacturing circles towards embracing servitization has put service front and centre whilst various projected estimates of the value of the Global FSM market ranging from $5BN to $25BN will of course be flagged up on the radars of money men, and it certainly seems that the field service sector has come under more of a spot light than it has in its recent past.

“This is occurring for several reasons,” explains Michael Blumberg, President of the Blumberg Advisory Group, when I asked him why it seemed Field Service Management providers had recently become hot targets for prospective investment.”

“First, field service businesses tend to be less susceptible to changes in the economy. During an economic down turn, new equipment sales decline but customers still purchase field services to extend the life of their equipment. In an upturn, companies continue to require field services to support investments in new technology.”

 

“Second, field service businesses often generate a recurring revenue stream (e.g., service contracts) which is also something that is very attractive to investors and also field service providers often hold a defensible market position because of their long-term relationship with customers and unique capabilities.”

“When a company acquires a field service provider they also acquire its customer base which provides a captive market for cross-selling and up-selling additional products and services.”

“Finally and most importantly, field service is usually a basic offering and building block in delivering a subscription based, product-service model (think Servitization) to customers.”

With so many key reasons why field service solution providers are an attractive proposition isn’t the recent run of acquisitions somewhat overdue?

Bill Pollock, President of Strategies for GrowthSM, certainly thinks so.

“It should have happened years ago!” He proclaims when I put this question to him.

“However, the acquiring organisations seemed to have other priorities in mind with respect to broadening and strengthening their existing offerings, and tailoring them to a more narrowing-defined market space.”

“For example, CRM vendors tended to focus more on expanding the functionality of their respective CRM platforms, while ERP vendors tended to do the same with theirs. Remember, there were days, way back when – when a Field Service Management (FSM) solution provided only the functionality required to run a services operation – but not a services business (i.e., no accounts payable/billable or accounting functionality; no reverse logistics; no human resources; etc.). In those days past, a services business would also need to acquire ancillary software packages (e.g., anyone remember Peachtree Software?) in order to manage the entire services business.”

 

“It’s a bit different today. As more and more software providers expand their offerings to run the entire business, they now market themselves as offering a “new” type of platform for doing so.”

“In general, it will be those organisations that move into (or buy into) the field services arena – for all the right reasons – that are most likely to be successful. That is, if a field service functionality makes sense as a logical extension of their existing offerings, then they will be more likely to succeed.

However, those that attempt to “ram their way” into what is already a fast growing and vibrant market sector, some without even having a complete FSM offering, will find themselves “busted” in the eyes of their targeted market base.”

Meanwhile, Sara Mueller, Field Service Portfolio Director, Worldwide Business Research believes that the fact that service has increasingly become a key battleground for competing companies is another key reason why the FSM sector as a whole is gaining more and more attention.

“Since many products have become largely commoditised, service is the competitive differentiator for organisations.” She begins.

“Therefore they are willing to invest in making service better. Technology is dramatically shifting the performance of service organisations, allowing them to grow exponentially, provide a more seamless experience that results in higher customer satisfaction, and even generate much higher profitability.”

 

“While technicians are an integral part of field service, technology solutions are necessary to minimise human error, capture the knowledge of and account for the retiring baby boomer generation of head technicians, even to keep technicians safer on the job.”

Mueller’s point however does perhaps reveal a potential double-edged sword.

Innovation in technology and service delivery have become wonderfully entangled within the last decade - which is why many companies have been able to move towards outcome based contracts, and why service is beginning to outgrow the ‘aftermarket’ tag and become a key revenue stream now being discussed much more seriously amongst the C-Suite.

This is of course a fundamental reason why our FSM solution providers have become such attractive investment options. However, could the very innovation that put the sector on the map dry up when independent, entrepreneurial tech companies get swallowed up by larger organisations?

Pollock certainly doesn’t think that we need to worry about the level of technology available to field service organisations failing to meet requirements at any point in the near future however.

“The currently available technology, coupled with newer technology that always seems to be lurking “just around the corner”, is already sufficient to meet (and exceed) all of the FSO’s requirements for managing their field service operations – and then some! It’s already here!” He comments.

“As such, the global services market is not likely to experience a plateau in terms of recognition, adoption and/or deployment of these new technological advances anytime soon. In fact, as the proliferation of technology appears to be eclipsing adoption by the marketplace, there is no plateau in sight. There is still a “mountain of growth” ready to be conquered!”

 

“This accelerating growth is likely to bring more FSM provider suitors to the forefront rather than less. For example, three or four years ago, how many field service managers thought that Microsoft would acquire itself into the fray? Many industry analysts missed the signs that Oracle was about to acquire TOA Technologies. However, with several major players already having acquired, licensed and/or organically entered the field services market, the question arises: Who will be next?

On the demand side, where has Apple been? What about SAP? What about any of the large, global, systems integrators? On the supply side, what, if anything, will ultimately happen with ClickSoftware? What about the “tried and true” historical vendors, like Astea? And what about all of those Venture Capital and investment firms that seem to be gobbling up one FSM vendor after another?”

Indeed, Mueller’s view also supports the assertion that the current technology is certainly sufficient to meet the growing needs of service delivery.

“The field service management technology today can accomplish remarkable results and drive business transformation. But service organisations are at widely varying degrees of adoption and sophistication, and are looking for more diversity in solution offerings in order to find the right choice for their priorities and budgets.”

However, she also sees the innovation at the heart of our industry as a key driver for continued technological innovation as well adding, “Just as customer needs keep evolving, FSM solutions will need to do so as well.”

And this latter point is also echoed by Blumberg.

“Sure, it is possible that innovation may become less of a priority as FSM vendors become part of larger software companies. However, there will always be lean, nimble, start-up companies focused on FSM that drive innovation and fill any void created by M & A.” He asserts.

 

“I’ve been a consultant to the Field Service Industry for over 25 year and have experienced several M & A cycles, and this is exactly what has happened. It is also very unlikely that innovation will plateau even within larger software companies who have acquired FSM solutions. To quote management guru Peter Drucker, business has only two functions… innovation and marketing.

This a basic tenant of business. Without innovation, companies lose their relevancy and competitive edge.”

So whilst the consensus is that the current M&A cycle won’t lead to any halt in the ongoing development of technology to support field service, one message does seem to be coming out of each of the field service providers acquired and that is reference to the future of FSM solutions being part of wider platforms.

But how far will the FSM platform go? Will we ultimately see FSM become as integral to business systems as ERP and CRM?

Mueller for one believes that this is where the future lies.

“It can be as integral to business as ERP and CRM systems.” She comments

“Given that service is a competitive differentiator for these organisations, FSM platforms are essential to provide the level of service now being expected from customers. The experience a customer receives through field service is often how they will shape their opinion of the product and whether they will buy again. Field service is the front line of the organisation and FSM ensures the experience with field service is ideal.”

Pollock, however, disagrees.

“For the time being, FSM will likely remain subservient, in most cases, to CRM and ERP,” he comments.

 

“The difference between an FSM solution and an FSM platform is that the former is essentially used to run the services operations, while the latter is used to run the entire business. As far as marketing and market positioning go, doesn’t “platform” sound more important than “solution”, anyway?”

“CRM-based solution providers have long touted their products as full “platforms” that may be used to run an entire business; ERP-based solution providers have essentially marketed their offerings in the same manner. By incorporating an FSM solution into their respective offerings, they can now all claim (and, probably, rightfully so) that their offerings represent a complete (or near-complete) platform upon which future services functionalities can be built – whether strictly in support of field service operations, or any other business activity.”

“However, it is not necessarily a “slam-dunk” that FSM will become as integral to business systems as ERP and CRM, as not all businesses have field service offerings – while all have (or should have) an ERP and/or ERP capability.

Further, as remote and predictive diagnostics, powered by the Internet of Things (IoT) and Augmented Reality (AR), make further footholds in the general services arena, running a field service operation may become more important, while become less cumbersome to run (and, as such, more likely to be outsourced, possibly, to a third party).” Pollock concludes.

“FSM software is already an integral part of business systems among those companies that operate Field Service as either a strategic line of business or a profit centre. And there’s the rub, many companies that service products do not have requirements for FSM functionality.” comments Blumberg.

“For example, some provide only depot repair or outsource their service requirements to 3rd parties. Nevertheless, I find it interesting that there are no fully integrated, end to end FSM platforms on the market today that include the complete array of functionality for managing a Field Service Organisations (FSO).”

 

“If an FSO wants to implement such as solution, they often must deploy multiple enterprise systems and point solutions from different vendors. In addition, FSM functionality usually needs to interface with other enterprise system platforms such as CRM, ERP, and most recently IoT to obtain critical data to complete the service transactions,” he adds before summarising.

“On the other hand, I certainly see a need in the market for standalone, functional robust FSM platforms. In fact, I have been advising both private equity groups (PE) and software developers for the last 20 years to make investments that achieve this outcome. Unfortunately, given market dynamics, capital requirements, and technology considerations, it unlikely that PE or software developers will invest the necessary resources to create such a platform.”

“Therefore, it is likely that FSM functionality will continue to remain an add -on purchase to existing enterprise systems.”

 

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Kieran Notter, Director, Global Customer Transformation, ServiceMax from GE Digital, takes a fresh look at some perennial problems...

Field service management hit the headlines in 2016 as automation, the Internet of Things and servitization reshaped the way we service and maintain capital assets.

These trends have now trickled down to the supply chain, providing a fresh approach to age old headaches. In this article, we look at five areas of friction in the supply chain and how combining field service management with assets is solving them.

The Inventory Tug of War

CFOs will always push for lower inventory levels to free up cash flow and reduce the risk of obsolescence. Yet Service Directors want higher inventory to increase First-Time Fix rates, reduce internal costs, improve productivity and raise customer satisfaction.

The supply chain is between a rock and a hard place trying to balance between two opposing arguments. So what’s the solution? In a word, knowledge.

Knowing the assets and installed base – from the basic location knowledge all the way to IoT (smart connected products) – gives the supply chain a much better chance to meet the demands of both sides. It caters for greater availability but with less inventory, thus freeing up cash. By using the data that’s attached to the asset, it’s location, it’s preventative maintenance plan, and its productivity provides an alert when a part is about to break.

 

Expensive, Unplanned Freight Costs

Knowing the frequency of parts that fail, and the correct intervals for preventative maintenance visits reduces freight costs with fewer ‘emergency’ shipments. However, the biggest saving here is actually in reducing the parcel count itself. If you know what parts you are going to need and when, you can consolidate shipments, sending them direct to the technician in advance.

At a basic level, just knowing where your assets are means you can position the inventory in more strategic locations to reduce costs and increase availability.

Product Lifecycle – The Delayed Curve

A supply chain is expected to cover the assets through their lifecycle. However, if you cannot see if the install base is growing or shrinking, you can’t align inventory accordingly.

That means it’s on a delayed curve which will either result in back orders for new product ranges as the planning tries to catch up or obsolete stock for products as they come to the end of their lifecycle, and usage slows down as planning has not reacted quickly enough.

Addressing this issue also means you get insight into the true profitability of a contract or product.

Likewise, knowing the top 20 required shipments rather than just focusing on the 200 makes a huge difference to how a supply chain can react and prioritise their efforts and resources. This also gives a much more focused supply to the field service organisation and the customers with the most need.

Back Orders After The Fault Is Fixed

When parts are ordered direct to the fault on the machine, a small change in process and practice can pay huge dividend – cancel back orders once the fault has been fixed. This may not work for all businesses but it will work for many.

In most cases, back orders are left for the supply chain to fulfil, even though the technician has fixed the issue with a borrowed unit from a colleague or fixing the part rather than the assembly ordered. If the original back order is left, the other technician who lent the part is now second in line to get it returned, which has a knock-on effect with a ‘not required’ demand outweighing a potential ‘urgent’ order.

Also, if the original back order is shipped to the customer and the customer’s machine is up and running, then parts are often lost. One company who introduced this practice (less customer fit parts) reduced their back orders by 52%.

IoT (Internet of Things) – The Holy Grail of Condition-Based Service

Many companies are now firmly into the IoT realm and benefitting from the data that is being provided.

From smart sensors telling them what parts need replacement before an issue arises to optimum intervals between preventative maintenance.

Using this voice of the product alongside customer demand means you can plan your inventory to not only be available before a fault arises, but also plan the consumables and after sales items to a level that has not been seen before.

This moves you into the servitization market with confidence and a predictable profit margin.

Both the supply chain and field service benefit hugely from analytical information, real time data feeds, and expected, predictable outcomes supplied by IoT and its communications. You only need to look at industry verticals benefitting from this already, such as jet engines, fleet management, HVAC and medical devices to name a few.

 

Without asset knowledge, you are essentially working as a ‘demand’ chain and within the limitations of technicians’ ad hoc tasks to manage any intelligent levels of inventory at your locations.

You will always be behind the curve.

Some companies with high volume and low SKU’s can manage with this model, but all businesses will benefit from more real time data and the ability to not just pre-empt future requirements, but act on them.

 

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