ARCHIVE FOR THE ‘white-paper’ CATEGORY

"The old maxim that you can’t boil the ocean
is especially true for mission-critical software implementation..."

Suppose we consider customer success more in line with a servitization model than simply increasing CSAT metrics. In that case, we may start to see a more straightforward path towards developing the model. However, this

also leads us to conclude that such a shift in focus for a service organization will require significant changes within processes and potentially a change in management structure.

The established servitization models are centred around establishing long- standing partnerships between the service provider and the customer. Indeed, as we look at many of the high-profile examples of servitization, often in the early adoption of such service strategies, not only is customer selection crucial, very often, the evolution of the service model is one of genuine co-creation.

One acknowledged approach in developing such forward looking service design is establishing a tiger team – a group of specialists dedicated to the project full- time. In the co-creation model, such a team can comprise both organizations bringing in their specialist expertise, knowledge and insight. Additionally,

both organizations also develop the new approach parallel to existing service agreements, which is especially important when considering the mission-critical status that field service operations hold.

However, once the proof of concept is established, should the service provider wish to roll out a more comprehensive servitized offering, a clear management structure to facilitate the effective rollout is required.

We would expect to see an executive-level leader at the top of this structure – ideally reporting directly to the CEO.

Such a position may come in several guises. One option is the role of a chief revenue officer (CRO), which we are beginning to see emerge as a blend of the two roles of Chief Service Officer and Chief Sales Officer.

Another alternative could be Vice President of Customer Success. For ease of reference, we shall use the term CRO in this paper. Regardless of the name, the function of the role remains the same.

This is a position that requires an intimate understanding of where the value proposition of the service provider lies within the eyes of the customer (to drive successful approaches to revenue generation), while simultaneously having detailed knowledge of how the service operations can effectively meet the service delivery requirements while retaining efficiency both in terms of internal costs but also meeting the customer goals.

In addition to both of these skillsets, the potential CRO must also have the broader business acumen and insight to see how such a move will impact and draw upon other aspects of the organization as well – from R&D through to marketing.

Beneath the CRO, a hypothetical management structure could be mapped out into three key areas as per the graphic below.

On the left-hand side, we have a customer success team led by a director of customer success.

This would be a business division that evolves from the traditional sales team – with a heavier emphasis from account management on customer success and account development – i.e. building those long-standing, more deeply embedded relationships discussed earlier.

On the right-hand side, this structure is where our service operations business unit sits under the leadership of an operations director.

On this side of the operation, the shift in focus is perhaps less pronounced than the sales operation. In one sense, little changes in seeking the maximum efficiency and operational metrics such as technician utilization, mean-time-to- repair and first-time-fix rates remain as crucial as ever.

Ultimately, even in a fully servitized business model, the SLAs to be adhered to remain the same; however, they move from being an external agreement with the customer to being an internal requirement designed to allow the service operation to meet the guarantees of uptime that are now the bedrock of service contract.

However, we see a potential new business unit emerge in the centre of this new management structure – one dedicated to onboarding. In this case, it is also important to note that onboarding isn’t limited to new customers.

" While a similar structure could be adopted for various types of servitized offering, be it outcome-based service or a customer success focused model, the evolutionary leap from a csat focus will very likely involve both executive- level support and some restructuring of management structure..."

Most service organizations adopting such an approach will be taking their existing customers from a service model that they have been comfortable with for a long time to a far more holistic and encompassing model of service delivery.

As a starting point, let us first take a moment to better understand what an API (Application Programming Interface) actually is. Indeed, API is an acronym often thrown into a conversation but perhaps not so well understood for those of us who are not software experts.

To outline how an API works, let us take a more straightforward example.

Imagine you’re a diner in a restaurant with a menu of choices to select from. The kitchen is the part of the ‘system’ that will prepare your meal. However, you cannot just go to the kitchen and place your order directly; this would slow the Chef down and delay service for you and everyone else in the restaurant.

The critical link required for you to communicate your order to the Chef and deliver your food to your table is a waiter.

At a very rudimentary level, the waiter is an API. They are the messenger that takes your request and informs the Chef of what is needed. Then when the Chef completes the task, the waiter returns to deliver the response (in this case, your meal) back to you.

So far, so good.

However, now let’s expand the analogy to fit better the many moving parts of a mission-critical activity, such as field service. In a best-of-breed technology stack, we are no longer dealing with one waiter; we are dealing with a waiter for each aspect of the meal. One Waiter to take our order for our appertisers, another for our entrée. We have a Concierge to ensure we are sat at an adequate table, a Sommelier to take our wine order, a Dessert Waiter and so forth.

Then each of these additional waiters will be linking back to a different part of the restaurant.

The Commis Chef will be responsible for delivering one part of the meal, the Sous Chef another, Chef de Partie another. The Bartender is responsible for providing drinks expertly recommended by the Sommelier, and working in an entirely different part of the building.

Anyone who has been to a high-end restaurant will know that such complexity can be managed and delivered effectively to drive a standard of service that is exceptional.

However, anyone who has worked in such a restaurant will tell you that it takes a phenomenal amount of work to keep the lines of communication and the flow of productivity moving across the shift. Indeed, this is why good restaurant managers that can keep all of these connections, these ‘human APIs’, working in unison, are worth their weight in gold.

"With a platform approach, the links between modules are within the architecture of the solution itself, updates would have been fully tested system- wide prior to deployment. Should an issue occur, you have one point of contact to seek swift resolution..."

There is now little doubt that Customer Satisfaction (CSAT) metrics are viewed as a critical part of measuring effective field service operation.

This is a trend that has been becoming increasingly obvious for several years. In a 2020 Field Service News Research report, “Understanding the metrics that matter in a rapidly changing field service sector”, it was revealed that 51% of field service companies now saw an equal weighting in importance between operationally focused KPIs and CSAT-focused KPIs.

Furthermore, 13% of field service companies stated that they felt CSAT focused KPIs were of greater importance for measuring their business success.

In a more recently published Field Service News Research study, “Customer- Centricity, Technology and the New Normal of the Field Service Sector” from 2021, we saw that CSAT metrics were a crucial indicator of revenue growth metrics amongst field service organizations.

This was anticipated for growing revenue with existing clients, but interestingly, strong CSAT metrics were viewed as an essential indicator for winning new business also.

In fact, of the 293 respondents within the study, 88% stated that strong CSAT metrics were at the least a ‘very strong’ element in winning new business. 32% of the total respondents even said they were an ‘extremely important’ element.

Given the above, it is a reasonable assessment to make that the importance of strong customer satisfaction has firmly taken root within the field service sector.

Yet, increasingly those discussions centred on delivering excellent customer service are morphing into discussions centred on ensuring customer success.

The question many service leaders are asking is are the two synonymous? Is customer success a natural evolution from customer satisfaction or are the two areas related but distinctly separate (like servitization and outcome-based solutions, for example)

Perhaps to help us better understand the question, we should outline some definitions of customer success.

The biggest challenge for many service organisations, from the small to large, is often the delay in large cash-to-service cycles, currently, as we look forwards to a continuing uncertain economic outlook, cash-flow promises to be an ongoing challenge for all organisations.

This is another vital area where the platform can shine for service organisations.

Modern platforms should incorporate accounting modules that ensure accurate, real-time, cohesive financial management for your business. Such modules should be easy to use and provide high functionality and flexibility.