Jan van Veen explains how to accelerate your service innovation in disruption times and to ultimately thrive, leveraging servitization and outcome-based services.

 

We hear a lot about servitization, outcome-based services and product-as-a-service business models. However, we see little examples in the industrial sectors. I often hear about serious challenges manufacturers face developing and launching new service offerings:

• Clients do not see the value, have many objections and are not ready for it
• Lack of strategic support to invest in necessary capabilities and to develop their business model

3 of the root causes are;

• The gap between academic terms like servitization, outcome-based services and product-as-a-service and the practice is not being closed yet
• Poor definition of the critical business problems of clients which will be solved with the new offering
• The impact for the manufacturer’s business is not clear yet

In this article I share some of the best practices for designing advanced offerings which will help you to overcome these challenges.

Servitization, digital solutions and Advanced Services

Just as an increasing number of manufacturing companies, you may be looking for ways to thrive during disruptive change in your industry. This is an exciting journey of enhancing your business models with digital solutions and advanced services.

Some of the major trends which make this mission critical for your future success are;

• Digital technologies
• Digitalisation of clients’ operation
• New emerging business models
• Shifts in the value chain / ecosystem

The vision behind these innovations is;

• Developing advanced services and solutions to develop new and recurring revenue streams and increase long-term differentiation
• Develop better performing and more efficient predictive maintenance services
• Meet a broader scope of (latent) customer needs, beyond availability and condition of equipment like operational performance solutions.
  
  

Here is the problem

Most service leaders and innovators, solution providers, academics and consultants use broad and abstract concepts to describe their vision, strategy, innovations and new offerings with container words like;

• Servitization
• Advanced services
• Outcome-based services
• Remote services

I often hear from service leaders and innovation teams that;

• Clients do not see the value of the new offering or solution
• Clients see many obstacles and risks
• Clients are not willing to pay more for the new solutions
• Clients are not ready for the new solutions
• They lack the support of strategic stakeholders and other functions in their organisation

In essence, all boils down to the following 3 problems;

• The new solutions and services do not solve (new) critical business problem of the clients. The value or impact is not clear (other than potentially lower prices for the maintenance services)
• It is not clear how these services contribute to the overall business challenges and vision of the company as a whole
• The service vision is too abstract for internal stakeholders to understand and endorse. Words like servitization, outcome-based services, remote services and product-as-a-service are too theoretical and do not clearly articulate a vision and strategy.

This is pretty frustrating isn't it?

The solution

In this article I share a couple of frameworks which many service teams miss in their service innovation strategies. These are;

• Build deeper customer insights
• Segment clients based on their needs
• Approach your business models more holistic

This is by no means exhaustive; many aspects come into play to get it right.

Build deeper customer insights

To be truly outside-in and customer driven, you need to have a deep insight in the challenges and problems your clients are facing in their business. Deep customer insights should;

• Go beyond their requirements about uptime and maintenance of their assets
• Cover a time window of 3-7 years
• Be thought provoking eye-openers for your clients

You can read more about this in my contribution “Build a Strong Customer Story in 7 Steps and Launch Irresistible Advanced Services” in the Handy Little Book, published by Field Service News (add link)

Segment clients based on their needs

One size does not fit all. Different clients have different visions and strategies, different challenges and therefore different needs. When defining the (latent) customer needs for today and the near future, it is crucial to have some sort of segmentation of your important clients based on their (future) needs.

This segmentation will help you to develop a robust strategy which defines which customer segments you will target, with which new service offerings and which business models you will develop.

There are many ways to segment clients based on their needs, largely depending on the specific industry. I will share two generic patterns for customer segmentation which can be useful for you to take as a starting point. They are based on segmentations of innovative and successful manufacturers and service leaders.

The two patterns are:

• Maturity – Willingness to outsource of a business
• Maturity – Complexity of a business

 

This could be a useful pattern in industries where many of your (potential) clients tend to do most functions themselves instead of outsourcing the activities (like maintenance of equipment).

Along the vertical axis you can separate segments based on the maturity of their core capabilities and processes. For example, in the industry of metalworkers this could be;

1. Traditional craftsmen
   The entrepreneurs personally (together with their employees) manufacture the metal products themselves, love part of the manual work and working with their machines and tools. This is their pride. Little of the activities are put into structured processes.
2. High tech workshops
   The entrepreneurs have invested in state-of-the-art tools to improve quality, consistency and efficiency. Their main focus is still on the technical side of the profession. Probably there is more structure in the workflow and processes, predominantly organised from a technical point of view. From a more economical point of view, the structure is by far not efficient yet.
3. Lean manufacturers
   The entrepreneurs have a more economic view (or hired an operations director with economic competencies) and are working on efficient processes, workflow and organisation. They follow lean-six-sigma or similar approaches to optimise human resources, capital investment and materials.
4. Value chain optimisers
   These entrepreneurs have a broader scope and are looking to their added value in the entire value chain, partnerships, vertical integration or specialisation. They may also develop more advanced value propositions to their clients like inventory management and delivery of the components they manufacture in small packages in the production line of their clients.

This is a very brief description. You should probably also look into functions like sales, marketing, engineering, internal logistics, inventory management, tools management, financial management, human resources management etcetera. You get the picture.

Along the horizontal axis you can segment your market into clients that tend to do as much as possible themselves versus clients that outsource many functions which are not part of their core-process. Clients in the first category probably have various dedicated departments, competence centres or teams for functions like process optimization and maintenance

Along the horizontal axis you segment your market into clients that have short and simple value chains versus clients with longer and more complex value chains. For example, again in the industry of metalworkers this could be;

1. Jobbers or workshops that fulfil specific tasks like welding, cutting, bending, drilling etcetera and that manufacture intermediate components or semi-finished products
2. Component manufacturers which perform several tasks to manufacture components, like engine blocks for the automotive industry
3. Product manufactures, which manufacture complex products
4. Machine manufacturers

Whatever pattern you use, with these segmentations, you now have 4 (or more) segments in a logical structure. For each segment you can

• Find a descriptive name
• Further describe their specific needs
• Define their characteristic to recognise them

For each segment you should;

• Decide whether you want to serve them or not. Or at least define which segments have your focus
• Develop a customer insight or customer story
• Develop specific messages to use in your marketing, sales and service delivery
• Develop and map specific services, offerings and delivery models
• Develop a specific commercial approach

When you are still in early stages of developing advanced new service offerings, it often pays to focus on one specific segment first.

Approach your Business Models with more holistically 

As soon as your advanced services go beyond the maintenance and the condition of the equipment your company manufactures and sells, you will be reconfiguring or extending the business model of your company as a whole, that is, the value proposition of your business model. This means, you need to have a strategic dialogue and innovation process with strategic stakeholders.

To make this a fruitful and coherent process, you should avoid a discussion about product versus services. It starts with;

• A shared concern about developments in the industry
• The threats and opportunities for your business as a whole
• A vision about the future state of your entire business and what needs to change to achieve this.

This will result in a few strategic priorities, one of which (hopefully) is services innovation.

Here I would like two share two useful frameworks that help to take the development of the business models to a more holistic - company wide - level. Note that these frameworks are not limited to services or products alone. They address the overall value proposition, which can be a combination of products, software, data and services. 

In the matrix above, you can describe changes of your business model along two aspects.

Along the vertical axis, you differentiate value propositions;

• From stand-alone offerings (like single products or services)
• To comprehensive and integrative solutions which cover a broad scope of needs and solutions

Along the horizontal axis, you differentiate highly standardised offerings from highly customised offerings.

This results in 4 types of business models, which I will further describe with document printers as an example;

•   Product Business Model
  • Only printers, probably including service contracts
  • A wide portfolio of different models to choose from
  • Additional equipment for folding documents, putting them in envelops etcetera
  • Getting the printer for free and paying for the ink only
  • Predictive and remote maintenance
  • Cloud storage solutions and Microsoft Office 365 still fit in this model, even though you pay a small fee per month
  • Also retail banking fits in this business model
• Project Business Model
  • An assessment of the entire business, to define how much printers, which type and where
  • Connecting the printers to the network, configuring security systems
  • Designing, building, commissioning an entire print room for high volume printing and mailing of documents
  • Designing more effective and efficient processes
• Solution Business Model
  • Taking over the entire print room from clients, which could still be at your clients’ locations
  • Connecting the Salary Administration system to the print room, to print all salary slips at the end of the month, put them in envelops, and send them to the postal services
• Platform Business Model, in the printer industry the example may become a bit theoretical, anyway
  • An online platform where clients can upload templates, designs and lists of destinations and pay for the job. The platform will split this in smaller jobs for various connected and certified print facilities across the world and process the financial transaction. (I am not sure if this kind of service ever existed)
  • In the Additive Manufacturing sector, we do see initiatives in this direction to allow manufactures to print metal spare parts anywhere in the world close to the customer
  • Other examples of today are Apples Appstore, iTunes, Spotify, Amazon, Uber and Airbnb 

The framework above will help you to better articulate the kind of value and related business models you are aiming for.

With this framework you can define your value proposition along the horizonal axis based on the scope of the services. There are several ways to add value to your clients (deliver outcome if you like). I will use the commercial truck industry as an example;

• Better products
  For example. improve fuel efficiency of the truck and engines
• Better availability
  Your services can maintain and improve the availability and condition of the equipment when your clients need them. This could be quite advanced with real time data, smart diagnostics predictive analytics or supported self-help offerings using AR.
  For example, predictive maintenance to improve availability (and maybe also improve fuel consumption)
• Better application or use
  Your service can drive the output or performance of the equipment you delivered to clients by improving the use, configurations, settings and ongoing optimization tactics. Also, these services can be onetime projects or ongoing support.
  For example: Reduce fuel consumption by improving the driving behaviour of truck drivers
• Better processes
  Your services can also concentrate on the overall processes and operation.
  For example: Reduce fuel consumption (and other cost) by improving the route planning, combining jobs, choosing the right vehicles for each job etcetera

Along the vertical axis you can separate offerings which are;

• Effort based, where you promise to do certain activities for which your client pays, regardless of the result of the activities. It remains the responsibility and risk of your clients to manage the overall performance and take the right decisions.
• Performance based, where you promise your clients a certain result and get a fee depending on this result. In the example of commercial trucks, this could be;
  • Guaranteed uptime and availability of the truck of 99% and penalties if the performance is below 99%
  • A fee per percent-point of reduction of fuel consumption
  • A fee per transportation job

How to use these frameworks

Map your current business model(s) in one or more of these matrixes. Also map a few scenarios for the envisioned business model(s).

This will help you and your stakeholders to have a more structured and neutral discussion about the major trends in the market, technology and competitive landscape as well as in what direction your value propositions and business models should develop. Any choice will have an impact on engineering, manufacturing, software development, marketing & sales and services.

What are the takes

If manufactures cannot successfully adjust their business model, they run a serious risk of falling behind existing and new competitors.

Clients are developing digital capabilities in all their functions. They will have other needs for services and solutions.

This is an important opportunity for manufacturers to grow their relevance for their clients and grow their business.

It is also a unique opportunity for digital native service providers and system integrators, which offer remarkable and complete solutions to the (new) problems of your clients. They are your new competitors.

Benefit

If you use these frameworks and embed them in your service vision, your innovation strategy as well as in your dialogue with strategic stakeholders, you can develop the;

• Shared concern for the business as a whole
• The strategic priorities for the business as a whole, one of which will be services
• Shared vision for the business as a whole, which includes services
• A specific shared concern for the services business unity
• The strategic priorities for the services business unit
• A shared vision for the services business unit

Rome was not built in one day

It is an iterative journey. It takes time and work. The frameworks above will help you to facilitate and structure this journey.

Manufacturers and service leaders with successful advanced services have used these kinds of frameworks for a long time and still are. This allowed them to achieve quick, continuous and more radical innovations and thrive in disruptive times.

Conclusion

For quite a few service leaders, the journey of service innovation is a tough one. Their clients do not see the value of new advanced offerings, they do not want to pay for them, and internal stakeholders do not provide the necessary support.

Some of the key reasons are;

• The critical business issues of the clients are not clear and are not addressed with the new offerings
• The business value of the new offerings and business models are not clear
• The envisioned business model(s) are not clearly described

Litmus proof

I would like to challenge you with the following questions.

Can you describe your services vision and strategy in concrete words? Without using words like;

• Advanced services
• Servitization
• Product-as-a-Service
• Remote services
• AR, AI, IoT

Does your services vision start with a description of;

• Major trends in the industry of your clients
• How challenges and priorities of your clients are changing
• How that will change their needs
  
  

Recommendation

If you want to be leading the transition of your business and industry, I would recommend you to;

• Define a clear shared concern with your strategic stakeholders;
  • What are the developments and trends?
  • How are customer needs changing? (our worksheet “Build your Customer Story” will be useful)
  • What is the (potential) impact of these changes for your business?
  • Does your business want to act on this by innovating the business model?
• Together with your strategic stakeholders, consider various options for developing the business model(s) and assess how these business models would help your business to thrive
• Agree on the innovation strategy and next steps
• Iterate!

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Further Reading:

• Read the "Build your Customer Story" worksheet @ https://moremomentum.eu/worksheet-customer-story
• Read Jan van Veen's article, “Build a Strong Customer Story in 7 Steps and Launch Irresistible Advanced Services” @ https://www.fieldservicenews.com/blog/build-a-strong-customer-story-in-seven-steps
• Read more articles by Jan van Veen @ https://www.fieldservicenews.com/hs-search-results?term=jan+van+veen
• Read more about moreMomentum @ https://moremomentum.eu/
• Read more about servitization @ https://www.fieldservicenews.com/hs-search-results?term=servitization

Copperberg’s editor Adrian Cirlig and content writer Radiana Pit discuss the importance of warehousing and your logistical networking and how ecommerce is changing what was once a straight-forward channel. 

Getting the right parts on time has always been critical for field service technicians, and for that purpose, warehouse and logistics design is essential. But many industry players are struggling to meet customer demands in the era of digital commerce. New delivery standards may require significant investments in staffing, facilities, and technology—and such an endeavor is not always an option for most businesses.

The Importance of Service Logistics

The rapid development of e-commerce has taken many organizations by surprise. Now, logistics companies are largely unprepared to adapt their operations to meet expectations in terms of quality, capacity, and speed.  

However, there is a solution to meeting delivery expectations at the lowest cost possible: optimal network and warehouse design. 

Logistics network and warehouse design is mainly concerned with delivering goods to customers and satisfying their needs with limited resources. This is why coming up with an optimal design holds great strategic value. But devising an optimal model is no easy feat, especially since most models stop short at minimizing costs. However, logistics professionals aim at optimizing their networks in a way that maximizes not only profit but also speed and sustainability. In order to achieve such objectives, comprehensive designs must take into account the number, location, role, and size of your facilities, which plant/vendor should produce which product, the raw materials and finished products that flow between facilities, and more. 

 

Location—the key issue in facilitating optimal design 

Determining the right number and size of your warehouses and/or plants is challenging enough, but getting the location wrong can be extremely detrimental. 

However, the secret to getting the location right is to think of it as the only way to close the gap between your company and your customers. The closer the location is to your clients, the faster your goods will be delivered—and that's what today's impatient society expects from you. 

So, start your design process by considering your location objectives and then identify the key factors that can make or break your network. 

 

So, what makes a warehouse great? 

 According to Rudolf Leuschner, Associate Professor at Rutgers Business School, what makes a warehouse great is: 

• Speed or the ability to ship out as much product as possible by ensuring the shortest distance between the product and the shipping dock; 
• Redundancy, which consists of multiple checks built into your distribution system to ensure that the right products are delivered to your customers; 
• Productivity or the ability to push out as much product as possible out of your distribution network. 

With these goals in mind, you can create a seamless warehouse flow process that consists of the following essential steps: 

Unloading → Storing → Picking → Packing → Staging → Loading  

Each step should be accurately timed with the help of a reliable warehouse management system. 

But beyond warehouse management software, you should also think FAST. If you're not already familiar with it, the FAST concept is a layout design solution that will help you to ensure that your locations are close enough to each other to enable seamless workflows. However, placing your activity-locations too closely can clutter your processes and result in highly inefficient outcomes. 

So, when it comes to FAST, you should focus on: 

• Flow to ensure a logical sequence of operations within your warehouse based on the location of each of your activities; 
• Accessibility to be able to receive and issue products in pallets, batches, or truckloads; 
• Space to make optimum use of the cubic capacity within your warehouse; 
• Throughput to reduce inventory risks such as bulk, security, compatibility, and more. 

These best practices for warehouse design will definitely help you come up with a proper layout that enables the rapid and seamless handling of products. But when it comes to network design, what are the most important aspects that ensure perfect order and superior performance? 

In other words, what makes a logistics network great? 

According to Edward Frazelle, President and CEO at RightChain Incorporated, an optimal network design/redesign process should consist of the following 10 steps: 

1. Evaluate your current network 
2. Design and populate your network optimization database;
3. Create network design alternatives, such as more or fewer hierarchies, multi-commodity flows, pooling opportunities, merge-in-transit, direct shipping, cross docking, and supply-flow optimization concepts; 
4. Develop your network optimization model; 
5. Choose the right network optimization tool; 
6. Implement your network model in the chosen tool; 
7. Consider alternative network designs; 
8. “Practicalize” recommended network structures; 
9. Compute reconfiguration costs; 
10. Make go/no-go decisions. 

To make the most out of this process, you should engage all stakeholders so that everyone is on the same page when you decide to jump-start your design initiatives. You should also enlist your stakeholders' help when looking for alternative network solutions, modeling transportation, comparing services and costs, and analyzing risks. 

Combining the efforts of those involved with data insights will help you accurately review model outputs and look at your options from a fresh perspective. 

Creating the perfect logistics network 

It goes without saying, but creating the perfect logistics network takes time and effort. However, you can set yourself up for success by aligning your logistics network with your business model and focusing on answering the following questions in a way that makes the most sense for your company: 

• How will a more responsive network enable growth? 
• Will network investments lower operating costs? 
• If operating costs increase, will the sales volume warrant the investment? 

By taking your time to reach the right conclusions, you will be able to find the ideal strategy to derive the greatest business value from your design initiatives. 

Last but not least, you will also need accurate data to kick-start your initiative. So, before you start designing or redesigning your network, list all of your products, stock points and sources regarding customer locations, set customer service goals, order processing costs and patterns by frequency, size, season, and content, and establish transportation rates and warehousing expenses. 

Are you ready to kick-start the design process? 

Although your old logistics network design might still be reliable, over time, it will become fragmented. This usually happens because territories change and ordering patterns alternate, which causes the network to lose its efficiency. 

So, it's vital for your company to review your network periodically and ensure maximum service in the most cost-efficient manner.

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Further Reading: 

• Read more articles by Adrian Cirlig @ https://www.fieldservicenews.com/adrian+cirlig
• Read more about spare parts and logistics in service @ https://www.fieldservicenews.com/Spare+parts+and+logistics
• Read Edward Frazelle's article on an optimal network re-design/design process @ https://www.mhlnews.com/global-supply chain/article/22039647/how-to-design-a-logistics-network-in-10-steps
• Read Rudolf Leuschner's article on what makes the perfect warehouse @ https://www.coursera.org/lecture/supply-chain-logistics/how-much-inventory-do-we-need-eJIeU
• Read more about FAST from the Logistics Bureau @ https://www.logisticsbureau.com/warehouse-design-key-factors-to-consider/
• Read more about Copperberg and their events @ https://www.copperberg.com/field-service/

Following an appearance on the Field Service Podcast discussing digital transformation Michael Blumberg from Mize outlines some of the reasons why service leaders should be implementing their own digital journey, particularly in these unprecedented times.

 

Digital transformation (DX) is the process of using digital technologies to create new — or modify existing — business processes., culture and customer experiences to meet changing business and market requirements.

Digital Transformation in service

DX has gained increased attention among Field Service Leaders because it results in many benefits, including but not limited to:

Improved process efficiencies:

For example, DX initiatives have led to a reduction in paperwork by Field Service Engineers (FSEs) and an elimination of telephone calls to technical support personnel.

Increased productivity

DX automates manual activities and brings data and information to the hands of FSEs.  As a result, FSEs are more productive. Less time searching for data and completing forms means more time in the field, and more call completed per day.

Real-time data-driven decisions

DX initiatives make it possible for Field Service Organization (FSOs) to forecast demand, predict and anticipate service events accurately.

Stakeholder enablement

Through DX, companies can extend the reach of corporate systems and infrastructure to business partners, dealer channels, and service provider networks so they can optimize service delivery and maximize Customer Lifetime Value (LTV).  Employees can have tools they need to manage their day, improve performance, and generate additional revenue.

New business models

IoT enabled services, and Servitization models could not be possible without DX.

Ultimately, these benefits result in higher-margin revenue, and improved Customer Experience (CX) will, in turn, leads to a larger market share and improve customer retention for FSOs.

 

Stakeholders Driving DX

There are two groups of stakeholders that are driving DX.  The first group is end-user customers. We now live in always-on, always-connected, "let's do business now" economy.   Customers see the impact of DX in other industries and expect the same in Field Service.  Also, customers have no tolerance for uncertainty or surprises.   At issue, Field Service is full of uncertainties and surprises. DX helps mitigate these issues.  For example, DX enables the Uberization of Field Service, making it possible for the customer to obtain real-time notification of when the FSE will arrive at the customer site and the route the FSEs are taking to the site.

The second group of stakeholders is business partners such as the resellers/dealers, service provider networks, and suppliers. These parties operate as independent entities. However,  the Manufacturer relies on them to provide to deliver exceptional service, maintain customer loyalty, and generate high margin revenue.  By implementing DX initiatives that support these stakeholders, the Manufacturer helps itself protect its brand.   For example, providing resellers with online access to parts catalogs, inventory availability, and knowledge resources ensures their technician achieve a high first-time fix rate when they are providing service on the Manufacturer's brand.  

 

Level of DX Adoption in Field Service

DX implementations within the Field Service Industry aligns with overall technology trends we are observing across all industries. According to a recent study by Dell Technologies, 78% of participants say DX should be more widespread within their organization. Despite the vast potential of DX, most companies are just scratching the surface in terms of what they can achieve through DX.  Many businesspeople have concerns about whether their companies can effectively execute DX on time.  They believe there is a limited window of opportunity before their companies may become irrelevant.  Roughly half (51%) of the respondents in the Dell Technologies study indicate their companies will struggle to meet customer demands, and 49% worry their organization won't prove trustworthy in the next five years if they don't fully implement DX initiatives.

 

Underserved Segments

Quite often, when we hear about DX projects, the focus is often on use cases associated with concepts like Uberization of Service, Predictive, and Proactive Service enabled by IoT. These projects are significant and represent the future. However, they require a substantial investment in time and capital. Not every company is ready or able to pursue these types of strategies, and as evidenced by the market research, we shared in this article.   On the other hand, there are a couple of low hanging opportunities that companies can pursue that can be implemented relatively quickly and provide a "good bang for the buck," For example:

Online portals for customers, channel partners, and suppliers to initiate or respond to requests (e.g., work orders, support tickets, RMAs), observe the status of activities and track financial and operational KPIs 

 

• Electronic Forms to automate and streamline data capture
• Electronic Parts Catalogs to look-up, find, and order parts
• Unified Knowledge Platforms that make it easier for technicians and channel parts to find knowledge artifacts that may  found in disparate applications and databases

FSOs should not take these types of solutions for granted as they can result in significant ROI, a better service experience, and higher customer retention.

 

Why is now the right time?

At the time of writing this article, COVID-19 has forced companies to implement contingency plans to keep their customers and employees safe and ensure their products and services get delivered on time.  Companies who have implemented DX are likely to be nimbler in adapting to new realities created by the virus.   Remote Support, Proactive Service, Same Day/Next Day delivery…all made possible through DX, have now become the standard model of service during these times of social distancing and self-quarantine.   

There are, of course, many other reasons why FSOs might want to accelerate their DX initiatives.  First and foremost is the technology is readily available and doesn't require a large capital outlay because it is available on a subscription basis.  Second, the economics are favorable.  DX initiatives have proven to have a high ROI and rapid payback.  Third, DX initiatives have a positive impact on customer retention and loyalty.   Fourth, competitive forces and consumer preferences will dictate it.  Fifth, it is a good hedge against economic uncertainty. 

DX is a journey that all service professionals should be contemplating if they haven't already.

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Further Reading:

• Listen to the Field Service Podcast with Michael Blumberg on digital transformation @ hwww.fieldservicenews.com/blog/digital-transformation
• Read more articles by Michael Blumnerg @ www.fieldservicenews.com/michaelblumberg
• Read more articles on digital transformation in service @ www.fieldservicenews.com/digital+transformation
• Read more articles on the Uberization of service @ www.fieldservicenews.com/uberization
• Read more about Mize @ https://m-ize.com/

We are all living in completely unknown times. The past couple of months has seen so many changes to the way that we work, rest and play; none of which we would have realised would have such profound effects on us all. For people in services, it has been extreme beyond all measure explains Martin Summerhayes...

 

Speaking to customers and partners, it is clear that many do not know why they are feeling the way they are. Some are feeling angry. Many are feeling frightened.  A few are in denial about the current situation. A small minority are feeling that this is only a short term situation and everything will return to “normal”, whatever, they may describe as normal.

 

Managing the mobile workforce during covid-19

It reminded me of the “Change Curve of Loss” that I was taught a number of years ago and have used on many change programmes. So, what is this curve? The theory is based on a model originally developed in the 1960s by a psychiatrist, Elisabeth Kubler-Ross, to explain the grieving process. Since then it has been widely developed as a method of helping people understand their reactions to significant change or upheaval.

It is such an extraordinary time; that I took some time to refresh myself on what the model describes. The model, in its simplest form, has four stages associated with it. These stages are:-

• Stage 1 – Immobilisation and Denial
• Stage 2 – Anger and Bargaining
• Stage 3 – Depression and Testing
• Stage 4 - Acceptance

Note: Since writing this article, the HBR – Harvard Business school, has published an article on the same subject, details of which can be found at the end of this article.

So, what do these stages describe? Before we jump in. let me ask you to spend a moment, just a moment, to write down on a piece of paper, the word or phrase of where you are feeling in the current situation. It will help guide you through the detail, for you to know where you are in the “change curve”. Please be aware, there is no right or wrong answers to any of this and this is only a guide. Let, me explain the stages and the details behind them:-

Prior to Stage 1 - Stability

Prior to the onset of Covid-19, we were working, living and experiencing relative stability in our lives, our work and our social surroundings. Yes, there were challenges, but for many; we were living in relative stability. Then came the announcements of virus infections; illnesses; deaths; closure of services; restrictions on movement; social distancing and finally; lockdown in your own home. Within a relatively short timescale, a bow wave of significant changes and upheavals hit us all, all effecting us in different ways. How these have affected us, then follows the four stages….

 

Stage 1 – Immobilisation and Denial

This is the “rabbit in the head lights moment” where we go “OMG” what on earth is happening. This stage occurred just prior to and at the point of the lockdown, here in the UK.

• Immobilisation: We suddenly feel immobilised. Full of fear. Confusion sets in. We feel overwhelmed with the news and the social media “storm” that ensued.
• Denial: Next comes denial. We saw that as soon as the government announced restrictions, with some people ignoring them and continuing to meet up and get together. “Its’ not going to happen to me Gov”, was the argument.

 

Stage 2 – Anger and Bargaining

This is where another aspect of our view of the world kicks in. We kick back, feeling anger at the situation. Our “fight or flight” base feelings kick in at this stage.

• Anger: Anger at the loss of freedom. Anger at the loss of liberties, the freedoms we all had. “Why me” is often cited at this point. Often, the anger can be expressed in physical means, striking out, or trying to discharge the emotional turmoil.
• Bargaining: Strangely enough, next comes bargaining. This is where you try to minimise the impact. “If only I do this or that, then the situation will not affect me.”

 

Stage 3 – Depression and Testing

This is the lowest ebb in the change curve. Being aware you are in this stage, is a good starting point to trying to understand, cope and deal with it. None of us are professionals in mental health, so if you feel that you are not coping well, please reach our to friends, colleagues, loved ones, family, or contact the NHS for support.

• Depression: If the change curve of loss is followed in sequence, then this is the next phase. This is where the sense of loss and frustration turn inwards. “Why me” is often spoken of. If you considered before this situation, 1 in 5, yes, 1 in 5 adults in the UK had experienced some form of stress and potential depressive episode, during their working life; you can only imagine the numbers that may enter this stage over the next few weeks.
• Testing: This is where you start to lift out from the depressive phase. It is where you start to test the “new norm”. Where you begin to try new alternatives. Perhaps it is walking. Perhaps it is exercise. Perhaps it is Skyping a friend or relative.

 

Stage 4 - Acceptance

This is where you feel that normality is returning. It is not going to be the same normal as what there was before; but we have a fantastic ability to adapt.

• Acceptance: This final stage is where you respond to the change realistically.
  
  

That acceptance of the new norm is, in fact “normal”.

It is important to recognise that we are all going through this “Change Curve of Loss” over the coming weeks.

Our customers. Our partners. Our field engineers. 

How quickly we go though this change curve and to the depth of curve cycle, is going to be personal for each one of us. How people recognise and understand that it is perfectly natural to feel this way; how well individuals respond to the changes as they occur and how quickly they move into the acceptance phase, is all personal. I would encourage us all to take the time to be thoughtful of others. To take a moment of kindness and reflection in this uncertain time. We will come out of this period of uncertainty. We are, after all, human.

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Further Reading:

• Read more articles by Martin Summerhayes @ www.fieldservicenews.com/martin+summerhayes
• Read more articles on health, safety and wellbeing in service @ www.fieldservicenews.com/healthsafety
• Read more articles on managing the mobile workforce @ www.fieldservicenews.com/managing-the-mobile-workforce
• The HBR article referenced in the article can be found @ hbr.org/2020/03/that-discomfort-youre-feeling-is-grief
• Read NHS Support on mental health @ www.nhs.uk/using-the-nhs/nhs-services/mental-health-services/ 

Covid-19 has changed the world, Service leaders have to look beyond "business as usual" and find new ways to operate. Developing new solutions, delivered via strong leadership, is key to continuity. Bill Pollock explains...  

While many would argue that a serious marketing and business development action plan is required at all times, this is especially true during turbulent times. During historical boom economic growth periods, post-war recoveries and peacetime economic expansions, it seemed that virtually any half-hearted marketing or business development activities led to continuing business growth.

However, when the going gets rough, there are two key factors that all services organisations must keep in mind:

1. Life – and business – still go on, but
2. Customers have neither the time nor the inclination to mess around.

Field Service Strategy During and Post-Pandemic

The compound events of the sudden and unexpected spread of the Coronavirus, and the subsequent crash of the global economic markets have temporarily brought the world, and its businesses, to a stunned and sudden standstill. There is no longer “business (or life) as usual”. Many citizens are now “sheltered at home”, either voluntarily, or mandated by their respective governments. There is also an increasing realisation that life as we knew it would no longer be the same. As a result, neither would field services – nor services of any kind!

Already, there are many facets of the traditional services delivery model that have changed forever. However, workers will continue to use their computers, tablets and smartphones to get their day-to-day jobs done. The mobile workforce will become increasingly mobile – as will the pre-Coronavirus office workforce. As such, networks and carriers will become even more important components of the customer and field technician communications processes than ever before.

Payments will still need to be made, although there are likely to be less ATM transactions, as they will likely be replaced by an increase in online payments via the Internet, Apple Pay, PayPal, Venmo and the like. Chipped credit and debit cards were supposed to slowly replace the older magnetic strip cards; however, this transformation has been accelerated by the Coronavirus pandemic, where more and more payments will now be made via “tap” or “wave”, instead of swipe, insert or hand-to-hand transfers of cards or cash with human clerks.

Patients will still go for MRIs, CT-scans and surgical procedures – but, at least temporarily, not so much for elective surgeries or non-life-threatening medical situations. Milk will still be processed. Pharmaceuticals will be manufactured. Textiles will be sewn. And services organisations will still be called upon to support their customers, dealers and end users with a full array of new and steadily evolving services.

When you think about it, everything that we do in the services industry still needs to get done – especially in these turbulent times. In many ways, we are all doing the same things as we did pre-Coronavirus – although now, there is an extra measure of importance in everything we do, every step we take, and every customer we support. It’s just going to be different! And remain different!

 

"This may also be a good time to strengthen your own organisation’s relationships amongst its strategic partners..."

 

As recently as just a few months ago, undoubtedly, we were all dealing with customers (or vendors) who, for whatever reasons, simply strove to meet “acceptable” levels of service delivery performance and customer satisfaction. Some had internal goals, objectives or mandates that needed to be met; while others simply wanted to improve existing levels of customer satisfaction to “keep up with the Joneses”. Now, everything is different. The stakes are suddenly higher.

Every business, everywhere in the civilized world, now requires the highest levels of B2B (and, increasingly, B2C) support from its cadre of vendors and partners – no matter whether the support required is on-site break/fix, helpdesk or preventive maintenance; or systems integration, consulting or professional services. However, increasingly, there has been (and is now virtually mandated) a rapidly-moving transformation away from the traditional on-site, “hands-on” approach (whether supported by Augmented Reality or not) to a “hands off” approach where service and support is, instead, provided via Predictive Diagnostics, Remote Diagnostics/Maintenance, and now – Remote Expertise.

 

3D Printing within the Field Service Supply Chain?

Further, “last year’s technologies”, such as 3D Printing, have been propelled directly into the forefront of Parts & Inventory Management as global businesses have relied heavily on the ad hoc ability to manufacture parts – on-site, and immediately – to support local medical and related emergencies. Most analysts agree that 3D Printing will fast become a mainstay of parts and inventory management as quality continues to improve and costs come down further.

In today’s tense environment when an unforeseen development can bring air travel and mail service to a sudden halt, thereby stopping parts shipments or freezing deliveries; send unexpectedly high numbers of people to medical centers for tests, evaluation and possible hospitalisation; or disrupt field service operations as otherwise would-be mobile workers sit “sheltered at home” until they are permitted, once again, to make service calls on-site, there is a renewed need for services “above and beyond the call of duty” to support what used to be “business as usual”.

But how can this be done?

Quite simply, it will involve ramping up the types of services and support products that have been historically marketed to a higher level of contingency-based support as well. This may also be a good time to strengthen your own organisation’s relationships amongst its strategic partners. For example, whatever your company’s portfolio of service and support products may have been historically, now would be a propitious time to refocus it around professional services including contingency planning, business continuity and disaster recovery, etc. And, if you already provide these types of services yourself, now is the time to promote them more heavily to the marketplace. However, if you don’t – now may be the right time to find yourself a strategic partner in those fields with which to “piggyback”, or joint market, your services.

 

"Whatever happens from this point on, the world has changed..."

 

Customers, who only a few months ago, were primarily concerned with hardware, software and helpdesk support, are now also talking about contingency planning, business continuity and disaster recovery. Terms like “high availability” and “hot sites” have been around, it seems, almost forever. However, with the advent and proliferation of the Coronavirus pandemic, they are now “top of mind” for many businesses, and no longer on the “back burner”. Are these the types of professional services that are also “top of mind” to the marketplace when they think of your organisation? If not, what can you do to make it so?

 

The Critical Rise of Augmented Reality

Field service solution providers that did not offer an Augmented Reality (AR) or Merged Reality (MR) component to their respective portfolio of offerings yesterday, were still credible alternatives for supporting your organisation’s field operations – but, not any longer! If your services organisation is looking for a credible FSM solution today, you should only be considering those powered by the Internet of Things (IoT), and built on a foundation of AR/MR, Artificial Intelligence (AI) and Machine Learning.

However, AR/MR is mostly helpful for empowering on-site field technicians to perform the “fix” quicker, without mistakes, and without the need to carry pounds of paper or electronic schematics with them as they drive to the customer site – but they still need to drive to the customer site! Although an AR/MR solution is essentially resident in the Cloud, it still requires “feet on the street”!

One alternative would be to train the customer/user to AR/MR to perform the “fix” themselves – but this reflects an age-old conundrum as to how much power do you want to give to the customer? How much can they be trusted to make the “fix” correctly, and without damaging anything, or taking the equipment out of warranty? What about regulatory requirements, particularly in the medical/healthcare and other highly-regulated industry segments? There will need to be an orderly progression to allow some – but not all – customers to add this capability to their self-help capabilities. This is where Remote Expertise can be of great value, incorporating such features as a “virtual” technician on-screen presence, repair instructions shown via superimposed human hands, and on-screen telestration (i.e., similar to a sports commentator’s on-screen annotations during a football match, etc.).

Whatever happens from this point on, the world has changed. The way of conducting business has also changed; however, the way of supporting businesses with the services and support they require to satisfy their customers has not – it just got a lot more complicated, and, perhaps, a bit more serious. With this increased seriousness, we can “kiss goodbye” all those meaningless and frivolous attempts to “bundle” our existing services products into a “new” branded package, or otherwise try to disguise our “same old, same old” offerings by thrusting them into a tiered, or “bullion” packaging portfolio (i.e., Platinum, Gold, Silver, Bronze, etc. – that would be so 1990’s). Our customers have always been too smart for that anyway!

What the market wants – and needs – is an honest and forthright offering of service and support that will give them one less thing to worry about as they attempt to meet their immediate struggles, and their customers’ quickly evolving needs in this “new” – and very different – world.

Turbulent times require a serious approach, plus serious marketing and promotion – and it doesn’t get much more turbulent than this! We owe it to our customers, ourselves and our respective communities to rise to the occasion, and ensure that we can provide the services and support that our customers require immediately, as well as in the short-, mid- and longer-term. Services marketing and business development have never been more serious.

 

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Further Reading:

• Read more articles by Bill Pollock @ www.fieldservicenews.com/billpollock
• Read more about Covid-19 in service @ www.fieldservicenews.com/en-gb/covid-19
• Read more about Digital Transformation in field service @ www.fieldservicenews.com/digital-transformation
• Read more about 3D printing in service @ www.fieldservicenews.com/3d+printing
• Read more from Bill Pollock's own blog @ https://pollockonservice.com

Software AG and Tech Mahindra Partner to Deliver Internet of Things (IoT) and analytics innovation for Telco sector accelerating digital transformation and enhance service offerings.

The new partnership will see Software AG’s Cumulocity IoT and webMethods Integration Platforms integrated with Tech Mahindra’s IoT framework to support telecommunications customers.

Accelerating Digital Transformation in Service

Working together, Software AG and Tech Mahindra will provide Internet of Things (IoT), analytics and integration technologies, services and support. This will enable communications service providers (CSPs) and manufacturers to drive digital transformation efficiently, quickly and with maximum impact for their customers, employees and business.

Vikram Nair, President, Europe, Middle East and Africa (EMEA), Tech Mahindra, said: “As part of our TechMNxT charter, we are constantly looking to expand our partner ecosystem by connecting with industry-leading companies. This partnership will strengthen our existing relationship with Software AG, and will enable our CSPs to accelerate the roll-out of digital solutions empowered with advanced IoT solutions.”

As CSPs increasingly move towards more data-driven and value-added services revenues, powered by intelligent networks, they require substantial systems integration and solutions development work that can be best provided by Tech Mahindra and Software AG.

John Schweitzer, Chief Revenue Officer, Software AG, said “Our joint solutions will help CSPs to accelerate the rollout of new advanced IoT offerings. Working with Tech Mahindra, we have made it easier than ever for CSPs to build stronger integration with OSS, BSS and other parts of telecommunications enterprise systems. This will allow CSPs to roll out new advanced offerings and onboard new customers faster than ever before, offering an unparalleled customer experience.”

The connectivity of devices is playing a key role in service development and vendors working together to bring IoT to sectors will only assist service delivery. This new partnership will be key in deciphering the value of data-driven offerings from IoT.

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Further Reading:  

• Read more about IoT in service @ www.fieldservicenews.com/IoT
• Read more about digital transformation in service @ www.fieldservicenews.com/digitaltransformation
• Read more about the telecommunications sector in service @ www.fieldservicenews.com/TELCOS
• Read more about Software AG @ https://www.softwareag.com/
• Read more about Tech Mahindra @ www.techmahindra.com

Frost & Sullivan’s recent analysis finds the integration of 5G in Industrial Internet of Things (IIoT) systems will accelerate the realisation of Industry 4.0., a key building block of service mobility progression.

Wide-spread 5G adoption can benefit field service mobility

While the application of 5G-enabled IIoT is currently limited to quality inspections, supply chain management, and generic machine control, key system manufacturers are actively exploring other areas in industrial operations where the benefits of 5G connectivity can be leveraged for process optimisation and increased automation.

"Incorporating 5G in IIoT devices will enable low latency, increase data throughput, and reduce operation time, thus leading to improved overall process productivity,” said Mogana Tashiani, Frost & Sullivan Technical Insights Research Analyst. "Apart from enhancing the automation of industrial operations and control, 5G-enabled IIoT devices can also minimise the complexity of supply chain networks and warehouse management, helping businesses to efficiently operate in dynamic business environments."

Service leaders will be keeping a close eye on the the roll-out of 5G as widespread coverage should enhance technicians' mobility and bolster current practices such as remote working in the wake of the Covid-19 pandemic. 

Tashiani added: "5G will play a key role in ensuring the sustainability of businesses in the wake of the COVID-19 pandemic. The low latency will aid in managing the high traffic to e-commerce by improving network accessibility at a faster pace, accelerating online purchases and order placements. Furthermore, 5G-integrated IIoT devices have the potential to disrupt traditional on-site job functions through remote working and virtual meetings. COVID-19 has led to a massive shift to remote working to maintain business operations on par with on-site job operations."

Key sectors that can leverage the growth opportunities from 5G-integrated IIoT include:
Banks, Financial Services, and Insurance: The BFSI sector deals with millions of transactions every day and most of them are mundane and repetitive. 5G-integrated IoT devices and systems allow transactions to be completed and recorded at a faster pace, increasing accuracy by reducing human errors in the process, thus improving the overall productivity of the system.
Retail: Businesses in the retail sector can automate in-store transactions with 5G-ready radio-frequency identification (RFID) tags, which can be attached to items or shopping carts to facilitate autonomous check-out in brick-and-mortar stores, leading to unmanned/cashier-less stores.
Automotive: 5G facilitates data transfer among AI algorithms, sensors, and mechanical parts to navigate self-driving or autonomous vehicles. In addition, 5G-enabled vehicles establish a connected system in which real-time data transferring and receiving can be achieved conveniently and effectively. Apart from vehicle-to-vehicle communication, interaction with traffic system is possible with 5G technology, which enables data transmission beforehand to achieve practical navigation for certain road conditions.

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Further Reading:

• Read more information on Frost & Sullivan's report, Role of 5G Communication Revolutionising Industrial Internet of Things, @ https://go.frost.com
• Read more about 5G usage in service @ www.fieldservicenews.com/5g
• Read more about mobile computing in service @ www.fieldservicenews.com/mobility
• Read more about more about empowering field workers @ www.fieldservicenews.com/blog/tag/managing-the-mobile-workforce
• Read more about digital transformation @ www.fieldservicenews.com/blog/tag/digital-transformation

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

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

Curating Innovation in Field Service

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

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

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

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

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

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

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

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

 

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

 

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

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

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

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

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

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

 

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

 

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

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

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

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Further Reading: 

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