In this excerpt from the inaugural Field Service News Think Tanks Debrief Session, Kieran Notter discusses his experience when it comes to structuring a field service organisation to adapt a servitized approach... 

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The importance of aligning internal and external needs:

In the second of the Think Tanks discussed during this debrief session, the focus of the conversation was centred around the increasing drive towards servitization. 

One thing that came through in the Think Tank from all of the members, was the importance of executive-level buy in for a servitization project to even begin.

However, we also saw across the discussion the importance of buy-in from the bottom up as well. It really does need to be a company wide movement and adoption.

As Christo Roux commented during the Think Tank:

“In our organisation up until two years ago we had two different business units, based on two different technologies but our board reorganised and we now have three units with service being the third. Service now has a seat at the executive table and that has been the real game-changer. Now service has a very high profile, it is no longer that secondary part of the discussion which just gets added to the end of the product sale. Service is now an intrinsic part of the overall sales process. What we have found is that when you have that executive board level representation, focus and support, that does make a difference to how you can servitize.

For a long time, service has proven that in the lows of capital expenditure, service maintains the revenue stream. People always need to maintain their equipment and keep service running, so we were always a constant revenue stream at constant margins.

This was largely driven by a change in the CEO seat and a lot of credit for this shift in mindset has to go to the new CEO who had the understanding and the vision to bring service into the executive conversations.”

In that same Think Tank, Kris Oldland, Editor-in-Chief, Field Service News commented: 

“Another company I have worked with has organised their services within business units so each and every business unit is responsible for developing their own service offerings. However, what I believe they also need is a platform to establish new sertivized offerings, a central competence group that is guiding the teams to what is possible.

“Having covered the establishment of such groups in the past I’ve seen them have a real impact. Such groups, I think, should keep strategy simple and make it practical. Keeping it simple means taking baby steps, but at least you are taking them and moving forward. Making it practical is to enable these business divisions to actually deliver the projects. They are not going to invent the wheel themselves – so you have to bring it to them.

“Another organisational question in this area, is whether service is best structured as a separate business with its own P&L or as part of the product teams?

“The challenge is that if service is joined up, the focus will mainly be on the new builds or implementations, because that is where the big money is. Service is usually many smaller orders as opposed to the one big hit of the product sale. The service side of the organisation has to fight for priority and capacity and a shared understanding of the value of the long-term service relationship may ensure the organisation will accept the required investments in this case. On the other hand, if a company splits the operations, the problem becomes the handover from new build to service and customer relationship management. Ultimately, both models have challenges, the key is to realise what is the ‘inside of the battle’ and to establish the common ground to work together for the greater good.”

 

Oldland's comments reflect something of a common dichotomy in the field service sector. On the one hand there is a new innovative organization within an organization. As a company seeks to build out this servitized or advanced services solutions, they are competing with not only product sales, but also the standard, traditional service approaches within their organisation as well.

Having had experience of such challenges as a service leader himself and also in his role with ServiceMax assisting over service organisations navigate their way towards a servitized business approach, Kieran Notter, VP Global Customer Transformation, ServiceMax was well placed to help offer guidance for those on the call. 

"One thing I have learned through the relationships I've had with my own experiences when working in the service industry, and then again, working for a software company like ServiceMax, but mostly through things like the Think Tank is that is never  never clear yes on these answers," Notter began. 

"There's so many variables that come into play such as the vertical that you are operating in. You look at things like new businesses, such as solar panels, they've come into the marketplace and instead of taking an old fashioned approach where they merely sell the solar panel, they have been able to ease into a servitized approach where they sell the outcome - the energy."

"There needs to be an alignment in the business. If you move into a siloed business you're not going to help anybody, the customers or yourself..."

- Kieran Notter, ServiceMax

"So there is a totally different aspect if you're a new company, you have a little bit more freedom. Whereas in some of the more traditional industries, companies that we expect to talk to day in day out, it's realistically about establishing an understanding from the top level. I personally the key is aligning the goals that people need realised.

"I mentioned earlier about understanding whether the supply chain is service's friend or foe. If you think about the fundamental goals that are required by these two organizations, with the supply chain needing to reduce inventory and service wanting more inventory, so it can increase its first time fix rates.

"On outset, that sounds like an argument, so there needs to be an alignment in the business. If you move into a siloed business you're not going to help anybody, the customers or yourself. So there has to be some sort of alignment.  You'll find that that becomes possible maybe with some of these Tiger teams, where they can bring in people from each area and then they're freed up to do the 'free thinking' that isn't constrained by their their MDO's or their KPIs, or their compensation packages."

"It's about understanding what that is and then of course, there's always the other aspect which is when you come up with these great ideas and these visions, does your customer want to join in with that that vision? Are they acceptable to it or indeed, are they actually against it? Then if you find the ones that are acceptable to the idea, can you actually manage it? What infrastructure do you have to actually manage the offering that you're giving?"

"However, I think the world is dictating a newer approach. You know, when we heard from Coen and Daniel earlier and talking to all of the members of the Think Tank, we're looking at new initiatives, new intelligence, new ways of doing business."

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