Today’s Service KPIs Must Address Both “Back to the Basics” and “Back to the Future”

Sep 30, 2020 • Features • Servitization and Advanced Services

We are at a tipping point in field service as we move from the traditional break-fix thinking towards field service to a more proactive approach. However, there is a balance to be held which Bill Pollock, President, Strategies for Growth discusses at length here...

The transition from the historical Service Level Agreement (SLA) model to a more broadly defined Servitisation, or outcomes-based, model is upending the global field services community. In fact, the movement away from a decades-old SLA service delivery model that typically guaranteed 4- or 8-hour on-site response, quarterly PMs (i.e., Preventive Maintenance) and online customer technical support is quickly being replaced by a “new” model that is built on a foundation of outcomes-based performance targets and metrics.

For example, in a typical food or beverage processing facility, the “old” way of executing an SLA may have been based on an assortment of contractual line items, such as guaranteed 4-hour, 8-hour or next day on-site arrival; 4 or more preventive maintenance visits per year; or access to a customer portal to initiate a service call, track the status of open call activity or order parts, etc. However, the “new” way of constructing a service agreement may now consist simply of delivering guaranteed system uptime, guaranteed minimum level of productivity throughput (e.g., gallons of milk processed per day, etc.), and an accompanying array of predictive and remote monitoring, diagnostics and system fixes.

As a result of this looming seismic shake-up of the way in which service performance is measured, some of the traditional Key Performance Indicators (KPIs), used by virtually all services organisations, will likely soon be replaced by a swath of “new” metrics, where we will likely see:

Mean-Time-Between-Failures (MTBF) being replaced by Mean-Time-Between-Prevented-Failures (MTBPF)
Mean-Time-to-Repair (MTTR) measured in seconds or minutes, rather than in hours or days
First-Time-Fix-Rate (FTFR), similarly being measured in seconds or minutes
Preventive Maintenance (PM) being replaced by Pre-emptive Maintenance Support (PMS)

The immediate impact of these “new” KPIs will also, undoubtedly, cause year-over-year comparisons to have to wait at least a year or more in order to, once again, be relevant.

Along with this service delivery model transition also comes a major transition in the way services are being priced. As an example, over the past several years, the shift from perpetual license pricing to subscription pricing had taken some time to be fully embraced by the global services community; but the change has since become much more widely accepted and is now fairly universal. However, each of these major “disruptions” to the services marketplace have seemingly led to additional changes that may actually be even more disruptive – at least in the Post-COVID-19 short term.

Each of these major “disruptions” to the services marketplace are already leading to additional changes that may actually be even more disruptive – at least in the immediate- and short-term. For example, the “old” mission for services organisations was essentially “to keep up with the Jones’s – the Jones’s typically being represented by the competition, ever-evolving customer needs and requirements, availability of improved technology tools and resources, and the like. However, the “new” mission is now much more reflective of keeping up with “existential developments” (i.e., the COVID-19 pandemic, and/or whatever comes up next!).

"The impact of COVID-19 has basically expedited the process of re-looking at and re-engineering the ways in which our customers are delivering service..."

- Steve Mason, FieldAware

As a result, there will be a whole “new” way of delivering service, as well as measuring the success of the organisation through an entirely “new” set of KPIs, or metrics. [By the way – I have already written many times about the need for “new” KPIs/metrics and, respectfully claim the rights to MTBPF!]

Steve Mason, COO at FieldAware, a cutting-edge, cloud-based, mobile field service management platform that empowers companies to transform their field service organisation through automated processes and streamlined operations, concurs that, “The impact of COVID-19 has basically expedited the process of re-looking at and re-engineering the ways in which our customers are delivering service, as well as the means by which they can measure their performance success. The traditional ways of managing field services are now transforming, and the only way for today’s FSOs to ensure that they will still be around tomorrow, is to lead the change – rather than follow the leaders”.

This transformation is impacting all sectors of the global services market, as explained by Tim Andrew, CEO and Co-founder of localz, a global provider of real-time customer communications and service tracking solutions for field, collection and delivery teams. “The bar for field service is increasingly being set by forces outside the service industry – from the global pandemic, to the B2C customer experience. We aim to make it easy for service companies to keep up with changing behaviours, while delivering on key metrics such as first-time-fix-rate. That is why we believe this transformation will soon be felt throughout the field service segment, regardless of the size, coverage or depth of the service organisation”.

However, for many service managers, it is one thing to set goals and measurement standards, but another to actually implement them. They will still need to empower their teams to develop the “new” goals and associated KPIs that will be needed by following these guidelines:

Set targets – decide on the baseline, and define standards or targets; then create a plan to reach them.

Define a scoring methodology – determine how you will be measuring success and assign individual scores that roll-up to a total score for each category; for example, in measuring and tracking Customer Satisfaction performance:

- 95% to 100% = Exceeds expectations

- 85% to <95% = Meets expectations

- 0 to <85% = Does not meet expectations

Link KPIs – to critical factors that drive the performance of the organisation. If the metric is not directly linked to a critical organisation success factor, it will probably not be worth the resources to measure.

Assign someone to take ownership – of the data being collected, processed and shared. If you do not have accurate data to report on, there is no chance you will be able to recognise achieving your goals.

Communicate KPIs clearly – to every party involved.

Invest in resources necessary to achieve goals – you cannot expect someone to improve performance metrics in an area without first listening to their needs, and then giving them the resources necessary to make improvements.

Foster collaboration between sales and service – give sales-reps an incentive to sell more service contracts to turn the service department into an improved profit center.

Without a formal set of objective, realistic, quantifiable, and actionable KPIs, your organisation may never be able to accurately assess its performance over time – especially post-COVID-19! However, by using the proper mix of both “traditional” and “new” KPIs, both the organisation, and each of its key departments and divisions, will be able to measure their success – or lack thereof – on an ongoing basis, with the ability to identify problems, cultivate opportunities, and make improvements, as necessary, all along the way.