Mark Brewer, Global Industry Director - Service Management, IFS explains how the field service sector is being undeniably changed by the growing shift of companies towards servitization...
When I first started working in the field service management (FSM) space more than a decade ago, the industry landscape looked much different than it does today.
Ten years ago, organisations were looking to automate their field service processes in an attempt to decrease unpredictable costs and inefficiencies while gaining a little more control and visibility over an otherwise unpredictable industry. The core focus was scheduling and dispatch. Today, the focus has shifted, moving from core functionality towards a new, more holistic emphasis on the end customer.
It is estimated that the field service management market will grow from $1.97 billion in 2015 to $5.11 billion by 2020.
Low profit margins, increased competition and growing consumer demand fuelled by technological revolution have contributed to a major shift in the field service management market, both in demand and vendor response.
As field service organisations look to find new innovative ways to maximise operational efficiency and reduce operational costs, enterprise software vendors have established a sweet spot, spurring a flurry of field service management vendor acquisitions.
This change has created a fundamental shift in field service management, from expectations through to functionality and approach. As product-based organisations transition towards servitization and as traditional field service organisations look to adapt and grow, the following trends have emerged in order to enable the transformation.
1. END-TO-END. A NEW APPROACH MOVING AWAY FROM BEST OF BREED
Ten years ago, service organisations were simply looking to automate their existing processes.
In the majority of cases, schedules were generated on whiteboards or spreadsheets, paper work orders were manually distributed and communication between the field and back office was limited or non-existent. Best of breed solutions provided badly needed automation enabling organisations to increase efficiencies and reduce costs. Automation is now a given.
Today it is all about the data. As technology has advanced, organisations are now able to capture the data required to drive key business decisions at the highest level.
Where an automated solution provided process efficiency, an end-to-end intelligent service solution provides the seamless data flow required to optimally drive and scale the business while delighting customers. With end-to-end field service management, an organisation has access to real-time data, empowering fact based decisions and future plans.
2. CONSUMER-DRIVEN PRODUCT AND SERVICE DIRECTION
Now more than ever, today’s consumer is empowered and knows what they want. The world has become smaller thanks to globalisation, social media and connectivity in general.
Experiences are more important than ever as today’s customer has a multitude of platforms available to make their voice heard. Customer engagement is now imperative.
The shift now is moving away from selling products towards delivering ‘product-as-a-service’
The shift now is moving away from selling products towards delivering ‘product-as-a-service’. Where price has traditionally been based on product output and performance, now ‘contract value’ is based on a defined outcome, thus moving away from a transaction based model to a value based partner relationship. A field service organisation needs the right platform to facilitate this change in order to drive value from the product throughout its entire lifecycle.
3. REINVENTING OPTIMISATION
Whilst Servitization can be a strategy to drive enhanced revenue, this should not be to the detriment of service execution. Service will always be measured by how well you perform, and that means optimising the entire service chain from human capital to parts and logistics.
It also encompasses real-time measuring and monitoring of service execution enabling the transition to a proactive ‘manage by exception’ model, rather than providing a reactive response.
Optimisation is no longer viewed in isolation, optimising intraday schedules and inventory. Rather it should be considered holistically in an effort to deliver flawless end-to-end service.
The most successful field service organisations have a clear understanding of the end consumer’s expectations for today and tomorrow
The first step is to ensure they have a strong foundation or platform to start from. Core processes and systems should be running optimally to allow an organisation the ability to effectively scale and adopt new technology.
Organisations must embrace change with an enterprise-wide change management strategy.
Lastly, the most successful field service organisations have a clear understanding of the end consumer’s expectations for today and tomorrow to ensure these can be met or exceeded today as well as anticipated for the future. Value added service is no longer optional, it is the very future of service.