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Firstly, in an industry that has been going through a spate of acquisitions over the last two years, the amount was quite simply eye-watering and just blew everything out of the water. Secondly, this was an acquisition that came right out of left field. Many analysts may have predicted that ServiceMax would eventually be acquired having been the industries biggest success story, but few would have suggested that an industrial force such as GE may have been the suitor that would become their new home. Kris Oldland, Editor-in-Chief, Field Service News, spoke exclusively to the senior players at both ServiceMax and GE Digital to find out how things are bedding in...
When the ServiceMax from GE Digital train rolled into Berlin towards the end of last year for the European leg of their series of Maximize conferences, there was an exciting mix of vivacious confidence between the ServiceMax team and keen curiosity and anticipation between the delegates - who were in the main ServiceMax customers.
Of course, this was to be expected - as it is at such events that ServiceMax have traditionally announced their latest developments and outlined how they had refined their roadmap. In past iterations of the conference, we've seen ServiceMax announce a number of industry firsts including the announcement in 2016 of Field Service Connect - which essentially established a blueprint for the role field service management systems will play in our sector adopting IoT that is being mirrored by a number of their peers.
And that's not to mention the little matter of GE Digital's acquisition of ServiceMax for an incredible $900Bn which was announced just days after 2016's Maximize Europe event in Amsterdam.
With just over a year having passed it was a perfect time to see how well embedded ServiceMax had become within the GE Digital machine, and just how much such significant investment had changed their vision for the future of both their organisation and of field service delivery itself.Indeed, with just over a year having passed it was a perfect time to see how well embedded ServiceMax had become within the GE Digital machine, and just how much such significant investment had changed their vision for the future of both their organisation and of field service delivery itself.
Having spent a lot of time with Yarnold and his senior team over the last few years, one thing that has always come to the fore was that there was an inherent understanding of what excellent service looked like, and the ServiceMax vision was always about trying to develop the tools to make meeting standards of service excellence that much easier.
I recall speaking to Yarnold in 2016 about the ethos of the company, and he explained then how they felt that most of the technology in the Field Service Management sector was geared towards taking cost out. What they realised very early on into their journey to becoming a leader within the industry was that there was a critical emerging trend - companies who were building products were experiencing much faster growth in the services side of the business than the product side.
We focussed on helping companies to grow their service business as opposed to squeezing their technicians for more productivity - which is still where most of the technology in our space is focussed"So we focussed on helping companies to grow their service business as opposed to squeezing their technicians for more productivity - which is still where most of the technology in our space is focussed" Yarnold had stated back then.
Of course, this approach has become widely embraced by most of ServiceMax's peers as solution providers realise that most companies now have at least one foot planted firmly in a service-centric world and as concepts such as servitization and outcome-based services go mainstream.
However, while there is no denying the prescience of Yarnold and his team's approach, until last year they were always just an observer of trends within the field service sector, only experiencing them indirectly via how they impacted their client base. But now as part of GE, an organisation that has something upward of 40,000 service engineers in various different divisions and across multiple sectors globally, they now have a direct line into a wealth of field service directors that are all on the same team.
I was curious as to what if any impact this would have on ServiceMax regarding how they position their worldview on what great field service looks like. In his opening address early that day Yarnold had touched upon shared learnings - so was it a case of their previous assertions being validated? Or was there an element of identifying essential details that could only be seen when one is embedded that little bit closer to the actual coalface?
"It is a bit of both" responds Yarnold. "We are part of GE Digital which has the Predix platform and then these application areas APM and ServiceMax, and we are separate from the rest of the GE business which are the industrial business units such as Oil and Gas, Power Generation and Healthcare and so on. Each of those business has their own field service operation, and each of those businesses is rolling out ServiceMax. So we're not part of the organisation, but we have the home team there to draw on."
To bring this message to life Yarnold recounts how before the acquisition Sharma, who at the time was the CIO of GE's Oil and Gas business had been a somewhat challenging customer, but once they were on the same side of the table the value that ServiceMax brought to the table was revealed to actually be hugely valued. "I do wish he'd maybe told me a bit sooner'' Yarnold said playfully which brought a warm laugh from Sharma - and in this brief exchange, the camaraderie and trust between the two were immediately brought to the fore, something usually found within relationships built on a mutual respect.
It's been a good balance so far, and we're just starting to tap into that knowledge of those industries and the vertical specific complexities of those industries. It keeps things fresh and challenging, but that's what we want. We want that challenge"So yes there was a lot of affirmation" Yarnold commented returning to the initial question. "Then where I think the learnings are coming in. As we start to work with these folks and we start to understand what their customers, the service, and maintenance organisations are all about - we need to ask how do we continue to evolve and build our product so that they fit those organisations. Utilities, Airlines, Railroads, Oil Companies - these have not necessarily been our direct customers to date and we're learning a lot about that. We're also learning a lot about metrics and measuring business. It's been a good balance so far, and we're just starting to tap into that knowledge of those industries and the vertical specific complexities of those industries. It keeps things fresh and challenging, but that's what we want. We want that challenge."
So would it be fair to assume that given this additional stream of insight there maybe a change to the roadmap that ServiceMax has outlined for themselves? Kasai picks up this point. "I think you outlined it well when you positioned it as an expansion" he replied when we tackle this topic.
"Both being part of the wider family of GE but also the massive investment is a much needed, as we really need to expand our portfolio into new markets and new capabilities. We'd always made a conscious effort not to go into many of these industries for a variety of reasons, but largely from a focus point of view. But now we have I believe, a solid competitive edge from a channel point of view with great customer relationships. We have an understanding of the domain within those industries, and it would have been tough just to walk in and grow that knowledge. Thirdly, we have the capital to go ahead and invest in the development of the products to actually develop those capabilities for these industries. It is a combination of these three things which essentially makes a brand new company - there is so much potential and that what we're all really excited about, where do we go next?"
It is interesting the Kasai mentions how the new environment in which they find themselves in is in many ways akin to being an entirely new company. It brings back recollections of another previous conversation with Yarnold the day the acquisition was announced. "It is not the start of a new chapter; it is the start of a whole new book" he had commented, which is a strong analogy, as this latest incarnation of ServiceMax is indeed a distinct creature than that which has come before. However, likely any great novel within a series, the fundamental aspects of what made it a best-seller in the first place must remain in place. To extend the metaphor to its very limits, there must be a familiarity and continuity in place if it is going to build on the successes of previous in the broader in the ongoing saga.
In other words, ServiceMax as part of GE Digital must build upon the strong foundations that are already in place. Yet, for such a substantial investment, they simply have to evolve as both Kasai and Yarnold suggested. However, it seems that this is something that is very much already starting to happen as the ServiceMax team becomes plugged into the broader world of GE.
Such cohesion and deep level insight will not only drive the functionality of ServiceMax forward hugely but by doing so will also raise the bar for the industry as a whole. As Sharma explains" Something we have done recently is to have seven business swarm ServiceMax from which we've then built a core centre of excellence capability - it is a very focused team, they have both deep domain expertise and have also been ServiceMax users for a very long time. From this, we have developed accelerators to help improve deliverability, but it has also become a great feedback loop to Rei and the product team."
It is this type of integration that many of the analysts within the industry (including myself), hoped to see emerge when the acquisition was announced. As such cohesion and deep level insight will not only drive the functionality of ServiceMax forward hugely but by doing so will also raise the bar for the industry as a whole.
It was undoubtedly one of the most interesting aspects of the acquisition that I discussed at the time in that there is vast potential for the further development of important solutions when a major player such as ServiceMax is embedded within an organisation that has such a fine-grained level of knowledge of delivering service, rather than being swallowed up by just another major software house that many would have expected.
Yet for the full value of this to be played out there has to be a true ebb and flow of dialogue between ServiceMax and the wider organisation - something which Sharma indicates clearly exists. "We attack things together, working with the platform team, ServiceMax and ourselves, on an integrated asset model of the future. We are talking about working within large-scale operations and exploring how do you augment and drive participation? It is a great way to valid test or experiment with a capability, and we give instant feedback."
We have the fortunate situation where we have a very large-scale service organisation as a captive audience, and we have an organisation that's capable of delivering these great capabilities to these organisations. "When you develop new products you have to be very iterative, you have to have a small set of customers to be constantly testing against so you that you eventually build a scalable product for the masses. If you look at these new capabilities, we are looking at it very much through that lens, and we have the fortunate situation where we have a very large-scale service organisation as a captive audience, and we have an organisation that's capable of delivering these great capabilities to these organisations."
Of course, the most visible return on GE's investment so far, certainly from a product perspective, would for most people in the industry be the close integration between ServiceMax's Connected Field Service suite and another of GE Digital's offerings, Asset Performance Management (APM). As we've covered previously in Field Service News, the combination of these two tools pushes us with far more certainty than ever before into the world of IoT based field service. So is this a clear indication of the direction that both GE and ServiceMax see as the future of field service delivery?
"I think what the move to predictive really does is that it puts everything on your terms," comments Yarnold. "You're planning ahead of time; you can predict who is going to go where with a high probability of success. This will, of course, increase efficiency but it is also a huge value add to the customer - you're in a position to now delight them, because the right people are showing up, they know the history, they know what is required and so on. I just think it changes the model entirely."
"Outages are needed, machinery gets worn out" adds Sharma, "the question is how can you replace these in a planned way because when it's unplanned, that's where really bad stuff happens. The notion that is important to me is about focusing on getting to almost zero-unplanned downtime. That is where I think the industry is going to head."
As Yarnold had expressed to me previously, it seems clear that there are kindred spirits and a shared DNA somewhere between the two organisations, and most certainly a shared vision for the future of field service. In terms of their influence on the wider market both ServiceMax and GE have played a role in getting us to where we are today. How far they can continue to push the field service sector forwards as one cohesive unit remains to be seen, but the early indications would suggest that they will remain at the vanguard of innovation within service delivery for the foreseeable future. As each of Kasai, Yarnold, and Sharma commented at various points across our discussion - it's all hugely exciting.
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The Field Service Management software industry is fiercely competitive and one that in the last few years has been in almost constant flux as new technologies continue to push the boundaries of what is possible.
The Field Service Management software industry is fiercely competitive and one that in the last few years has been in almost constant flux as new technologies continue to push the boundaries of what is possible.
Yet, across the last decade there has been one company that has risen from a humble start-up to globally recognised industry leader. That company is ServiceMax, and the man that has led that incredible rise to prominence is CEO Dave Yarnold. Kris Oldland, FSN Editor-in-Chief, spoke exclusively with him as he stopped by the ServiceMax London HQ on whistle-stop tour of Europe...
The ServiceMax story really is an incredibly compelling one - while stories of start-ups that become market leaders are not completely unique, they are few and far between and in the competitive world of field service management systems, their rapid rise to prominence within the last decade is out their on it’s own in terms of success.
Indeed, there are some really great service management providers out there that have a built solid businesses serving their small corner of what is in reality a huge market. Companies that are happy to feed off the crumbs (and make a very profitable living in doing so) that fall down from the big table where the traditionally established players such as ClickSoftware or Astea fight for elbow room with software heavyweights such as Microsoft and Oracle.
But this was never going to be the path that Dave Yarnold, CEO and co-founder of ServiceMax was going to choose.
Even back in the inception days in what Yarnold affectionately refers back to as the ‘beige palace’, a nondescript office tucked away in Silicon Valley, there was a distinct vision - and perhaps a key reason for their success was that, that vision wasn’t just to be another software provider trying to serve the field service sector but instead to form a company that intrinsically understood what good service was and then build tools to help engender that within their clients.
We looked at what everybody was doing around service and we thought everyone was missing the point in two respects
“We also felt that all the technology was geared to taking cost out and what we stumbled on early on was an interesting trend that anybody who was building products were experiencing much faster growth in the services side of the business than the product side.”
“The global economy has slowed down - especially since the last great recession, so that means you’re not selling as much product but there is certainly enough opportunities to get value out of the infrastructure, customer base and install base that you have. So we focussed on helping companies to grow their service business as opposed to squeeze their technicians for more productivity - which is still where most of the technology in our space is focussed.” He adds.
It is a valid point that Yarnold makes, as the economy crashed on a global scale, suddenly service became fore and centre as very simply there were no more margins left to cut. Competing on price in many industries was just no longer an option.
However, with the economy on (slightly) more stable footing these days, the shift to service centric businesses is less about a necessary differentiator and more about building more profitable and sustainable, longer term relationships. A case in point being Sony’s Professional Service’s division, who have developed a servitized business model, using ServiceMax as their FSM system. But was this shift to services something that Yarnold had always envisaged?
“A great analogue to answer that question is to look at the software industry.” He replies. “I remember back in the year 2000 when Salesforce emerged and the idea of Cloud computing and Software as a Service as a business model was nowhere to be seen. The reason why it became the primary mode of delivering software was because it was what customers wanted. They wanted a balanced relationship , a long relationship, a relationship where they felt like they weren’t entering into an agreement knowing the supplier was getting all of the profit up front on day one.
The fact that the software industry has gone through this complete disruption, and all the leaders in the sector have now embraced this model - that’s not lost on manufacturing companies.
“You look at the long-term, recession proof benefits of that business model and the lock in that that brings, it’s a really attractive proposition.”
Of course mention of Salesforce, brings us to the elephant in the room.
While Yarnold and his co-founders vision was certainly a driving force for the success of ServiceMax, it is undeniable that they also rode the slipstream of Salesforce’s own phenomenal growth. Now with Salesforce entering the market themselves with Field Service Lightning, does this represent a significant threat to ServiceMax’s continued growth?
“It’s not like it was a surprise to us, it took them a while but they realised that this [field service] is a pretty big market,” Yarnold begins bullishly.
“For us, it’s interesting being the only guys in the market that believe in the business model of servitization and where this is all going. I see even in the direction of their [Salesforce’s] product that it’s the old cost reduction approach. It’s a scheduling centric app that is leveraging technology that ClickSoftware built on their platform - which is all around schedule optimisation.”
I think it’s interesting what they [Salesforce] are doing, but it is also old school in my opinion, it’s still cost based, which is kind of boring to people who run service businesses.”
One for is for certain though, if an original vision and harnessing the growing momentum of Salesforce were the initial keys to success, the ‘special sauce’ that has allowed ServiceMax to truly flourish has been there intelligent acquisition of talent in key roles that truly understand the industry. Yet, it’s clear that the passion for service stems from the very top.
“At the core of it, if you go back to the three of us when we started, we just care about this. We think it’s vital. From a standpoint of what we as consumers expect from a service relationship. When we really start to dig into it, it’s not just software, it’s an important part of business, an important part of the relationship that we all expect and take for granted, and there’s this army of people making it all happen.”
“So the follow on from that is if we are going to try and enable all this, then we’ve got to try and find people who’ve experienced it - people like Dave Hart (a former Service Director and customer now working in a global customer transformation role with ServiceMax) who live eat and breath this stuff and have built there career around it.”
Having spent an hour in Yarnold’s company the one thing that is clear is that ServiceMax isn’t just a software company. They are a company which already deeply understands field service, yet is continuously learning more about the sector each day and that I would venture is the true key to their success.
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ClickSoftware have for a long time been seen as a key leader amongst field service solution providers. But the sector has gone through rapid evolution within the last few years with technology moving forward whilst the market becomes ever more...
ClickSoftware have for a long time been seen as a key leader amongst field service solution providers. But the sector has gone through rapid evolution within the last few years with technology moving forward whilst the market becomes ever more competitive.
Meanwhile, ClickSoftware have been through an evolution of their own, with new ownership and a new CEO Tom Heiser, at the helm.
And he is determined to see the optimisation specialists stay at the forefront of the industry. Kris Oldland reports...
If you ask any seasoned field service professional to name check three field service software providers you can almost guarantee that ClickSoftware will be one of those they mention.
For many years ClickSoftware has been viewed as the gold standard in terms of field service optimisation. However, the market is going through rapid change and is now more fiercely competitive than ever before. In such an environment, relying on past reputations is a dangerous game to play - even when your reputation is one as strong as that which ClickSoftware can boast.
However, across the last year, ClickSoftware have gone through rapid changes of their own. After long running and widespread rumours of SAP acquiring the company proved to ultimately be unfounded, the company was purchased by Californian based private equity firm Fransicso Partners.
This was followed by the appointment of Tom Heiser, formerly of EMC as a new CEO, and whilst many of the Israeli talent that pushed ClickSoftware to the forefront of the sector remain on board, Heiser’s arrival heralds a new era for ClickSoftware, with both their approach to technology and culture having a delicate shift of focus to help them hold on to their position as an industry leader.
When we meet for the first time Heiser himself comes across initially as very much something of a people person, a firm handshake is balanced by a warm ‘Hollywood’ smile and he carries that air of informality and confidence that seems to be becoming commonplace amongst senior executives working for US tech firms these days.
When we meet we are also joined by Mike Karlskind, a man with a career spanning some twenty years plus with ClickSoftware.
"They were saying to me, the technology behind ClickSoftware is right at the top, but you guys really need to start banging the drum some more...”
His aim it seems, is not so much a complete re-imagining and reinvention of ClickSoftware, more gentle refinement, to ensure that the company remains ahead both in terms of technology and of course market-share.
Part of that process is ensuring that the company retain a focus on R&D but also that they make sure the market is aware of that focus.
“Before I flew over here I spent sat down with some senior industry analysts in Israel “ says Heiser, “and they were saying to me, the technology behind ClickSoftware is right at the top, but you guys really need to start banging the drum some more.”
Indeed, in their midsts ClickSoftware have some fantastic success stories, including European automobile glass replacement giant Belron, who operate in the UK as Autoglass.
“Mike and I have been speaking to a number of our clients’ COOs, Presidents etc recently and having strategic conversations around how to best leverage our solution and one of the best examples is Autoglass based over here [in the UK]"
“They have a net promoter customer satisfaction score which is like crazy high and they’re using ClickSoftware as a tool to completely differentiate themselves from their competition, and I’m really proud to see that.”
But what about the shift in focus in terms of technology? What can we expect from ClickSoftware moving forwards?
Well it is clear from speaking with Heiser that he sees very much the future of both ClickSoftware and enterprise computing in general, as being based in the Cloud. However, he also understands that the shift from the still prevalent traditional on-premise model to a Cloud based world is not solely about the development of the technology.
“The thing is, shifting and changing the culture is actually harder than getting the technology right,” he begins.
“With the technology, you just get the right people, you invest in it, and you’re going to ultimately do it..."
“Now we have with a board of six people in Moshe [former CEO and founder] myself and four guys from Francisco Partners, who are all super smart guys that have done this before. So I feel with the six of us we can do it, but how do we do this with the new business models?”
“How do we go from an on-premise model with cash flow up front to a subscription model which is where we feel we need to be. Everybody wants to be on the other side, nobody wants to go through that process. But we’re set to get there.”
As he speaks, Heiser conveys a sense of the magnitude of the task not only faced by him and his team in terms of moving with the ever growing traction driving software solutions towards the Cloud, but also faced by the industry in general.
However, there is also an underlying confidence that he and his team are more than up to the challenge, that he cannot contain.
[quote float="right']I look at culture as the biggest challenge, but then there are some people here that are so energised by what we’re doing it’s like, ‘let’s go faster’“Culture is the third element we need to mention. I look at culture as the biggest challenge, but then there are some people here that are so energised by what we’re doing it’s like, ‘let’s go faster’ I feel like I’m holding you back! - It’s really invigorating, but we need to rein it in every now and then and make sure we’re all on the same track.”
Having spent an hour with Heiser, it is clear his enthusiasm could genuinely be infectious, yet it is also clear that he is grounded enough to see the woods as well as the trees. He is also smart enough to not only keep key members of his team such as Karlskind close by, but also to admit when it is time to turn to them for support.
There may have been a number of changes for ClickSoftware in the last year or so, but with Heiser at the helm there is a good chance that their position as one of the leading brands in the market will remain firmly intact.