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The growing digital transformation is blurring industry boundaries and altering established positions of firms. While manufacturers are investing strategically in data collection, analytics capabilities, and in cloud-based platforms, many firms remain concerned about how to best address digital disruption and enable digitalization.
Last year, General Electric cut expenses by more than 25% at its digital unit responsible for Predix, its software platform for data collection and analysis, which previously has been hailed as a revolutionary driver for Industry 4.0. This move highlights the difficulties involved in adopting digital technology in an industrial business.
Having worked with B2B firms in diverse industries on designing and implementing service-growth p84 strategies, we have seen both highly successful and unsuccessful cases of what we call ‘digital servitization.’ Why do firms with a proven track record of running successful field service organizations struggle with implementing digitallyenabled services?
Before looking at some key challenges, let us first define what we mean by digital servitization. As a start, we need to distinguish between digitization, which means turning analog data into digital data, and digitalization, which refers to the use of digital technology to change the business model. A tech-savvy firm with a product-centric mindset may have little difficulty in implementing digitization, as when record companies moved from selling LPs to CDs. However, rather than embracing the new digital opportunities that changed the way we interact with music, most record companies then clung on to a product-centric business logic of selling CDs. Instead of developing business models based on Internet distribution they promoted new physical media like the Super Audio CD.
Ironically, their defensive stance—manifested in such things as copy protected CDs—forced many people to illegal downloading in order to conveniently access MP3 music, thereby undermining their product-centric model even further. Digital servitization, then, refers to the utilization of digital technologies for shifting altogether from a product-centric to a service-centric business model. Of course, digitally-enabled services are not new; for example, Rolls- Royce’s archetypal solution TotalCare began in 1997 and BT Industries (since 2000 part of Toyota Material Handling) created its software system BT Compass in 1993, to help its customers improve their performance.
Likewise, leading bearings manufacturer SKF started early on remote monitoring bearings usage data flowing 24/7 from industrial customer’s equipment installed around the globe. Digital technology, however, can be a double-edged sword. For example, many manufacturers have been carried away by the technical possibilities of telematics without having a clear service business model in mind. Rather than crafting a compelling value proposition based on enhanced customer performance, it was tempting to give the service away for free with the hope that customers eventually would discover the value of data access and be willing to pay for it.
There are however at least three problems with such a technologycentric approach. First, as the connected installed base grows and the costs of collecting and managing data increase year over year, it becomes more and more difficult to defend the model unless service sales start to materialize. Second, giving services away for free always reduce the perceived value of the offering in the eyes of the customer. Why should they pay for something that was previously free of charge and that competitors may still be treating as
a commodity and giving away?
"The growing digital transformation is blurring industry boundaries and altering established positions of firms..."
Third, customers typically do not have the time nor the skills to thoroughly analyze data collected and take appropriate corrective actions. The real value of data and analytics lies in a company’s ability to identify and implement adequate changes. By collecting and analyzing data across multiple customers, a supplier may know more about the customers’ equipment and operations then they know themselves.
Benchmarking performance across industry applications and customers thus provides attractive opportunities for new advanced advisory services. The digital dimension of service growth requires purposeful and coordinated effort. As we know, while manufacturing and conventional R&D activities can be centrally managed to achieve efficiency and standardization, services require increased local responsiveness and closer customer relationships. During digital servitization, however, the central organization must take a more proactive leading role to ensure platform consistency and data quality, to provide the requisite data science skills, to support local units, and to address cyber security issues.
The 2017 large-scale cyberattack (NotPetya) on Danish shipping giant Møller-Maersk, which shut down offices worldwide, illustrates the dangers of inadequately managing the latter issue. Viewing data as “the new oil” is a frequent claim these days. Like oil, data is a source of power. It is a resource used to fuel transformative technologies such as automation, artificial intelligence, and predictive analytics. However, unlike oil, data also has other properties.
We are currently seeing a shift from scarcity of information (data) to abundance of it. Data can be replicated and distributed as marginal cost, and competitive advantage can be achieved by bringing together new datasets, enabling new services. But this also creates new tensions between companies regarding the issues of generation, collection, and utilization of data. If a customer is generating massive amounts of data collected by a supplier, then once processed, it can be used for better serving also the customer’s competitors. In other cases, we are seeing completely new entrants emerging and collecting data on behalf of their clients.
Digitalization is beginning to have a profound impact on even the most stable businesses. Customers increasingly expect a single provider to integrate individual components and products into a system, and that they will do so through one digital interface.
Whether the platform provider is one of the established OEMs, or a new software entrant, often does not matter to customers. Competition may come from unexpected sources, as for example when one of the leading international standards organizations in the marine industry recently moved into platform-based services. Oftentimes, the most formidable threat comes from disruptive innovators outside the traditional industry boundaries.
An executive in a leading incumbent firm stressed that her main concern was not the competition from any established player. Instead, what kept her awake at night was the prospect of Amazon entering—and reshaping—the market. While many share the concerns of being overrun by new competitors, the threat is most imminent to those firms that lack service leadership and a clear roadmap for service growth. To conclude, no firm can afford avoid strategically investing in digitalization.
However, as firms compete in the digital arena, there is a risk that focus shifts too much away from service and customer centricity to new digital initiatives and units. Ten years ago, many executives sang the praises of servitization. Today, digitalization is the poster child for business transformation. Given the rapid pace of innovation, it may be tempting to launch new concepts as soon as the technology is available, rather than waiting until the they have been properly piloted and customer insights gained.
To reap the benefits, firms also need to understand back-end and front-end interactions, investing in both back-end development for enhanced efficiency and better-informed decision-making, and front-end initiatives to enable new services and closer customer integration. Correctly designed and implemented, digital servitization provides benefits for companies, networks, and society at large. Successfully seizing digital opportunities, however, requires more, not less, service and customer centricity than before.
Dr. Christian Kowalkowski is Professor of Industrial Marketing at Linköping University, Sweden, and the author of Service Strategy in Action: A Practical Guide for Growing Your B2B Service and Solution Business. Find out more on www.ServiceStrategyInAction.com.
Dr. h.c. Wolfgang Ulaga is Senior Affiliate Professor of Marketing at INSEAD, Fontainebleau, France. He is the author of Service Strategy in Action: A Practical Guide for Growing Your B2B Service and Solution Business. He also authored Data Monetization: A Practical Roadmap for Framing, Pricing, and Selling Your B2B Digital Offers.
Silos are a challenge for most organisations, with a silo mentality or infrastructure one of the biggest barriers to business success. Where different offices or departments don’t share information with others in the same company, both efficiency and productivity are diminished.
In response, management teams must do more to educate and equip their teams with everything needed to break them down. And, to do this, two things must happen.
A change in attitude
Silos occur when individuals, teams, offices or departments are unwilling to share resources or ideas with the larger organisation. These factions fail to see how cooperation can help them to work smarter and are often reluctant to share data or ideas for fear of negative scrutiny or consequences.
Quite often this culture is passed down from the top, with a lack of inter-departmental meetings, training sessions or information-sharing strategies. But, this attitude can cause damage to the organisation as a whole by wasting resources, stifling productivity and hampering the realisation of goals.
Naturally, different groups within a business often have different priorities. But regular meetings between teams (or at the very least team leaders) is a must if you want to create an open and collaborative culture. Not least because, by ensuring managers know what other departments are working on, opportunities for collaboration and business improvements will develop.
Breaking down silos also helps to stop the build-up of resentment, blame and frustration. Because once everyone knows what everyone else is doing, it is easier to identify solutions that will work.
To help to boost collaboration across your company, you should look to:
- Establish a united vision and set of goals at the heart of your organisation
- Make sure your leadership team is on board with this vision and goals
- Ensure your leadership team understands the damage that can be caused by silos, and the opportunities that exist when they are removed
- Ensure managers communicate these messages and approach to the wider business
- Implement training to help create and support a collaborative culture
- Incentivise managers and individuals who succeed in breaking down barriers
- Establish KPIs to help measure the success of your efforts (and to identify where more work is needed)
- Establish working practices and spaces that foster collaboration rather than hinder it
- Encourage constructive feedback.
A change in technology
Of course, merely being aware of the need for greater collaboration across a business isn’t enough. You also have to put the tools in place to enable this to happen.
In most cases, IT silos (where systems are unable to communicate resulting in an environment of disparate technology and practices) are not deliberate. They have simply evolved. For example, the customer support department within an organisation chose to invest in a specific system, while the sales department opted for another. Because each team had their own priorities, responsibilities and vision, neither thought about whether having two standalone systems would cause issues further down the line.
But as long as different departments continue to use separate databanks, without sharing this info (or even being aware of what the other is doing), the benefits of modern tech will never be fully exploited. So, not tackling historical silos is no longer an option. In 2019, you can’t have your call centre telling people one thing, while your marketing department is sharing opposing information.
Capable of creating a single, integrated infrastructure, the latest cloud-based software encourages the simplification and standardisation of business processes, while helping people across your organisation to work collaboratively with one another.
Even better, real-time collaboration is possible. So, when an employee in one place makes a change, that information is immediately available to others, regardless of where they are.
For example, with everything available via the cloud, mobile employees can fill in electronic forms using smartphones or tablets, and this information automatically and immediately syncs with your back office systems. Indeed, SaaS applications are capable of performing a vast range of business tasks, while opening up unprecedented opportunities for enhanced collaboration.
Historically, if an organisation wanted to make a significant change to their IT, this would be a costly task. But cloud computing breaks this trend by providing access to enterprise-level software at an affordable price. And, because moving to the cloud tends to be a business decision rather than one made by IT departments in isolation, cloud-based field service software is a silo-busting investment from the off.
Many manufacturers experience pressure on growth, revenue and margins. Their products and services are being commoditised. Competition from lower cost alternatives are arising. On the other hand, there are huge opportunities with new technologies, value propositions and business models.
One of the important trends is that value propositions and offerings become more data-driven and more service-oriented, which go hand in hand.
Besides predictive maintenance, most of the value from data is related to how clients use the equipment or products and to their operations and processes. Helping clients improve on this by nature is a service.
However, many manufacturers are product-driven businesses which do not fully appreciate the value that (advanced) services have for their customers and their own business.
So, one of the central questions is: How to Monetise Services and Data to Grow in a Disruptive World? The capability to monetising service and data is mission critical for sustainable performance and existence of manufacturers.
In a series of articles, we cover four critical steps that make the difference between success and failure in monetising services and data:
• Solve bigger customer problems;
• Articulate the value;
• Build momentum with clients to adopt;
• Build internal momentum.
Developing new data-driven solutions and services is all about extending the existing business model, which leads to different challenges than many other initiatives and programs in a business. Recognising this in advance will help understand the challenges and best strategies.
In the previous articles of this series, I have described critical success factors for monetising service and data, such as Solve Bigger Problems,Better Articulate Value and Remove Obstacles for Clients to Adopt. In the end, this all has to be done by people and teams in your organization.
In this article I will describe common mistakes that many companies make, which holds them back in having fluid and energising change, and to move beyond business-as-usual in their endeavours to monetise service and data.
Many companies, including manufacturers, do not have a clear picture of where the industry is heading and where their business is heading. It is unclear for their employees what needs to be developed and why.
More specific, for many employees it is not clear why the new service and data-driven solutions are that valuable to clients, how it would fit in the overall core business and why it should be paid for by clients. Often, the indicated direction even suggests the opposite and may give room to the logic that value added services and datadriven solutions are (free) features to support the product sales.
Just imagine how a hypothetical mission statement “… being the world’s leading manufacturer of construction equipment and engines” would help develop and monetise advanced services and data-driven solutions.
People in manufacturing are often biased towards products, equipment and technology. They have a narrow view on:
• Customer problems beyond the requirements for the products and equipment;
• How other actors in the industry are developing with advanced data capabilities, which could become competition to the current position of a manufacturer;
• How new technology can be applied to develop new value propositions, solutions and operating models.
This will affect how product managers, marketing and innovation will develop new services and data-driven solutions. Too often, we see that the services and solutions do not always solve a customer problem and hardly differentiate from services and solutions competitors are offering as well.
It will also affect how their colleagues in the operations (sales and delivery) understand and engage, as there is no compelling context to understand the importance of the new services and solutions, let alone be engaged.
Top-down P&L thinking
Too often, we see that developing and launching innovations, such as new advanced services and data-driven solutions, stagnate because of the decision-making habits in an organisation. Typically, we see one or more of the following:
The strategic intent from senior leadership is unclear, hardly based on a well-developed shared concern, not giving a clear path on what services and solutions to develop, nor on what the strategic priorities and objectives are, to be successful. So, employees are not really enticed to take action and therefore no change.
The strategies and plans are more short-term which emphasise short term financial objectives, leading to two different scenarios:
Financial objectives are not articulating the need for services and data-driven solutions, nor specifying which portion of these objectives should come from services and data-driven solutions. Often, employees are actually motivated to stay away from developing and launching the new services and data-driven solutions.
Or, in case the financial objectives also assign financial objectives coming from services and data-driven solutions, there is a lack of description of qualitative objectives and strategic priorities on how to arrive at those financial goals. The result is often a lack of initiatives and progress, or lack of alignment and results.
Top-down strategies from senior leadership are so specific and instructive that these actually dismiss other employees taking ownership of the plans, and/or adjusting plans and local strategies where needed.
Paralysis by control
Top-down control mechanisms from the last few decades are a huge obstacle for fluid and energising change in an organisation and therefore hinder the initiatives like monetising services and data. More specifically, we often see the following patterns;
Internal conflict of interest in the product sales teams, because they are often incentivised on sales volume.
It does not make sense for them to sell complicated service contracts. It hardly affects their commission, consumes a lot of time and may even put their product sales deals at risk. Instead, it is more beneficial to please their clients by offering discounted services.
In case there is a separate service sales team, for the same reason, there are often internal arguments on who owns the client and what is the best plan forward with each client. In the worst case, this even leads to having different faces towards the clients, leaving them confused and with a bad customer experience.
Control mechanisms that are too strict create an unsafe environment in which employees show defensive and risk-avoiding behaviour. Instead of trying, learning and being successful in monetising new services and data-driven solutions, they instead become complacent and resistant.
Typical signs are pointing fingers to other teams to take action, declaring that the new services and solutions are not the core business, that customers don’t want to pay and referring to other companies who have tried and failed.
Many things come into play when increasing momentum for monetizing (new) services and data, and preventing existence of too many obstacles and resistance. In general, the more adaptive and fluid change in a business, the easier a specific innovation on service and data.
We have seen that leading manufacturers have adopted 4 winning habits which sets them apart. These winning habits define how both operation and innovation is lead. In the next paragraphs I will describe the 4 winning habits in relation to monetising services and data.
"People in manufacturing are often biased towards products, equipment and technology..."
Leading companies have a transformative vision and mission on where the business is heading, what needs to change and develop, and why this is important considering the changes in the industry. This is a quite a holistic picture in which all stakeholders and entities in the business can relate and get direction on how to develop themselves, their teams, their department and their business unit.
It provides an outside-in picture on how the business is and will be relevant to a certain industry and customers. It explicitly points out how the business will add value to clients and that this requires certain technology, (data-driven) solutions and services.
Now imagine how the following mission statement will drive the development and implementation of new services and data-driven solutions: “Our purpose is to enable healthcare providers to increase value by empowering them on their journey towards expanding precision medicine, transforming care delivery and improving patient experience, all enabled by digitalizing healthcare.”
Here I want to focus on two phases on innovating your services and datadriven solutions: the development phase (including ideation, selection and design) and the implementation phase
For design purpose
In general, the envisioned services and data-driven solutions differ significantly from current business logic, mindset and operations in your business. Even though anyone in the organisation could raise great ideas, it is crucial that the development of the new services and solutions are done by dedicated teams with the right expertise and focus.
They need to ensure they are open-minded and unbounded by current (and old) business logic and pathways. In terms of discovery, this means they should:
Talk with other stakeholders in client organisations (rather than the ones your organisation normally speaks with) - for example, the CFO, CEO, VP, Innovation, commercial leaders, etc. Build a new expert-network outside the organisation - which is outside the current network of partners, suppliers and clients - including the academic experts and consultants in areas you usually have no relationships with and talk about topics other than current technology, products and service, and more about major trends, visions of the future industry,key challenges and strategies of different actors in your and adjacent industries.
This will not only help to obtain more ideas for future success, it will also help to change perspectives and business logic within the innovation teams and the rest of the organisation, by sharing these insights.
For implementation purpose
Once the new solutions and services have been designed and developed to a scalable offering, it probably needs to be embedded in the existing organisation. Now, the risks of resistance or complacency may come into play.
The more developed the mindsets and habits are on “digital” and change, the more fluid the implementation and change will be. This can be promoted massively by strong Discovery habits: Involving key players in the operating organisation, well in advance of the implementation, into the initiatives for launching new services and datadriven solutions - for example, by having a frequent dialogue on shared concern and discussing the alternatives to solve these concerns. This can be done by frequent conversations or including them in the extended innovation team.
Having everyone involved in discovery activities that do not require too much expertise and dedication, for example, by having colleagues; Have broader conversations in their day-to-day conversations with clients, suppliers and partners. You can provide them with topics and questions to help open the conversations
Joining events with customers where you discuss trends, visions, needs and how they see your added value. Join conferences within your own industry and even other industries and sharing new insights and learning points from the expert teams, painting a picture of what is going on in the outside world, how this may impact your business and how this will/could be addressed.
In line with the mission, vision and direction leadership of leading manufacturers, have a clear strategic intent on:
Result objectives - for example, overall growth aspirations that new services and data-driven solutions are crucial and how much business is expected to come from these new services and solutions. Strategic objectives on which offerings and capabilities need to be developed.
Next, they have a clear (top-down) strategy which articulates crucial choices on how to achieve these objectives in a few phases. This should provide a common roadmap on which offerings to develop, how to sell them, to whom and by whom, how to organise marketing, sales and delivery, and which obstacles to overcome.
This strategy should address all stakeholders (including R&D, marketing, product-sales, service sales and service delivery) who have direct influence on implementation and success.
With this top-down strategy, still, a lot is left open on how to achieve the objectives. Local teams are empowered to develop their local roadmap and strategy, and to take full ownership of the local development, learning, capability development and execution. This will allow them to mitigate local strengths, weaknesses, opportunities, threats and market circumstances.
With a constructive and forward dialogue between individuals, teams and departments, issues are solved in a fundamental and sustainable manner, hence building capabilities to perform.
For monetising service and data, this means that: Ideally, services and data-driven solutions are being sold at point of sale (when equipment is sold) - maybe not the full package, but the entry level offering which will be the first step to the next level mature offerings. Commission structure of sales people needs to be designed in such a way that it promotes the right focus and behaviour.
I have seen quite a few examples where equipment sales people were quite successful in selling service contracts once the commission they would receive was tied to the sale of a service contract.
Sales people who sell advanced services and data-driven solutions need to have specific skills and background, which are not necessarily the same as skills required for selling the products and maintenance services. Most stateof-the art sales techniques such as Solution Selling, Challenger Selling or Value Selling, assume a fluid and educated dialogue on related business domains.
Often, these conversations should happen with other stakeholders at the client organisation, maybe at higher seniority levels. The different teams need to have the confidence and safe environment to learn and develop these skills and knowledge, and become fluent in these conversations and sales approaches.
Different teams in your organisation need to be “in the same boat” without conflicts of interest. We currently see more and more companies aligning targets and incentive schemes, in which common and shared objectives prevail above individual targets.
Full transparency in key performance indicators on progress and results is required, to have all stakeholders have the necessary insights to be able to take ownership and accountability and intervene when/where needed.
The leading manufacturers, ahead of the game, have built momentum for continuous and easy change from the inside, moving beyond “business-asusual”. Their teams are passionate and eager to perform, learn and pursue opportunities. Instead of resisting new ways of thinking about customer challenges, customer value and their business, they focus on customers and pursue opportunities to increase value.
Monetising services and data has become a logical part of their overall vision and strategy. They are better in solving bigger customer problems, better at articulating the value for customers and in removing obstacles for their clients to adopt the new solutions. As a result, they better differentiate themselves – in the eyes of their customers - from their competitors. They perform better and have more resources to keep innovating their business and hence grow in our disruptive world.
Boost your monetisation If you want to accelerate the monetisation of your (new) services and datadriven solutions, I would like to recommend:
• Review your business alongside common mistakes and suggested solutions, and add the discrepancies to your strategy;
• Download the scorecard How to Monetise Services and Data here;
• Book a Discovery Call with Jan van Veen;
• Join our upcoming Impulse Sessions on How to Monetise Service and Data. These are full day interactive meetings with like-minded peers during which we will exchange experience, insights and challenges.
Essence It’s not about making money from new services and data-driven solutions; it’s about being highly relevant and valuable to clients in a sustainable manner and empowering your people to do the same.
It goes without saying that if you deliver value for money, you also get money for value.
Jan Van Veen is Managing Director at MoreMomentum.
WorkWave has announced the appointment of David Giannetto as its new Chief Operation Officer.
The former Astea employee will be based in the company's New Jersey office and will be expected to bring his experience across SaaS and his knowledge of emerging technologies to WorkWave's customer experience and innovation strategy.
In a statement, WorkWave's CEO Marne Martin, said he was looking forward to Gianetto's arrival. “I am thrilled to welcome David to our leadership team," he said. "With more than 25 years of bottom-line responsibility growing business-oriented service and technology companies, his arrival will enable us to continue to grow as a company, while providing the service industry with best-in-class SaaS solutions. The insights and expertise he brings to the table will help further our position as the dominant SMB SaaS solution for the pest vertical and other service industries.”
Set against a backdrop of rolling Welsh countryside, this invitation only summit will see senior field service executives debate, discuss and divulge their successes and challenges in 2019.
Customer Service and Mindset
There can be no doubt that the traditional interpretation of Field Service is changing: a fundamental shift is being made to focus on service and its incorporation and development into existing, more product-centric, business models. Where once it was enough to rely on a stellar product, now competition is fierce and margins are being squeezed this is no longer the case. Where excellent service is being provided and taken for granted in everyday life, it makes sense that this is now being expected, if not demanded, within business transactions.
A new age is dawning and customers are continuing to ask how a product and company ‘adds value’. Engineers in the field have access to, and interactions with, potentially hundreds of contacts within a specific customer base. So it’s no surprise that those customers will come to associate a product’s ‘worth’ based on the dealings they have had with these field service representatives. As the American poet Maya Angelou is attributed to have said: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel”.
By 2020 customer experience is slated to overtake price and product as a key brand differentiator.
Women in Field Service and Brand
With this shift to customer centricity there must also be a shift in perception. Traditionally seen as male dominated, a career in field service has not attracted women. However, with service coming to the fore this situation is starting to change and the skills that women offer are becoming more vital than ever. The ‘soft skills’ required for customer service roles are often attributed to women, but it’s not a question of gender, the focus must be on what skills can be brought to the table as a whole and how these can be used to improve a company’s field service offering.
"Traditionally seen as male dominated, a career in field service has not attracted women..."
In order to ensure that quality talent is acquired and retained Field Service must also diversify so that the next generation of bright minds can see themselves working in this sector. If a certain demographic is only ever highlighted and portrayed then it is no wonder that it is presumed that this is all there is. As you would market a brand, the same must be done throughout Field Service. Why would you choose this career? What is there to offer? What is the long term career outlook?
In order to keep up with rising expectations it will require a massive change in mindset, starting at board level and moving downwards, to truly transform a company ethos. For some this will mean a transformation in culture that has formed over decades but must now be changed rapidly if they are not to be left behind by the competition. This will be easier said than done; as change is happening so fast it’s fundamentally hard to move quickly enough! However, as the old adage goes, ‘just because something is difficult, it doesn’t mean it isn’t worth doing’.
Alongside the cultural shift needed to meet customer expectations, Field Service is also being driven by digital. Gartner defines digitalisation as ‘the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.’ ‘Digitalisation’ and ‘digital transformation’ have become such buzz words in recent years that some have lost sight of not only what it means but what they are actually trying to do.
Digitalisation is a tool by which to achieve an end goal, not the goal itself. Gartner predicts that by 2020 10% of emergency field service work will be both triaged and scheduled by artificial intelligence. With AI assisting with everything from scheduling to predictive maintenance to using past data to make future plans.
The human element within Field Service is still very much relied on and future technologies and solutions will be there to support these interactions - to make life easier and more efficient, not to replace humans altogether.
People still want to do business with people and until the customer becomes more Terminator than terrestrial this will probably always be the case.
You can find out more more information about Field Service Connect UK 2019, including how to register here.
A panel debate on the best digital tools for achieving top-end service, strayed from shortlisting technologies and focused more on the end-user impact. Field Service News’ Deputy Editor Mark Glover attended the session – part of Field Service...
A panel debate on the best digital tools for achieving top-end service, strayed from shortlisting technologies and focused more on the end-user impact. Field Service News’ Deputy Editor Mark Glover attended the session – part of Field Service Europe 2018 – and saw discussion range from strategy to data, but always swinging back to the customer.
Among the many highlights from Field Service Europe, held in Amsterdam before Christmas, was a debate attempting to shortlist digital tools that can contribute to a world-class service process.
Panellists included Miguel Angel Hernanz, VP Head of Global Service Delivery Transformation at Phillips Healthcare; Karen Mehal, VP Field Service Lightning at Salesforce and David Nedohin, President at Scope Augmented Reality.
Chairing the debate, Field Service News’ Editor-in-Chief Kris Oldland began by defining world-class service and more specifically what it means to customers used to high-end service delivery from the likes of Uber and Amazon. “Service is no longer how we compete with our direct competitors,” he told delegates. “We’re now constantly at competition with the best service experiences customers have ever had. We’re now moving into a world where customer satisfaction is perhaps no longer the right phrase anymore.
"It has to be about customer experience and understanding what the experience is to the customer and working back from there. Only then can we really start thinking about what world class service is,” he posed.
Oldland put it to the panel that technology and digitisation in service should be perceived as “one continuous eco-system that compliments and feeds off one-another" rather than separate tools. Hernanz, who recently oversaw a large B2B and B2C contact center service transformation at Phillips Healthcare, was keen to set the focus on strategy and away from the tools. “The different tools are enablers," he said. You should first of all take a look at your strategy and secondly re-define your processes end-to-end, then use the different solutions or tools that are available in the market to make it happen.”
He continued: “The problem with digitisation and the variety of tools in the market is that you get overloaded with information; you find opportunities all over the place and you want it all and you want it now and that is a big mistake. “You should start doing a proof of concept. You try it, you learn, you correct and you scale up; if it is scalable. Or you dismiss it and you try something else” he urged.
Servicecloud’s Karen Mehal agreed: “If you don’t understand what your objective is, how do you know you’re getting there? she asked, going on to question the use of the term digitisation. “We digitised field service technicians with laptops 20 years ago, did we not? We gave them a laptop. That was digitisation."
It's a good point. The industry can be guilty of getting swept up in buzzwords without fully understanding what they mean, and more importantly how they can impact on customer service. “What’s the objective?” Mehal continued, “Is it around your customer? Is digitisation serving your customer? If it isn’t, it really should be. Or are you just taking your ERP and digitising it?
If the customer service is the end goal, then digital tools should be used to empower that process. Putting this theory to David Nedohin, the co-founder and president of an Augmented Reality company, Oldland asked how such a new and innovative technology such as Augmented Reality can cut through the excitement and intrigue to become a genuine ROI. “It’s about identifying what the problems are but to also make sure there are measurements to it,” Nehan explained. “For example, if you are currently sending out your field service team to help support your customer on a certain percentage of problems, what is that costing you right now? And if you could implement a technology that could help reduce a certain percentage of those, then what is the actual cost savings?
“If they don’t have those numbers, we work with them to find out what those numbers are so there’s a business case that can be presented to management,” he says, before adding: “It’s a strategy they need to put together to understand exactly why they’re solving that problem. You have to start with the problem, you have to start with the use-case.”
Concurring, Oldland suggested that technology should underpin a wider business plan of evolution. “Digitisation is not a one-off process,” he said. “In a sense, we’re talking about a continuous improvement journey, it’s just that the tools behind that evolve too.”
“I see a lot of people get lost in that,” offered Mehan, who by her own admission is customer-facing, “They get lost in the shiny object, such as Augmented Reality. But if your strategy is around customer support, better customer service, wouldn’t it be better to use digitisation to look at someone’s asset now and fix it now, rather than scheduling someone to go out there and fix it?
“Our world is no longer traditional. We’re not in a traditional world, we’re not in a traditional software world, we’re not in a traditional field service world. We should not be bound by EAPs or by software. We should by bound by what serves out the customer,” she argued. “My questions are: are you doing that with your digitisation. Are you really taking care of the customer when you’re doing your strategy?” She said.
Philips’ Hernanz admitted working in large organisations ,where many different stakeholders have many ideas can be difficult. However, all these opinions come second to that of the most important stakeholder: the customer. “You need to put the customer at the centre and listen to them,” he said. “This is very important. You must find out what they need and then start building solutions which are suitable for today, but also for the future because the whole process is also an evolution.”
"We're not in a traditional software world, we're not in a traditional field service world..." (Mehal)
One digital tool that has made a significant impression on this process is data and, in particular, big data. Filtering the most useful information remains the challenge, given the reams of information that smart assets churn out. “There’s no point in having data if it’s not providing the right insight,” Oldland said to the panel, all of whom agreed and acknowledged all the customer cares about is fixing what needs fixing.
Referencing a client who made industrial cooking equipment for fast food restaurants including Burger King and Macdonald’s, Mehner told the audience that when their client's equipment – such as a bun toaster – produced a fault the restaurant would call out a contract worker ill-equipped to isolate and solve the issue. “This piece of equipment,” Nedohin explained, “now has 20 or 30 tickets associated with it because the technician doesn’t know how to diagnose the problem, let alone fix it. The message is clear: we need to find a better way of fixing the assets.”
The restaurant now uses remote support tools to directly contact the manufacturer, who can identify the model, the fault, diagnose the problem and send the right technician with the correct parts and asset knowledge “There is data with this such as preventative maintenance,” Nedohin said. “But the customer doesn’t care, all they care about is getting the equipment working. That data is important to somebody and that somebody is in the manufacturer's office. “The person at the end just needs to know what to do,” he concluded, summing up a key take away from the debate.
Enlightened delegates left the session without a list of digital tools but an idea of what to do before you choose them. Data collection, Augmented reality can all complement a process, but without a strategy that also encompasses your customer’s needs, those tools may as well be blunt.
2018 saw continued merger and acquisition activity in the home healthcare and related markets as firms moved to build out their services footprint, offerings and build economies of scale.
And 2019 appears to be trending in the same direction. However, it is quite possible that many providers that have a mobile team delivering care in the field fail to understand the complexity that comes with size and multiple service offerings, especially as it relates to scheduling ever growing teams in the field.
Many organizations do not understand that as the number of appointments increase, the scheduling complexity does not increase linearly. In fact, it is not even close! The reason complexity does not increase in a linear manner is due to the fact that each scheduling decision has a factorial growth. For example, here are the number of scheduling possibilities for various jobs:
• There are 6 possible schedules for 3 jobs and 3 nurses;
• There are 720 possible schedules for 6 jobs and 6 nurses;
• There are 3,682,800 possible schedules for 10 jobs and 10 nurses.
This is why it is important that healthcare providers utilize scheduling software that can handle such complexities. Scheduling optimization technology, found in Field Service Management (FSM) software, enables organizations to create detailed schedules that can handle the complex scenarios detailed above.
Optimizing the schedule for an organization with hundreds to thousands of nurses and care providers is far beyond the capability of simplistic scheduling products (not to mention manual approaches). The complexity is due to the number of events that must be taken into account when developing a schedule such as travel distance, travel time, overtime costs, labor costs, employee availability and skills, patient or member availability and preferences, contractor availability, regulations and a myriad of other inputs. With FSM schedule optimization, an organization can create an optimal schedule that meets unique business rules that can:
• Minimize associated costs related to care delivery such as travel time, overtime and missed appointments;
• Meet patient and regulatory requirements by assigning only the person with the correct skill set for the visit.
An emerging trend in the home healthcare space is providers offering new services that deliver specialized, hospital-level care. For example, one program provides a 7 day a week offering that promises a 2-hour response to a patient call. While the benefits to the patient are great, the potential strain on the organization that has to schedule these appointments could prove to be difficult.
"As healthcare organizations scale, they need to invest in technologies like FSM software..."
The organization will need to estimate capacity, understand who can make the appointment (taking into account travel time and other business objectives) and who has the correct skill set to deliver care. These variables highlight the need for schedule optimization (and capacity planning) to calculate all of these variables to help deliver cost effective and safe care while delivering on their promise.
Schedule optimization provides real, tangible business results for organizations. The approach organizations take to optimize scheduling and appointment booking often depends on unique business policy and goals. Some healthcare organizations might prioritize on time arrivals or decreasing overtime, while others might prioritize a reduction in travel time. With schedule optimization software, organizations can define business goals and quality metrics, then tune the scheduling policy to comply with these variables. For example, let’s look at an organization that prioritizes on-time arrivals as a key business KPI. You have two customers who live on opposite ends of town and there’s only one nurse available in the area that is certified to deliver care. How can this organization meet the patient and regulatory requirements while maintaining business policy?
If that nurse runs into unexpected traffic, or the previous appointment runs over, he might arrive late to the next visit. With schedule optimization, the scheduler can recognize the possible conflict and assign the appointments with enough buffer to ensure an on-time arrival, meeting that business objective and satisfying a patient need.
FSM software provides advanced schedule optimization that enable a healthcare provider to schedule and manage hundreds to thousands of patient appointments. Not only does this help control costs with better routing and a reduction in overtime, it also helps to deliver a better experience for both the patient and the employee. For example, extended travel times can increase turnover among caregivers. In fact, a study that found that for every 15-mile increment that an employee must travel to a client, that provider becomes two times more likely to leave the organization. In an industry that is struggling to find and keep talent, improving travel time can be a great employee retention tool.
As healthcare organizations scale, they need to invest in technologies like FSM software that will help enable this growth in order to cost effectively improve operations and, most importantly, ensure that patient care does not suffer.
Paul Whitelam is VP Product Marketing at ClickSoftware.
In the latest Field Service Podcast, Nick Frank, Co-Founder and Managing Partner at Si2 Partners of Field Nation, discusses the ethos behind The Service Community, a knowledge-sharing, independent service members' group and looks forward to the...
In the latest Field Service Podcast, Nick Frank, Co-Founder and Managing Partner at Si2 Partners of Field Nation, discusses the ethos behind The Service Community, a knowledge-sharing, independent service members' group and looks forward to the organisation's next gathering taking place at Renishaw's HQ in Gloucestershire, UK.
In this episode, Field Service News Deputy Editor Mark Glover, speaks to one of the spearheads behind The Service Community, Nick Frank, who explains the origins of the group's and explains its future goals. Nick also shares some of the challenges that members are highlighting in the service sector and tells us what delegates can expect at the association's next gathering taking place at the beginning of April.
You can find out more information about The Service Community here and sign-up for the group's forthcoming event at Renishaw's HQ in Gloucestershire on 2 April here.
Proactive Service® is a term I use to describe the proactive efforts by field service personnel to promote their company’s products in services to help their customers achieve their business goals. It is an excellent way to differentiate your service and stand out in today’s ultra-competitive environment.
If you encourage your field service team to look for opportunities to promote your services, here are seven questions to ask yourself to help you ensure that you are getting the most from your efforts.
1. Is opportunity identification part of your service deliverable?
This is the most important question and is the biggest determinate of overall success. When the subject of field service personnel promoting services comes up, it is often viewed as a selling activity that is in addition to regular service work. This is unfortunate since when our field team take steps to uncover opportunities that they feel will benefit the customer in some way, they are providing a valuable service – a service as valuable as their ability to maintain the equipment in top running condition.
As a service, the act of finding new opportunities is not an “add-on” activity for the field team to do “while they are there”, but an integral part of the field service person’s expected service deliverable. Our field teams have an obligation to bring forward ideas that will help the customer achieve results they may not have thought possible. When we take this perspective, it becomes easier to win enthusiastic support from our team of field service professionals. From this perspective, it is also easier for us to recognize the importance of implementing specific tools and processes to formalize this “opportunity identification” role. (See Question 4 below).
How well do you integrate business development by your field team as part of your service to your customers?
2. Do your technicians recognize the valuable service they provide by making recommendations to help their customers be more successful?
Many of the service professionals that I have met do not see their role as a salesperson. They tend to leave sales activities to the people with the expense accounts and fancy cars. What these service professionals fail to see is that, with a service perspective, we are not asking them to sell at all.
By identifying and speaking with the customer about the actions that the customer can take that will help them improve operational performance, reduce costs, improve tenant satisfaction, etc. is a valuable part of the service.
This is important because, it will be difficult to get enthusiastic engagement from your team if they don’t see their proactive business development efforts as part of the service that they provide. They may give it lip service, but it is unlikely that they will put their hearts into the effort.
How about your service team? What do they think of your expectation for them to promote your services? Do they talk as if their efforts are a sale or a service?
3. Do you “talk the walk”?
Language is important. Your team will scrutinize what you say in an effort to understand what you mean. For example, if you tell everyone that their proactive efforts is a service but you talk about it as if it is a sale, then they will think that your service idea was just for show. Or if you reward individual team members for their “sales” efforts but do not put emphasis on the “service” they have provided to the customer, your words will not be consistent with your purpose.
How about you? How do you describe the proactive efforts of your field team? How well do you talk the walk?
"Many of the service professionals that I have met do not see their role as a salesperson..."
4. Do your processes support your business development strategy?
There are implications from this approach on the processes used to support business development activities by technicians in the field. Because lead handling becomes just as important as lead generation, the successful firm will have to ensure that they have a failsafe process for handling leads from the field and following up on them in a timely manner.
What processes do you have in place to help the field service professional uncover opportunities? What questions do you require them to ask when they arrive on sight that might reveal problems that you can address? What steps can they take before leaving?
Think about your processes around the proactive efforts of your team. Are they consistent in quality and scope with the processes and systems you have in place to support the other services you provide?
5. Does your field service team have the skills and knowledge to deliver on the strategy?
Skills development is an integral part of the strategy. Service technicians will have to become as good at interpersonal skills as they are with their technical ones. They will need to be comfortable in speaking with the customer about their ideas and the benefits of taking action. Service management will need to be skilled at coaching and in opportunity management. Training on these interpersonal and communication skills will drive improved learning and skills adoption.
Knowledge is also critical. How well does your team know about the various products and services you offer and how they benefit your customers? You might be surprised by the answer. In my experience, there are gaps in the field team’s knowledge about their company’s capabilities. If the field service person doesn’t know of a product or service or if they do not know enough about it to engage the customer in a high level conversation about it, they will not bring it up to the customer.
What about your team? Do you ensure they have at least a conversational knowledge about all of the ways you can help your customers?
6. Do you tell your customers what you are doing? If you were to add a new service to your portfolio, would you tell your customers about it? Of course you would. So, if your field team is providing an exceptional service by using their knowledge and expertise to identify ways to help your customers be more successful why not tell your customers?
We should tell our customers this, just like we would tell them about any other service that we offer that would benefit them. Perhaps the conversation might look like this:
“We have encouraged our field service team to use their knowledge and expertise to identify opportunities to help you achieve your business goals. If they identify an opportunity that will benefit your business, would you have any objection if they bring their ideas to your attention?”
Do your customers know what your field team is doing through their proactive efforts and how it benefits them?
7. Do you measure the effectiveness of your efforts beyond revenues? If you engage your field service team in the promotion of your products and services, chances are you measure the increase in revenues. What additional business have we won that can be attributed to the efforts of the field team? But, if these proactive efforts are a service, shouldn’t we expect more results than simply improved sales?
What about customer satisfaction and retention? If a customer sees value in the proactive efforts of our team, should we not expect to see improvements in these areas? How about the amount of unplanned emergency work as a percentage of the contract base? If we take proactive steps to help our customers avoid unexpected failures, would it be reasonable to expect to see a change in the relationship between unplanned and planned work? And what about our customers’ level of satisfaction with the proactive efforts of our field team? Are they comfortable with their proactive efforts?
When it comes to assessing the impact of the proactive efforts of your field service team, what do you measure? What do you manage?
There is a tremendous opportunity to differentiate our service from our competitors through the proactive efforts of our field service professionals but unfortunately, despite our best efforts, we may not be achieving the results we had hoped when we embarked on the initiative – either for ourselves or for our customers.
Asking questions to help us reflect on our efforts may give us some insight to improve our effectiveness and further increase the level of service we are providing our customers.
Jim Baston is President of the BBA Consulting Group Inc.
Research by cyber-security provider F-Secure has shown that cyber attacks in 2018 increased by 32% compared to the previous year.
The survey consulted 3350 IT decision-makers, influencers and managers from 12 countries also highlighted a lack of awareness in detecting incidents, suggesting firm's preventative measures such as firewalls were insufficient.
Findings also revealed that the Finance and ICT sectors were most commonly targeted by attackers while healthcare and manufacturing received fewest, with the majority of attacks affecting US-based IP addresses.
Leszek Tasiemski said today's cyber-attacks had evolved significantly and questioned whether or not companies were even aware of the issue. "Today's threats are completely different from ten or even five years ago," he said. "Preventative measures and strategies won't stop everything anymore, so I've no doubt that many of the companies surveyed don't have a full picture of what's going in with their security."
You can read the full report here.