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Michael Blumberg, President of Blumberg Advisory Group and founder of fieldserviceinsights.com discusses some of the most crucial mistakes field service companies can make when utilising contingent or seasonal labour...

Field Service Organizations (FSOs) in North America, UK, and Europe are increasingly turning toward crowdsourcing platforms and subcontractors to augment their field workforce.

This type of outsourcing strategy enables FSOs to become more agile in meeting customer demands for service. As a result, they [FSOs] are able to reduce costs and improve service productivity. In addition, crowdsourcing and contingent labour helps solve the problem of finding skilled labour on a rapid basis.

Turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force.However, turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force. Naturally, questions emerge about the reliability, expertise, and quality of technicians that are sourced through these options.

Over the last two years, we have spoken with dozens of companies who have or currently utilize contingent labour to either augment their existing workforce or gain greater agility and efficiency over the entire field service delivery process. The majority are satisfied with their external providers and report positive results on key performance metrics such as First Time Fix and SLA Compliance/Onsite Arrive Time.   On the other hand, a few anomalies exist where the performance of contingent labour did not meet the FSOs expectations.

Quite often, FSOs who experience subpar performance make critical mistakes when retaining and managing contingent labour.

Here is our perspective on the biggest mistakes they need to avoid:

1. Failure to fully vet individual technicians doing the work

Don’t assume that every contract technician (e.g., subcontractor, freelance, crowdsource) you dispatch has the skills, training, and experience necessary to complete the work properly and in a timely manner. Insist on viewing background checks, certifications, and credentials of every contract technician assigned to your company.

2. Failure to train and onboard technicians

Quite often companies issue work orders without to contract technicians without training or guiding them on how they'd like the work to be performed.

For example, they do not explain how they'd like the tech to greet the customer and/or notify the customer when the work is complete.  Fortunately, Internet-based learning systems make it possible for companies to train and onboard contractors in a cost-effective and rapid manner.

3. Failure to communicate with contractors

This is the biggest mistake that a company can make is hand off work orders as if they were tossing a hot potato over a fence.

This will result in problem with respect to key service performance metrics such as SLA compliance, First Time Fix, and No Fault Found.  It is important that companies provide contractors with detailed and specific instructions about the activities they need to perform on each assignment.

At the same time, contractors also need to communicate with the companies that hire them on the status of calls, issues or problems they are experiencing, and results of their actions.

4. Failure to integrate contract or crowdsourced technicians into their service delivery process

Problems can occur when there is too much of an arm’s less relationship between the company and the contractor.  In other words, there is little accountability, visibility, and control between the company and contractors/technicians, and vice versa.

The key to success lies in treating contractors as an extension of your company.  Companies can achieve this outcome by leveraging communication technology, collaboration tools, and workforce automation software.  Relying on these systems will ensure the company achieves best in class service performance through its contractor network.

In summary, FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labour. This does not necessarily mean that they must make huge capital investments.

FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labourRather, they are urged to design and implement processes and procedures by leveraging existing infrastructure when they can.

Devoting the time and effort to this initiative will pay off. Our research suggests that FSOs who have an unpleasant experience with contingent labour do so because they rush into the decision without much thought, planning, and preparation.

Basically, they are looking to solve an immediate problem with no consideration to future. In other words, they are taking a tactical approach to labour shortages where a strategic solution is required.

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Getronics, the global ICT services group, has maintained market-leading customer satisfaction ratings in the last twelve months, according to the Whitelane 2018 UK IT Outsourcing Study.

A selection of Getronics’ UK outsourcing customers were surveyed, yielding a general satisfaction rating of 79% (10% higher than the industry average of 69%) and, as a result, a top three ranking out of 31 service providers.  This demonstrates the consistency of the group’s performance, having maintained a top-four position in this survey for the last four consecutive years, with no dissatisfied customers.

In Whitelane’s study, Getronics was evaluated on two of four types of outsourcing contracts:

• ‘end-user services and collaboration solutions’, ranking 1st overall and
• ‘data centre, managed infrastructure and hosting’, ranking 4th overall

Chairman and Group CEO of Getronics, Nana Baffour, said: “Our performance over the past four years shows that we have earned our reputation as a people-centric business, by focusing on adaptability, resilience and proactivity to deliver an exceptional user experience.  This continued success is not just in the UK, but across Europe and is reflected in other Whitelane research success, for example, in Belgium. We are doing all the right things to maintain our reputation, and we work hard to keep doing those things to delight all our customers, year in, year out.”

The survey indicates a small decline in the rate of growth of IT outsourcing in the UK: 27% of UK organizations expect to outsource more in the next two years (down from 35% in 2017).

The survey suggests that the top five objectives for organisations that are outsourcing their IT services are, in order of importance:

• cost reduction (68%)
• access to resources (57%)
• improvements to service quality (48%)
• innovation (44%)
• enable focus on core business (42%)

The independent study was conducted by Whitelane in cooperation with PA Consulting.  More than 240 CIOs, CFOs or their direct reports from the top IT spending organisations in the United Kingdom were surveyed, evaluating over 760 unique IT outsourcing relationships.  This resulted in the evaluation and ranking of 31 service providers.

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Andrew Bolivar, Senior Consultant at Ultra Consultants explores how a firm understanding of Best-Practices can help field service companies increase efficiencies...

Effectively managing service technicians in the field has always presented a challenge for companies offering on-site customer service. The complexity of efficiently delivering those services has been a recurring problem, but technology and an enlightened approach to business process improvement provide the enterprise with a solution.

Modern technologies that streamline the management of field operations transform processes for employees as well as customers and key stakeholders.

However, it’s not merely embracing new technology that will enable the enterprise to optimize its field service operations; it also requires a comprehensive analysis of existing business processes and a strategic plan to create the desired future state of operations.

The Traditional Perspective

Field service was traditionally considered an extra, post-sales service, often operated as a low priority cost center with limited potential for expanding business. In today’s competitive marketplace, many companies differentiate themselves by providing additional services that wrap-around traditional product offerings.

Legacy field service management (FSM) solutions frequently lack a comprehensive suite of services. Many companies have cobbled together different solutions to secure all the functionality needed to operate efficiently.

Field service management has evolved into an essential tool which provides tremendous value in generating additional revenue from new and repeat business from existing customers.

Today’s Approach Leverages Technology and Improved Business Processes:

The introduction of field service mobile apps, GPS navigation and email alerts has ushered in a new era for field service. It has become a high priority standard and is a key differentiator when it comes to effective business operations and ongoing customer relationships.

An end-to-end FSM solution may include scheduling and routing optimization, vehicle location, driver logs and hours-of-service tracking, inventory management, field worker management and other benefits like reporting and analytics.  All combine to provide a comprehensive view of the asset’s service history throughout its lifecycle.

Current FSM solutions make it possible to maintain a 360-degree view of customer sites, equipment and service coverage. Time between call receipts and job assignments can be shortened. You can be assured that the right technician, with the right tools, and the right skills and certifications, will arrive at the right time and complete the required service without delay.

Automated Business Processes Provide Improvements in Four Key Areas:

Here are ways that an automated FSM solution can improve business results

1. Improved performance:

• Tracking the root causes of field service requests can drive better quality analysis and identify product design and/or business process improvements.
• An integrated field service management system can provide visibility of new installations or sales and ensure continuous contact with customers at critical phases of their engagement with the company.
• A full view of an asset's lifecycle helps ensure proactive service and warranty management calls

2. Increased productivity:

• Mobile field service applications optimize travel and scheduling for field technicians.
• Integrated warranty management and cost tracking eliminates wasted time and reduces receivables collection time.
• Visibility into your customer’s equipment and service history allow you to plan your inventory and tool requirements sooner – avoiding costly delays and downtime

3. Reduced costs:

• Real-time resource scheduling ensures quick response to customer calls and reduces the cost of idle time between on-site customer visits.
• Integrated, real-time service information reduces the waste in non-productive activities, improves service planning and reduces the need and cost for excess inventory allocated to repair.

4. Improved customer satisfaction

• Faster response time to customer calls and requests not only improves relationships with customers, but also enables opportunities to develop add-on and repeat business.
• Mobile applications and GPS enablement allow companies to alert customers of expected arrival times and access to data via mobile devices ensures field service personnel can be better prepared for each engagement.

Growth is Strong, with North American Market Leading the Way

The field service management market has been estimated to exceed $3.5 billion by 2019 with North America predicted to be the largest market size. Stratistics MRC expects FSM to reach nearly $4.5 billion by 2022 with a CAGR of 16.5 percent. Enhanced customer satisfaction and reducing operational costs are driving market growth while the emerging Internet of Things (IoT) provides ample additional opportunities.

Optimized Field Service Management Offers Huge Opportunity

Customers are increasingly expecting efficiency in field service – and are willing to pay a premium for it.

Leveraging the potential of field service automation with a proper analysis and deployment of appropriate business process improvements can increase the efficiency and productivity of field personnel, reduce costs and improve customer satisfaction.

Companies sticking with legacy systems that don’t optimize field service operations may find their customers increasingly seeking companies that leverage technology to better deliver customer service.

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Two decades ago high tech companies blazed a new trail that saw them move away from the traditional transactional relationships they had with their customers as they embraced service as a route to sustainable and predictable revenue.

Other industries including the copier, medical and discrete manufacturing sectors have since followed suit and the evolutionary path to becoming a service led business is now clear explains Hilbrand Rustema, Managing Director, Noventum Service Management...

Twenty years ago, high tech companies such as IBM and HP were product driven organisations that sold hardware with a product warranty service.

Their products such as PC’s and servers were often mission-critical and too complex for customers to repair themselves. Once the warranty expired, customers had to pay for spare parts and on-site field service, also known as “Time and Materials”. These high-tech companies discovered that the service business was an interesting high margins and high growth business.

They adopted a new strategy to start focusing more on the Service Business. They created a new core service business with its own profit & loss statements, with dedicated senior managers at board level.They adopted a new strategy to start focusing more on the Service Business. They created a new core service business with its own profit & loss statements, with dedicated senior managers at board level.

Their customers then discovered that rather than buying services when you have a problem, it was cheaper and less disruptive to purchase preventive maintenance services.

Eventually the high-tech companies found out that to have predictable and profitable revenue it was necessary to create services that would guarantee a certain availability of the product This was the start of a category of services called “Availability Services” and the start of “Service Level Agreements” as a business model that closely resembles that of the insurance industry when it defines a price for the service based on the risks and value as perceived by customers.

Following the high-tech industry, other industries followed a similar evolution, for example:

• The copier industry with companies such as Xerox and Canon, now evolved into document management solutions;
• The Medical equipment companies such as Philips Healthcare,  Siemens Healthcare and GE Healthcare that can now offer entire “Managed Hospital Services”
• Discrete manufacturing where machine manufacturers are now moving from reactive to preventive and predictive services using the Internet of Things technologies to accelerate the transformation towards more advanced services.

Since then these high-tech companies have converted themselves into full-service businesses that no longer sell only products and “Product Related Services”.

They have moved up higher in the value chain by offering “Customer Business Related Services” which we can bundle under the name Pro-Active Services.

The model below illustrates the typical evolution of a service business:

We see roughly three types of Customer Business Related Services:

1. Process Optimisation Services are the first typical types of services whereby process expertise is used, for example, in process advisory, process compliance services or benchmarking services. Most often, the service provider agrees upon a certain business outcome or deliverables such as an advisory report, a process compliance report or a business improvement result such as an agreed productivity improvement.
2. Business Optimisation Services address improvements in the business model of customers such as “Pay per Use” models where the technology provider also provides the financing of the technology, thereby offering the financial commitment to become an OPEX (Operational Expense) rather than a CAPEX (Capital Expenses) leaving the financing burden to the supplier who is often better able to manage the risks.
3. Business Transformation Services help customers to implement strategic changes. The expertise of the service provider includes the ability to manage change together with their customer. The ability of organisations to adapt fast enough to changing market conditions has become one of the most important drivers of success. Service providers may take over entire processes or functions and manage this with (Managed Service) or for (Business Process Outsourcing) their customer.

We see roughly four types of Product Related Services:

1. Warranty and Time & Materials Services: Service organisations typically start off offering warranty services to their products. After the warranty period, customers start to request additional services. When a service organisation responds to this request, they most likely offer time & material services.
2. Preventive maintenance: Preventive maintenance services aim to reduce the cost of time & material services. They can do so by planning ahead based on the product lifecycle and reducing the cost of delivery of services as they can be provided without urgencies.
3. Availability Services: The next step is when customers only look at when a product is available for use and consider the cost of unplanned downtime. The service provider guarantees a certain level of equipment uptime or response time. The customer will balance the perceived risk of downtime with the price they are willing to pay. The service contract or service level agreement (SLA) usually renews automatically every year and therefore generates predictable revenues for the service provider, and represents a predictable cost for the customer.

Once organisations start to look beyond the level of the product, they find out that they have a lot of knowledge to help their customers improve their processes and even their complete business.

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Jan Van Veen of moremomentum concludes his series of articles on the 4 Winning Habits of successful service organisations focusing on the fourth and final winning habit: Discovery...

Following our introductory article about the 4 Winning Habits in the previous publication of ‘Field Service News’, I will now elaborate on the fourth winning habit: Discovery.

Common mistake: Being blind-folded

Humankind by nature tends to be fairly blind-folded, by its strong focus on opportunities and threats in the short term and directly related to its current situation. Companies often enforce this behaviour by:

• Low adoption of the first three winning habits (Direction, Dialogue, Decision-making).
• Not allowing time and resources in discovery and innovation, focusing on the exploitation of the current business model.
• Detailed and top-down control of exact discovery topics and assignments.
• Leaving all discovery activities for dedicated and specialized teams close to the board.

The consequences are critical for the sustainable performance and business innovations we need to thrive in a disruptive world. We tend to:

• Overlook longer-term opportunities and issues and misinterpret the potential impact of these.
• Overlook the real issue behind symptoms and fight the symptoms instead.
• Limit our options for solving problems or pursuing new opportunities and get stuck.
• Encounter resistance when developing and implementing new solutions.

In the past we have seen many businesses missing the boat - and we still do.

Just imagine what would happen if:

• Nokia and Blackberry did recognise that maybe, business-users at some point could expect touch screens, apps, multi-media and full connectivity.
• Polaroid did consider that digital cameras would become affordable for consumers.
• Airliners did understand that low-cost airlines could become attractive to business travellers as well.

The solution: All employees discover the future with an open mind

Leading companies drive their ongoing success with a strong habit of continuously discovering new opportunities and challenges.

Their discovery habits outperform the lagging companies, by:

1. Bringing the outside in
2. Using many sources
3. Involving involve all employees and many external stakeholders.

1. Bringing the outside in:

Every company has an eye open to the outside. They investigate trends with customers, competitors and technology. However, many miss opportunities and trends as they tend to be too focussed on:

• Topics with an immediate impact on current performance, less on future performance.
• Current needs of their best clients and less on future needs or on other market segments.
• Actions of competitors, less on what they potentially could do in the future.
• Trends with clear signs and high probability, less on trends with less clarity or probability.
• What they know for sure, less what they do not know. After all, staff are being paid for what they know”, not for what they do not know.

Leading manufacturers bring the outside in through the following practices.

Explore beyond business as usual:

The key is to be looking for (potential) trends and changes which do not directly relate to the current business model and operations. These insights will help prepare the business well in advance and to be the first to benefit from the change.

Leading companies also address the following in their discovery habits:

Market:

• Current and future needs of market segments which they do not serve, particularly if they appear not to be so profitable at the moment.
• (Latent) needs of their current clients, beyond the needs which they fulfil with their current products and services.
• Current and potential future needs of the clients of their clients.

Competition:

• Changing visions and strategies of competitors, other actors in the value chain and potential new entrants into the industry.
• Trends in adjacent industries and industries like data, algorithm-driven industries.

New technology:

• Emerging technologies with a low rate of adoption and application, like big-data, augmented reality artificial intelligence and how these will impact their (future) clients.
• Obstacles which currently prevent rapid adoption of the new technology and how these obstacles could be solved in the future.
• Economics, social demographics, politics, natural resources, workforce etcetera.

Explore weak signals:

Many lagging companies make themselves vulnerable to disruption by disregarding the weak signals. They tend to assess emerging technologies on their current possibilities and threats. They often see many reasons the impact will not be that high, for example, because of poor performance, high cost and narrow practical applications.

Many lagging companies make themselves vulnerable to disruption by disregarding the weak signals.We tend to disregard the scenarios that these obstacles may disappear in the coming years and how the adoption of the emerging technology could accelerate rapidly.

Many disruptive changes take one or more decades of exponential development and growth. In the first phases, the change and its impact seems to be insignificant. However, at some point, it quite quickly becomes significant and in a few years becomes main-stream. For many, this change comes out of the blue and is totally unexpected.

Leading companies explicitly focus on the weak signals. They are the first to see changes accelerating and obstacles for adoption of new solutions being eliminated. At the right time, they assess if they are ready for the change and are the first to act on the new opportunities and challenges.

Thinking in scenarios:

It is a challenge to tell in advance which trends and changes will really become real and have an impact on our business and which trends will only be hype or just stall. I think it is key that we accept the fact that we do not know. The

challenge is not making sure you do know, but that we are prepared to sense and respond in time.

Leading companies continuously develop and maintain scenarios for potential trends, changes and alternative solutions to respond. They understand which signals to be on the lookout for.

2. Many sources 

Leading companies see their innovation and changes being fed from many different sources for in-depth and broad discovery.

Internal and external sources

People with different backgrounds and opinions add value to getting new insights and arriving at better decisions. The most successful companies actually include many internal resources, which traditionally the lagging companies tend to disregard, like:

• Employees from other cultures, with different values, views and experiences.
• Employees who have a lot of experience from other industries.
• Employees from specific departments like R&D, service, finance, compliance and employees at lower ranks.

Leading companies also activate a broader network of external sources, including those they hardly meet during daily business. They actively seek to exchange insights with:

• Peers from completely different industries.
• Clients of clients of clients.
• Peers from other companies serving the same value chain.
• Experts and academics from different domains.
• Other stakeholders of client-organisations, who are not talking about the products and services.

Experiments

Leading companies not only talk and think about potential challenges, opportunities and solutions. That would lead to paralysis by analysis. They also learn by doing by:

• Innovate and develop step-by-step, starting with a first minimal viable solution and running rapid cycles of learning, adjusting and taking the solution to the next level. These are the Lean Startup and Agile approaches.
• Doing experiments, where we learn from what could happen in certain circumstances with certain solutions. These provide new insights which can be included in further decision-making on the direction and timing of a solution.

Experiences and failures

Leading companies learn from the things they did which did not work. They rapidly adjust and find new ways. They emphasize that it’s all about the learning, not about the failure. Their employees are more open to trying new solutions and practices, discovering and pursuing new opportunities, also when the results are not yet certain.

More and more companies cultivate the belief that failure is an option.

More and more companies cultivate the belief that failure is an option.For example, they organise failure-celebration-sessions, where colleagues present a failure, what they learned from it and how they would adjust their approach.

Another approach is not to use the word “failure”, but “discovery” or similar.

Like Edison said: “I did not fail, I just discovered 10,000 things that do not work.” This seems to work better than only reframing “failure”, even more so in cultures where losing face is a major factor.

3. The power of everyone in some discovery-mode

The most dynamic businesses empower all employees to do research, explore and define new ideas to improve and innovate, not a small specialised team dedicated for this job.

Everyone Contributes

Everyone in the organisation owns part of innovation and change, whether it is about implementation or identifying new ways to improve. They all have and search for the necessary insights. They all read, talk with peers from other companies and clients, do experiments, visit conferences, do external training and conduct their discovery projects.

This engages them to own the ideas and the execution.

Exchange and share

However, they do not discover everything themselves. They also exchange insights, experiences, opportunities and challenges they have discovered, hence learning from their colleagues and having their colleagues learn from them. This happens through collaboration tools, meetings within and amongst project teams and other in company events.

Bottom-up and Top-down

Everyone, within boundaries, takes their own initiatives to explore certain topics. Some discovery assignments come from higher management levels. This way they are committed to the effort it takes and to the outcome the generate and their colleagues generate.

Benefits

These open and forward-looking discovery habits make an organisation much more adaptive to any new opportunities, challenges and solutions.

They shape a huge army of open-minded, engaged and change-oriented employees. This is mission-critical for any company that wants to thrive in a rapidly changing and complex world.

The Essence

It’s not about having smart analysts and experts creating smart intelligence.

It’s about having passionate and engaged employees learning and discovering and making great ideas work.

Want to know more? access our eBook: How to Thrive in a Disruptive World - an eBook of 42 pages about disruption, the 4 winning habits for momentum in continuous and rapid change and 3 case studies (including Mars Drinks and Volvo Penta) Field Service News subscriber can access the eBook @ http://fs-ne.ws/AcQf30jhl0S

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Mashed up by machine learning? Dumbfounded by data science? Agnostic about AI? Nick Frank, Managing Consultant, Si2 Partners doesn’t promise to the provide all the answers, but he can offer some crucial insight into the management process on turning your field service data into profits...

Recently I have been working with Data Scientist Eric Topham co-founder of The Data Analysis Bureau, to understand why many company leaders are struggling to turn data into profits. Eric solves data problems. He is the professional who will understand if it is a Data Science or a Data Analytics challenge and then deliver the appropriate math-based algorithms.

Data Science is about discovering new patterns in data in order to make predictions and take real-time action. The mathematical technologies used in this process are dynamic and self-learning, sometimes being grouped under the ‘Artificial Intelligence’ label. In Field Service, the types of data problems addressed by these technologies might include scheduling or predictive maintenance.

Data Analytics deals with historical and more ‘static’ data, where the desire is to test ideas or hypothesis, understand relationships and develop insights into historical patterns.Data Analytics deals with historical and more ‘static’ data, where the desire is to test ideas or hypothesis, understand relationships and develop insights into historical patterns. Here techniques such as statistical modelling, data mining and visualization are used to gain results. Common examples you might recognize are knowledge management or performance reporting.

Data problem solvers such as Eric will tell you that the hardest part of his job is not developing the data solution, it is defining the problem to be solved in terms of reducing costs or increasing revenues or hopefully both.

The companies who can to articulate their business problem in terms of money and performance, make it much easier for his team to create the mathematical models to answer the questions posed.

One of the ways of defining the business problem is to use value mapping tools, such as the Value Iceberg described in February’s issue of Field Service news “Don’t be caught in the Emperor’s new clothes. First focus on the customer”.

These help companies articulate not only the direct benefits to the customer, but more importantly the hidden value of their product or service, such as improved material through-put, lower energy costs or reduced risk.

A good example would be a manufacturer of air conditioning systems who targets facility managers for whom 30% of the building’s running costs is energy. This company targets their products and services to reduce their energy by 10%, enabling a very compelling sales argument.

However, the vast majority are far blander and generally fall into three broad categories:

[unordered_list style="bullet"]

• Bland USPers: Ask people about their value and they will trot out a predictable unique selling point(USP) such as 24/7 spare parts delivery. The question is do they know what this means to the customer and price accordingly.
• The Easy and Obvious: Many can tell you what their customers tell them, but not much more! Do you hear phrases such as. ‘My customer needs fast and right-first-time resolution!’. What does this really mean to the customer in terms of money and performance?
• Know, but cannot say: Then there is also a significant proportion who intuitively know their customers, but struggle to move themselves beyond the immediate need. They need help to articulate how they make their customers more profitable.

[/unordered_list]

If the key to monetizing the data is to never separate the business problem from the data problem, how should companies approach this challenge. Many lack the confidence to take the journey due to the intimidating jargon and fast pace of change.

This high-level roadmap is our attempt to demystify the process by breaking it down into 5 key common-sense steps:

[ordered_list style="decimal"]

1. Define the business problem: Whether it’s internal service operations or new services, a value mapping exercise such as the Value Iceberg is the essential start point. But do not just look at the customer. Look at the end to end industry supply chain and in particular the data hand-offs between the different actors in the supply chain. We discussed this more in our 2016 Field Service news article ‘ 5 patterns to discovering new data-driven service revenues’.
2. Solution and data needs: Identify the solutions you might offer, the critical data you need and how you will collect it. In their rush to create data services solutions, many companies jump to this step first without a clear view of the business problem. The result can be developing IoT platforms with no revenue stream or data they cannot analyse.
3. Define data problem: Formulate and scope the problem. Then scope and design the solution. Here matching internal capabilities matched with external expert partners is often the key to success.
4. Implement & evaluate: Start with a manageable pilot, revisit the business problem and ensure the solution is able to add the value you desire.
5. Scale Up: When successful, you are ready to scale up across your organization

[/ordered_list]

If data is particularly relevant to growing your field service business, then you can reach me @ nick.frank@si2partners.com

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Michael Blumberg, President, Blumberg Advisory Group and founder of Field Service Insights outlines how service organisations are overlooking the fundamental difference between a customer not seeing value in a service offering and a customer objecting to price and explains why understanding these are two very different things can open up a world of increased revenue streams...

Field Service Executives often face challenges when it comes to generating additional service revenue for their companies.

They often face resistance from customers as evidenced by low contract attachment rates. The natural tendency is to blame the price as the reasons why customers aren’t purchasing more services contracts.

After all, this is the feedback they received from their sales teams and from the customers.

Being logical and rational business people, field service executives try to solve the problem by lowering the price, after all, if the customer says that the price is too high, it must be the reason why they are not buying, right?

To quote, the popular song by George and Ira Gershwin, “It ain’t necessarily so!”. While price may be a factor in the purchase decision, seldom is price the only reason why customers don’t purchase service contracts.

In market research studies that I have conducted for clients in a wide array of technology service markets, I have found that price is often low on the list of criteria that end-users consider when selecting and evaluating service providers. Criteria such as quality of service, knowledge and skill of service personnel, breadth of service offering, and vendor’s knowledge of their business are perceived by customers to have higher importance than price alone.

The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract. The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract.

This is because they have no way of logically defending the value of the service being purchased. Stated another way; they are not able to differentiate the benefits of service contracts from time and materials service. The problem is that Field Service Organizations (FSOs) often attempt to sell service contracts without providing justification about why a service contract is better than simply paying for service on a time and materials basis.

A common saying among sales professionals is that customers buy emotionally and then defend their purchases logically. All too often, FSOs provide little emotional reason why a customer should purchase as service contract as opposed to T & M and even less logical supporting evidence about why a service contract is more valuable.

To achieve high attachment rates, FSOs must be able to articulate the value of their service offerings to customers as well as to their own salespeople. The value proposition must impact customers’ emotionally by addressing their fears, worries, doubts, and concerns about the impact of service or the lack thereof on their operations.

For example, fear of excessive equipment downtime, lost revenue, low machine utilization levels, or the possibility of quality defects. Of course, the FSO needs to provide logical supporting evidence why their service offering will eliminate these issues.

FSOs achieve this results by articulating, either through a sales conversation or marketing collateral, what’s included in a service contract that is not included in time & materials. This requires they do an effective job in defining the coverage, entitlements and resources available to the customer through a service contract.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They must be able to answer the customer primary question “What’s in it for me?”. If the only difference between a service contract and time & materials is that the customer can prepay for service, then there is no emotional value or logical contrast. However, if the service contract provides a preferred level of service (e.g., 4-hour response time, 99.9% uptime guarantee, 7 by 24-hour coverage, parts, etc.) or preferred price structure then the customer is presented with some real value and contrast.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They do this by offering more value in a service contract than the customer could possibly receive through time and materials services.

Of course, the best way win over customers is by being honest and letting them know exactly how service contracts enable you, the service provider, to provide a better level of service.

Fundamentally, FSOs can deliver better service to customers under contract.

This is because the contacts provide data about the installed base and service demand requirements. As a result, FSOS can anticipate service events and be more effective at planning and allocating service resources. This, in turn, makes it possible for FSOs to provide a guaranteed level of service to their customers.

Honesty is always the best policy especially when it is supported by a guaranty and exceptional service!

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Laurent Othacehe, CEO, Cognito iQ looks at why employee engagement is a critical pillar for achieving field service excellence and offers some crucial advice for field service companies seeking to how best to ensure they are getting the most out of their most important asset - their field service staff...

Field service is not just about IT and processes, nor is it just about parts and engineering. It is about people, this is why employee engagement is one of three fundamental aspects, alongside improving productivity and meeting customer expectations, that can lead to what we view at Cognito iQ as flawless field service.

If you want to know more about this topic there is a white paper available to fieldservicenews.com subscribers. Not a subscriber? If you are a field service professional you can apply for a complimentary industry practitioner subscription.

Click here to apply for your subscription and we'll send you a copy of the white paper Flawless Field Service: Employee Engagement as thanks for your application

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What is employee engagement?

So what do we mean by employee engagement?

If you Google it, you’ll get any number of definitions, but we like this one from not-for-profit organisation Engage for Success.

“Employee engagement is a workplace approach resulting in the right conditions for all members of an organisation to give their best each day, commit to their organisation’s goals and values and contribute to the organisational success, with an enhanced sense of their own well-being. Employee engagement is based on trust, integrity, two-way commitment and communication between an organisation and its members”.

It’s also important to say what employee engagement isn’t. It isn’t manipulative. It’s not a cynical attempt to wring productivity from employees with spurious benefits. It isn’t an annual employee engagement survey – although it can be measured - and it should only be measured if doing so leads to positive change.

This means that employee engagement must be win-win for employees and their employers. It can’t be imposed from above. It’s about creating a cultural shift in the way organisations behave.

Key drivers of employee engagement include the following:

• A culture of trust, fairness and respect for employees and management
• A culture of teamwork and co-operation
• Clarity on goals, constructive feedback and support to succeed
• Quality training and clear job progression
• Work-life balance and work that makes the most of people’s skills
• Empowerment, autonomy and a sense that people’s ideas are valued

Why employee engagement matters

In the UK, only around a third of employees are ‘engaged’. Engaged employees tend to be happy in their jobs, enthusiastic about their work, committed and driven.

This matters, not only for the wellbeing of the remaining two thirds of UK workers, but also because study after study has linked employee engagement to improved productivity, customer satisfaction, growth and profitability, as well as a whole raft of other business metrics, including employee retention; innovation; safety incidents; product quality and defects; shrinkage and theft; and sickness and absenteeism. And whilst engaged employees can bring business benefits, the reverse is also true.

A US study found that there are 51% of US workers who are not engaged, and a further 16% who can be defined as ‘actively disengaged’; whilst workers who are ‘not engaged’ tend to be indifferent – they are just showing up for their pay-check - those that are actively disengaged can be resentful and disruptive, taking up managers’ time, seeking out ways to ‘cheat the system’ and even sabotaging the work done by others.

Employee engagement in field service

1. The nature of the work:

Remote workers can feel isolated, which reduces engagement. It is important to ensure that they feel connected to the main office, and also feel part of a team, whether that is at a local or regional level, or by job specialisation.

Field service has traditionally been low-tech which has meant a lot of tedious paperwork – necessary but not as satisfying as helping customers and solving service issuesAs back-office management don’t always have good visibility of how work is actually done in the field, they might not understand how to empower and enable workers to do their jobs and may have created processes that are unhelpful or counter-productive.

In addition, field service has traditionally been low-tech which has meant a lot of tedious paperwork – necessary but not as satisfying as helping customers and solving service issues – so it is important to automate some of these admin tasks, as well as give workers electronic access to the information they need to do their jobs, such as product manuals and parts databases.

2. The nature of the workforce:

There is an ageing workforce, with the average age of the field service worker being 40 years old – and many of the older baby-boomer generation engineers are starting to retire.

To fill the skills gap in field service will mean both keeping older engineers on for the long haul by retraining and re-skilling them, as well as attracting and training new younger engineers. Engagement is essential here as it is costly to train up new workers only to have them job-hop to a competitor for a slightly better rate pay or better benefits.

3. The nature of the industry:

As products become commoditised, companies are relying on the quality of their service to differentiate from competitors. Field service workers are the face of the brand and often the only company representative that customers interact with. Engaged employees are more likely to give great customer service than disengaged employees.

The most forward-thinking companies are wise to the potential of field service workersThe most forward-thinking companies are wise to the potential of field service workers. They are considering ways to upsell other products and services during their visits and are turning field operations departments into profit centres. Technology is also changing the skills needed on the job. Connected devices are reducing some of the tasks that field workers need to do, such as routine maintenance checks, but they are creating new data, which means that workers will need analytical skills.

Technologies such as virtual or augmented reality are also changing the ways that workers carry out their tasks. Workers may see these new skill requirements as a threat – however, companies that are good at engaging their employees see these developments as opportunities to offer training, career progression and the satisfaction that comes from being part of an up-to-date and modern company.

If you want to know more about this topic there is a white paper available to fieldservicenews.com subscribers. Not a subscriber? If you are a field service professional you can apply for a complimentary industry practitioner subscription.

Click here to apply for your subscription and we'll send you a copy of the white paper Flawless Field Service: Employee Engagement as thanks for your application

To find out more about the many benefits of being a fieldservicenews.com subscriber and to understand how we store and may use your data please visit our subscriptions page here

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As we begin to enter the final articles in our serialisation of Jim Baston’s excellent industry focused book Beyond Great Service we conclude the section on seeking feedback - an area that has become increasingly important today as field service companies en masse are putting the customer at the heart of their entire service strategies...

Before rolling out the strategy of engaging technicians in business development, Charlie wanted to seek feedback from customers. Last time he spoke with Joe Costello of East Side Property Management. Joe’s response encouraged Charlie that he was on the right track. Joe offered a suggestion for the initiative.“Way back when I first got into the industry, I ran into a bit of trouble that cost me my job, and almost my career. I was assigned as the building manager for a condominium for Chelsea Property Management. It’s still there, and it was at least 25 years old then. You may know it—829 Becket Avenue?”

“Yeah, I know it. My sister and brother-in-law used to live there.”

“Okay, so you will know it’s a pretty prestigious building. I am not sure why I got it, since it probably should have gone to someone more senior. Management must have been desperate. Anyway, I got it. I was pretty cocky back then and had no fear, so I guess I thought that I deserved it. Here I  was just out of college and managing a big building. That was in December. The next spring, I guess it was April, the service technician suggested that I consider changing out the boiler. It seemed to be running fine, but it was as old as the building and parts were almost impossible to come by. It might have continued to operate fine through the next winter, but maybe not. That would’ve been the time to make the decision so that a new boiler could’ve been installed during the cooling system when there is no demand for hot
water for heating.”

I would suggest you encourage your technicians to set up an informal meeting every six months or so, for them to go over any outstanding proposals that have not been responded to. “I told the tech that I wanted to mull it over. I was nervous about bringing this up with the Board at this time, since we were working on a number of capital improvements including a new roof, repaving the parking lot and repairing the pool, and these were seriously depleting the reserve fund. I thought I would wait until the June Board meeting to mention it. By then, the approvals for the major expenditures would be behind us and we’d be thinking about getting things in order to prepare for winter.”

“Well, as I said, I had a lot of things on my mind and I forgot about the boiler altogether—until October, when the heating season was upon us. It was at that point I remembered the boiler, but it was too late. Fortunately, the start-up went fine and I thought I was in the clear. In January, however, the boiler
went down. As luck would have it, it was the coldest day of the year and the forecast was for at least a week, maybe two, of the same. To complicate matters, the parts that were needed were not readily available. It took the service company three days to find the parts and another two days to get them installed and the boiler back in service. We were without full heat for almost a week, and you can imagine the uproar from the unit owners. Some threatened to not pay their maintenance fees. Others wanted to change the building management company. It was absolutely crazy, and all because of my carelessness. When the dust settled, it came out that the service company had actually recommended changing out the boiler way back in the spring. For my company, that was the last straw. I was gone within a week.”

“At first I was bitter about the situation. It was an honest mistake, albeit a careless one, but not one that I thought I should’ve lost my job over. And, it could have been avoided. Had the technician reminded me that I had not made a decision on the boiler, or had he simply asked what my intentions were with regards to replacement, it would have saved my job. Was it his job to remind me? As I reflect on it now, I don’t think it was in the truest sense of the word. However, it would have provided a valuable service to me.”

“Anyway, the reason I am telling you this story is that I would suggest you encourage your technicians to set up an informal meeting every six months or so, for them to go over any outstanding proposals that have not been responded to. The customer can then tell them if they have decided against the idea or if they are waiting for budget approval. They might also thank the tech for reminding them that they have not attended to the issue. If it makes sense, your technician could also use this time to take the customer on a tour of the facility to showcase work and discuss new opportunities.”

Thinking about your business:

• Is your business development strategy clearly tied to your overall plan to provide each customer with an exceptional customer experience?
• Does everyone know what they are expected to do to delivery on the strategy?
• What hurdles stand in the way of fully engaging your field service team?
• Do you include steps like reviewing existing recommendations with customers to ensure important ideas are not lost?
• Have you sought feedback from your customers on your initiative?

Next time Charlie seeks summarizes the components of the strategy to engage technicians in business development. He calls this new service “Intelligent Service”.

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It’s been several years since the official end of the Great Recession and we finally see organizations beginning to switch from a cautionary mindset to one of business expansion. However, business and revenue expansion initiatives need to be built on an infrastructure of growth, an area where organizations haven’t invested significantly in the previous 5-10 years. The desire for growth needs to be matched with investments in knowledge, technology, and innovation.

Sumair Dutta, Chief Customer Officer, Service Council explains why he anticipates that the next twelve months will be a period when service leaders begin to transition into new revenue models.

The Voice of the Service Leader:

In The Service Council’s annual trends survey of 2017, service leaders indicated that their top initiatives were focused on the improvement of customer management, the enhancement of service operations with the aid of business data, and an expansion of knowledge management across the enterprise.

In discussions with service leaders, it seemed like most were looking to get closer to their customers via better voice of the customer and listening initiatives to truly understand what these customers valued. In several industries, we also noted that organizations were balancing the demands and needs of various customers within an organization.

2018 initiatives are similar to those planned for 2017 and we don’t see a major deviation for service leaders. The push is to continue to drive operational efficiencies and business capacity with the aid of data, information, and technology. In parallel, organizations are looking to continue to ramp up their customer experience initiatives. As these initiatives get more mature and move from the listening phase to the customer understanding phase, organizations are hoping to use customer insight and data to support revenue generation efforts.

In discussions with service leaders, it seemed like most were looking to get closer to their customers via better voice of the customer and listening initiatives to truly understand what these customers valued.Voice of the customer efforts have been popular for several years and were championed by those in business to consumer industries.

In serving a larger number of customers and customer transactions, it was essential for these organizations to get a pulse of customer sentiment tied to service transactions and business relationships. The effort from these organizations was to improve operations to support better loyalty and retention.

Some would argue that the intent of these organizations is now shifting to ensuring a greater use of purchased product and service features, akin to the customer success model.

In enterprises that work directly with other businesses, the volume of transactions and interactions might not be as large; nevertheless, these interactions can have a high degree of value or impact attached to them. Historically, organizations were happy to capture feedback from their customers, but customer listening wasn’t a prioritized activity.

That has changed; as over the last three years, we have seen more organizations invest in voice of the customer and customer surveying programs.

More so, service leaders have also sought after resources to map customer journeys and identify key pain points in the service delivery ecosystem.

These customer experience activities have led to a handful of initiatives that strive to assuage frustrated customers, increase visibility into the service process, and reduce the effort required to access the service organization.

We now believe that organizations are fairly well equipped to deal with direct customer feedback but now need to dive deeper to truly unearth customer value.

Deciphering value requires a deeper look at customer feedback. Customer complaints and outreach are typically a channel for customers to share their expressed wishes. Answering expressed needs and wishes is essential to maintaining customer satisfaction, but addressing unexpressed needs is the key to differentiation.

This requires the ability for service teams to dig deeper into the reasons for a customer contact and what that specific customer might be looking to accomplish with the delivered information.

Addressing constraint:

The delivery of improved experiences must occur in a constraint heavy environment. The biggest constraint faced by organizations is the capacity of the service workforce.

This capacity isn’t solely tied to the quantity of service tasks that must be met, but in the quality of service interactions that must be supported by service personnel. In organizations with field service groups, there is a major focus on replacing retiring service workers and in retaining and replicating their knowledge for future generations.

Several industries are having major issues tapping into the next generation of service workers. Yet service requests continue and customers require a higher level of service.

Technology might seem like the best answer to addressing capacity issues, but the real solution comes from a better understanding of available service data. This explains why service leaders are looking at their major sources of data to identify:

• Inefficient service delivery processes
• Opportunities for automation and elimination of manual intervention
• Opportunities for enhancement of service worker output and coverage

The data that is available at the service leader’s fingertips can come from multiple sources. It may come direct from the product being serviced, and this mode of data communication continues to gain traction. Yet reliable data is already available from:

• Customer requests, complaints, and claims
• Point-of-service systems tracking work completion and resources required

Once operational improvement opportunities are identified, it makes sense to inject technology solutions to address these opportunities.

For instance, portals can be created to offer customers an easier path to service information or to the creation of a service request as compared to a traditional 1-800 call queue.

Routing technology can be used to directly connect customers to higher-level technical support. Video solutions can allow for assisted service resolution or improved diagnosis prior to dispatch. And just-in-time content can be sent to technicians to ensure that their service visits are successful.

We would recommend that service leaders also analyze and review data tied to the customer experience as much as they use data to prioritize operational improvements.We would recommend that service leaders also analyze and review data tied to the customer experience as much as they use data to prioritize operational improvements.

If customers indicate that the ease of access to service personnel is a priority for them, or that other areas in the service delivery ecosystem need improvement, then these could help service leaders rank needed changes.

The growth plan:

Operational and customer-focused initiatives are being paired with those that focus on business and service revenue. In discussions around service’s impact on the business, TSC has previously highlighted two revenue buckets that are directly enhanced by service.

• Service-Impacted Revenue – Revenue generated as a result of positive customer satisfaction, typically tied to up-sells, cross-sells, renewals, new purchases, and referrals.
• Service Revenue – Revenue generated from the sale of service products such as service parts, time & material work, or service agreements.

In pursuing growth in 2018, service leaders continue to support the first bucket of revenue typically driven by other parts of the organization but are taking aim at enhancing their overall service revenue contribution.

This expansion is typically supported in two ways:

1. Understanding customer use of current service products
2. Uncovering appetite for new service products

For those organizations with service agreements in place, it’s essential to understand which customers are covered by these agreements and which ones are coming up for renewal. Better visibility into coverage and renewal opportunities can uncover millions in revenue opportunities.

Once visibility is established, it is essential to identify why customers chose to stay away from service agreements or other products. This might uncover awareness or sales opportunities for the service enterprise.

In addition to actual coverage and renewal, service organizations must understand how customers are utilizing products and services. Awareness of customer adoption and usage will allow for improved account management opportunities. It might also yield ideas for net new services that can be valuable to customers.

Summary/Conclusion: the need for service innovation

While organizations are navigating what it means to be a digital business, they are also looking to new collaboration models with their customers to ensure longer and more profitable relationships.

For organizations to be more innovative in service, an internal transformation needs to occur around business leadership, around business measurement, and around the technology in place to support a new service business.In innovation-focused research conducted by The Service Council in 2017, less than one-half of organizations highlighted that their service businesses received as much focus on innovation, as did the other parts of the business.

For organizations to be more innovative in service, an internal transformation needs to occur around business leadership, around business measurement, and around the technology in place to support a new service business.

Service leaders must develop and fuel a culture that welcomes and accepts new ways of doing business, even at the cost of cannibalizing existing revenue streams. The promise of innovation is ripe at service organizations; it’s now time for service leaders to execute on this promise.

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