Martin Summerhayes takes us back to the future as he looks at field service past, present and future...
As part of a recent field services news podcast, I was asked to comment on where service had come from over the past few years and where it was going in the future. Unfortunately, this was after the formal part of the interview, so I offered to write up my observations in a follow up article.
It has made me reflect on some of the changes that I have seen across a diverse and often rapidly changing market over the past few years. Before looking forward to the future, it is useful to reflect on what was suggested as key technology and business milestone of the past to see whether the hype translated into reality.
So, for just a moment, I’d like you to think back a few years. To 2014. Only five years ago, in fact.
You would think that was an age ago, and in some respects, it is, but, let’s see what were the highlights in 2014…
Back to 2014:
Some of the technology news headlines of that year included:- the first 8 terabyte hard drive was released by Seagate; Google released the 64-bit version of Chrome for Windows; Microsoft announced the launched of Windows 10 and Intel unveiled its first eight-core desktop processor, the Intel Core i7-5960X which were all heralded as recovery elements of the PC and server markets after a severe downturn in 2013 (1).
From a services perspective, it was pretty much business as usual. The cloud business model was still in its infancy, for instance Microsoft Azure had been launched in February 2010 and was slow to grow; software services were still mostly being transacted via the traditional contract model and from a field services perspective, whilst the market was considered mature in the UK, there was still growth, supporting the, leisure and hospitality sectors, whilst the traditional retail sector was starting to contract (2).
The biggest tech launch in September of that year was by Apple Inc. of the Apple Watch. This was touted as the future of wearables, the launch of connected health, fitness and wellbeing.
Today’s world is in flux:
Spin forward to today and the tech led Services world is in flux. A number of services business models are rapidly changing the tech and IT services landscapes, both globally and also in the UK.
Take for instance, Infrastructure services are being rapidly morphed into Hybrid Cloud IT services. The current growth rates in the traditional legacy infrastructure services are sub 2% CAGR, but the Hybrid Cloud services are growing exponentially by over 150% between 2018 & 2022 . Or Software services, where the drive over the past few years has been to move from a contract model to a subscription or even pay-as-you use model, with at market growth for Software-as-a-Service of 79% (from a recent Gartner report (3)).
From a PC, Notebook and Laptop perspective Windows 10 is the defacto standard (Windows 7 goes EOL at the end of the year). Android is the default mobile phone operating system (2017, Android overtook Microsoft Windows to become the most popular operating system for total Internet usage(4)).
Amazon Inc. has fundamentally changed the supply chain and logistics models whilst at the same time growing its business by 191% from 2014 to 2018 to $232.8billion (5), which includes a sizable Cloud business that it has grown over the past 15 years.
Let’s add to the flux mix, some serious technology launches (6):
- 2014: The launch of the Connected Car; Digital Health; Two-in-One laptops; The Smart Home and Wearables
- 2015: The Internet of Things – everything connected; Smart Appliances; Virtual Reality headsets and Drones. Oh, and Tesla announced self driving cars as a future market
- 2016: Smart Everything – lights, switches, thermostats and even sprinklers! And for the first time a recognised decline in Smart Phone innovation as the market matured
- 2017: Voice Controlled devices; Artificial Intelligence in devices; 5G telecoms
- 2018: Face Recognition; Companion Robots as robotics goes consumer; More connected devices and 3D Printing gets serious with the ability to print with metal!
- 2019: Level 3 Self Driving cars will be launched by GM, Ford and Daimler. 5G is launched in the UK. Digital Assistants are the next generation of AI.
Finally, the continued services consumerisation and customer experience expectations that are not consistent across service segments and age groups (7); the aging population (more on that later); the continual need to manage costs and drive services revenue streams. Is it any wonder Service Leaders are stressed; confused and wondering where the market is moving to.
Forward to 2025:
There are several significant streams of change that will impact the services market through 2025. I have tried to summarise those that I feel are significant to the business models and revenues of service organisations.
Customer-Experience Driven Service.
Customers and end-users expect the same experience inside business as they receive outside of business. However, one size does not fit all the customer segments you have (7). In 2022, over 50% of field service providers will offer a specialized digital customer experience that enables two-way interaction and workflow initiation via multiple human and nonhuman channels. The omni-channel service model comes to the fore (8). It is even more critical that your field service representatives represent your companies interaction with that customer by changing them in to customer service agents and train them on a customer-centric service model (9). 54% of customers have higher expectations for customer service today compared to one year ago. This percentage jumps to 66% for consumers aged from 18 to 34 years old (10).
Bring expertise to the fore, leveraging IoT, AI, Data Analytics and Predictive Analytics
As mentioned in a very recent report from Deloitte on “Smart Field Services” (9), a new approach to how to structure field service is needed. Increased data connectivity and The Internet of Things, in combination with more powerful predictive analytics solutions and artificial intelligence, have made remote monitoring and diagnosis possible across the majority of customer estates. To be able to take advantage of this, think about bringing the expertise together to leverage these capabilities in what Deloitte call “Insight Hubs”. However, the deployment of AI-based decision support in field service management systems will still lag expectations, with only 30% of service providers taking advantage of the service, cost and revenue opportunities (8).
New service models follow the “as-a-Service” landscape
With the rapid advances in Hybrid IT, both in the hardware space, as well as the software space, where business models are evolving rapidly away from legacy contract models into subscription based services; service models need to adapt. As Gartner attests, In 2022, more than 60% of asset manufacturers will offer outcome-based service contracts, up from less than 15% in 2018 (8).
The elephant in the room, refreshing the skilled workforce
We have talked for ages about the potential impact of an aging workforce. The reality is, that for Baby Boomers (Born 1946 to 1960) and Generation X (Born 1960 to 1979), the peak of the baby boom was in 1960. People born then will reach the typical retirement age of 65 in 2025. There will be a further peak, in 2028; so this issue is not going away. Instead, for the first time, Millennials (Born between 1980 – 1994) now make up the future field services employee base, and we need to figure out how we can take advantage of their skillsets. Despite what anyone says, there is a great deal to like about the newest generation of potential field service experts. Far from lazy or apathetic, Millennials tend to be results- oriented, natural collaborators and leaders who appreciate meaningful work—sometimes over salary. Naturally, these qualities lend themselves to improving the customer experience, as well as increasing the lifetime value of customers; and managers who utilize Millennial assets successfully will see real gains in up-selling, cross-selling, cost savings and efficiencies driven by people that fully understand the new connected technologies. As digital natives, they are more capable of utilizing these technologies and capitalizing on connected technologies while on a service visit or during a customer interaction.
Finally, I couldn’t resist a little crystal ball gazing, so a fascinating search then followed and these are just some of the trends to look out for (99).
Now this is really crystal ball gazing, but I wanted to see what key technology trends that could become mainstream this far ahead in the future.
- Flying cars hit the road, and the air. Just think of those field engineers zipping around the skies!
- 3D printers used to create full product replacements, rather than widgets currently..
- Share of global car sales taken by autonomous vehicles equals 20%. Maybe, your engineers will not even need to know how to drive?
- The average number of connected devices, per person, is 13. Your engineer is a mobile AI platform.
- Say goodbye to your mouse and keyboard, there are new user interfaces to redefine humanity. Talk about swiping left or right for service. Or is it up and down?
I leave you with the following quote which made me smile, enjoy!
“You can't stop the future
You can't rewind the past
The only way to learn the secret
...is to press play.”
― Jay Asher, Thirteen Reasons Why
The article references are here:
(1) Wikipedia entry on the PC market sector from 1996 to 2018, including the stabilisation in 2014, followed by constant declines through to 2018 https://en.wikipedia.org/wiki/Market_share_of_personal_computer_vendors
(2). BBC News report on the state of the high street in 2014 https://www.bbc.co.uk/news/business-31899346
(3) Gartner Global Cloud Services predictions 2018 through to 2022 https://www.gartner.com/en/newsroom/press-releases/2019-04-02-gartner-forecasts-worldwide-public-cloud-revenue-to-g
(4) References to Android operating system https://en.wikipedia.org/wiki/Android_(operating_system)#Reception
(5) Amazon's Impressive Long-Term Growth https://www.statista.com/chart/4298/amazons-long-term-growth/
(6) Consumer Technology releases since 2014:
(7) One Size Doesn't Fit All: The Subjective, Emotional, and Contradictory State of Customer Experience https://go.oracle.com/LP=83814?elqCampaignId=217114
(8) Gartner Magic Quadrant of Field Service Management Software solutions https://go.oracle.com/LP=81578?elqCampaignId=205666&src1=:ex:nc:::RC_NAMK170918P00087:SmarterCX&SC=:ex:nc:::RC_NAMK170918P00087:SmarterCX&pcode=NAMK170918P00087
(9) Deloitte report on Smart Field Service: Connecting customers, assets and employees published in the UK https://www2.deloitte.com/uk/en/pages/consulting/articles/smart-field-service.html
(10) 100 customer service statistics, customer satisfaction statistics and quotes from various brands, industry leaders and researchers which reflect the fast-changing landscape https://www.customerthermometer.com/customer-service/customer-service-and-satisfaction-statistics-for-2019/
(11) How Many People Will Be Retiring in the Years to Come? https://www.stlouisfed.org/on-the-economy/2019/may/how-many-people-will-be-retiring-in-the-years-to-come
(99) A view of the technology future beyond 2030 https://www.quantumrun.com/future-timeline/2030/future-timeline-subpost-technology
UK Tech On The Global Stage https://technation.io/report2019/