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Digitale transformatie in de field service operatie, hoe komt het samen?

Door: Luuk Timmermans, Practice lead Field Service bij Appsolutely en Coen Jeukens, VP Global customer transformation bij Servicemax.

18 november 2021 stond ons live evenement over Digitale transformatie in de field service operatie gepland. Door corona is het helaas niet doorgegaan. Doel van het evenement was om te inspireren met klantvoorbeelden uit de praktijk en kennis van experts uit het werkveld. Om de mooie verhalen die waren voorbereid toch met jullie te kunnen delen hebben we deze, de afgelopen twee maanden, met jullie gedeeld in de webinars met Guidion en Reinier Haga Medisch Diagnostisch Centrum. Vandaag is ook het verhaal van ServiceMax gepubliceerd in deze video. Doel van dit blog is om, over de drie verhalen over digitale transformatie heen, te delen wat ons is opgevallen.

Luuk Timmermans

Terugkijkend op de webinars en video zijn er een aantal dingen die mij zijn opgevallen en die ik interessant vind om te benoemen. 

Om te beginnen herken ik mij helemaal in de constatering in de video van Coen dat klanten tegenwoordig veeleisender en mondiger zijn. Er wordt een pro-actieve houding verwacht van dienstverleners. Dit is het geval in de context van complexe assets die worden verkocht en assets die als een dienst worden verstrekt aan de klant. Dan wordt bijvoorbeeld verwacht dat de dienstverlening proactief is en assets voorspelbaar presteren. Maar dit geldt ook als er sprake is van meer transactionele diensten en de klant verwacht dat er bijvoorbeeld proactief gecommuniceerd wordt over de dienstverlening en eventuele afwijkingen op gemaakte afspraken. Deze ontwikkelingen in de verwachtingen liggen ten grondslag aan de noodzaak om te digitaliseren voor organisaties als Guidion en Reinier Haga Medisch Diagnostisch Centrum.

Waarde & Zichtbaarheid

Er zijn natuurlijk meer waardedrijvers zoals bijvoorbeeld kostenreductie en omzetstijging. Uiteindelijk is, zoals Coen aangeeft in zijn video, zichtbaarheid en controle over producten, medewerkers en producten de sleutel om op elk van deze onderdelen succesvol te kunnen zijn. RHMDC in het webinar en Nilfisk laten zien dat aan de voorkant deze relatie niet altijd aantoonbaar en kwantificeerbaar is. En dat starten met digitale transformatie uit geloof in de noodzaak zonder harde onderbouwing zich terugbetaalt in resultaten die aan de voorkant verwacht waren, maar ook met waardevolle resultaten die niet verwacht waren. Zo biedt het inzicht in de staat van de assets van RHMDC commerciële kansen die niet waren voorzien. 

Ben je geïnteresseerd in meer klantvoorbeelden waarin inzicht randvoorwaardelijk vanuit commercieel perspectief is? Kijk dan eens naar deze klantcase van Schneider Electric.

Mensgerichte aanpak & duurzaam resultaat

Niet alleen klanten verwachten meer, maar medewerkers ook. De aanpak van Guidion en RHMDC hebben overeenkomsten in de mensgerichte aanpak. Beiden laten zien dat het zorgvuldig betrekken en meenemen van alle stakeholders randvoorwaarde is voor succes. Bij Guidion doen ze dat door bij de inrichting van de digitale oplossingen niet alleen te kijken naar de beleving van de klant in een ‘klantreis’ maar ook met de medewerker vanuit een ‘medewerkerreis’. Ook bij RHMDC zaten de gebruikers zelf aan het stuur om aan te geven hoe de inrichting van de oplossing hun werk leuker en makkelijker kan maken. Uit beide voorbeelden spreekt de overtuiging dat duurzaam resultaat voor het bedrijf voortkomt uit een mensgerichte aanpak.

Coen Jeukens

Wat overduidelijk opvalt in alle serviceverhalen, is dat het mensenwerk is. Zoveel mensen, zoveel wensen. Dat uit zich enerzijds in een stroming om processen te willen standaardiseren. Om daarmee mate van controle en efficiency bereiken. Anderzijds is er een stroming van situationeel maatwerk. Daarmee inhakend op een gevoel van autonomie en eigenheid. Dit werd mooi verwoord door Guidion. Zij werken met verschillende klantprofielen waarbij de workflow per profiel kan verschillen. 

Klant 360, Workforce 360 en Asset 360

ServiceMax heeft in 2019 een onderzoek laten uitvoeren door Forrester om uit te zoeken wat de bouwstenen zijn van een serviceorganisatie. Naast de overduidelijke Klant 360 komen daar de Workforce en de Asset 360 bij. 

In de verhalen van Guidion en RHMDC worden mooie voorbeelden gegeven van Workforce 360. Het maakt namelijk nogal een verschil of je workforce interne mensen, contractors of ZPP-ers zijn. Dit uit zich in de mate van controle, zichtbaarheid en inzetbaarheid die je over je workforce hebt. En vergeet ook niet de kwaliteit, loyaliteit en mate waarin je workforce je visitekaartje is.

In de video van ServiceMax is veel aandacht gegeven aan de Asset 360. De gedachte erachter: je moet wel weten welke producten er bij een klant staan, in welke staat die zich bevinden en hoe ze worden gebruikt om doelgericht service te kunnen verlenen. Heb je een 360 graden zicht op de asset, dan stelt die zichtbaarheid je in staat om zowel efficiënt te zijn langs de kosten-as, als wel effectief te zijn langs de commerciële-as. 

Customer Intimacy

Wat mij al 29 jaar grijpt in het servicevak is de mengelmoes van harde cijfers zoals kostenreductie en omzetgroei en zachte indicatoren als klanttevredenheid en beleving. Evenzo de spanning tussen controle en autonomie. In alle drie de presentaties zien wij dit terugkomen. Toen Youp van ’t Hek in 2010 van leer trok vanwege een service-akkefietje over het mobieltje van zijn zoon, bleek dat iedereen een mening en verwachting had over wat service zou moeten zijn. In dat jaar ben ik Youp op een congres tegengekomen en heb aan hem gevraagd: “Je had overduidelijk een verwachting, was die verwachting ook in lijn met het serviceniveau waarvoor je had betaald?”. En daar zit hem nu vaak de kneep. Kan je die verwachting managen? En welke tools/processen heb je daarvoor nodig? In 2010 was Youp heel mondig en zocht hij meerdere kanalen om zijn verhaal te vertellen. Anno 2022 kunnen serviceorganisaties beschikken over tools en processen om contextuele service te verlenen… en om Youp van repliek te voorzien.

Met het delen van bovenstaande observaties en verbanden tussen de webinars van Guidion, Reinier Haga MDC en de video van ServiceMax hebben we een poging gedaan een relatie te leggen en de rode draad te schetsen tussen de verschillende onderdelen. Net zoals dat normaal in je eigen gedachten plaats zou hebben gevonden als je het live evenement in zijn oorspronkelijke vorm had kunnen bijwonen. We hopen dat daarmee dit blog een waardevolle samenvatting geeft van hetgeen aan de orde is geweest en zien er naar uit komend jaar een vergelijkbaar evenement weer live te kunnen organiseren.

Deze blog is als origineel gepost op de website van AppSolutely.

How do you know you are making money on your service contracts?

In my previous life I sold service contracts for a large OEM. Like many service executives, I was proud of profit margins in the range of 40-60%. But when I talked to my CFO, the numbers didn’t compute in the bigger organisational picture. Let me take you on a narrative of planned versus actual contract profitability and how I gained control over my margin contribution.

Reactive margin contribution

It is still early in the new fiscal year. I have good hopes of making my numbers. Of course I know I have a few ‘high maintenance’ customers. At the same time I have a few ‘cash cow’ service contracts. They will balance out, I’m confident. 

Fast forwarding to the last quarter of the year. Am I still that confident? Obviously I have more insights into my year-to-date cost. Did everything pan out as expected? What options do I have in the remaing weeks of the year to make my numbers?

What I am trying to say. No matter how good my predictions and projections were, actual performance has a tendency to differ from planned performance. Maybe less on aggregate level, but certainly on individual customer or contract level. 

I want to speak the same language as my CFO to better align with the corporate agenda.

It was my ambition to be more in control. Not to depend on reactive and aggregate margin contribution, but to be proactive and predictive on individual customer/ contract level. 

Defining the selling price

When I started selling service contracts I had to brush up my sales 101. How do I define the seling price of my service contracts. I had three paradigms at my disposal.

  • Selling price = Cost plus Margin (aka Cost Plus)
  • Margin = Selling price minus Cost
  • Cost = Selling price minus Margin

If I had full visibility on cost and I had the upper hand in the commercials, then cost plus would work for me. My reality was that cost was more of a guesstimate. Rearding the margin, we had internal margin objectives. But in the commercial arena we often had to give in. This led to the acceptance of the second equation. Margin was not a driver but a result. Margin was reactive. 

Expanding on the narrative in the first paragraph: in the last quarter of the fiscal year the CFO would become vocal using the third equation. If the selling price was an unalterable fact and the margins were falling low, then only available option was to cut my cost.

I want to get ahead of the game to deliver predictable margin contribution.

Influence cost while you can

I went back to my drawing board. How shall I construct my service contracts such that I can monitor all three variables: cost, revenue and margin? In addition I implemented the basic financial concept of planned versus actual and outlook in my service execution process.

After having had my service menucard conversation with my customer, I would cost all those entitlements, resulting in the sum of planned cost. When the contract went into service-delivery mode I would keep a tally on the actual cost. If actual cost develops in a bandwidth of say 10% or planned cost, I knew I would deliver on the expected margin.

Beyond the actual cost development, modern day service execution tools also provide visibility of future service activies. Thus you can create a cost outlook as well. Now you have all the info to make the right decision in real-time, protecting your margins.

Predictive margin contribution

Why all this fuss? Apart from my personal and service domain motivation, my CFO told me loud and clear: I dislike surprises, I want predictability. If only I could cater to the CFO’s wants, maybe I could get access to budget to mature my processes.

I knew I was probably the single largest margin contributor to my companies result. Maybe more out of luck than by design. If only I could invest in tools that would give me that control and predictability.

Better and competitive pricing

Beyond the CFO persona I want to highlight role and importance of the Service-Sales persona. Setting the selling price for a service contract is a subtle process. Price pressure is prevalent in pretty much every sales cycle. The Service-Sales persona needs handles to balance revenue versus margin contribution.

Asset owners want maximum uptime at lowest operational cost.

When my cost insights were on guesstimate level, cost plus did occasionally result in non-competive price points. When my cost guesstimate was too low, my margin took a hit. When I started monitoring the actual margin, I got a good idea if I had priced my service contract ‘fairly’. Deliberately I’ve put the word fairly between quotes. High margins may be good for my bottom line, but from a customer perspective high margins may not be sustainable. Margin insights were an absolute must have for me when renewing/ renegotiating my service contracts.

This article is published on Diginomica and Field Service Digital.

Field service works better when supply chain and service execution work together

An effective supply chain for parts is a crucial part of a successful field service operation. How much time does your technician spend on finding and receiving the correct spare parts? What is the impact to your customers when those parts are not available? What should you do with the defective, left-over and unused parts after the job?

These questions are a compound of conversations I have with customers when doing ride-alongs on service call-outs. They may sound pretty operational, but the implications are significant. Think about higher costs, loss of productivity, unnecessary capital tied up in inventory, repeat visits impacting uptime and customer satisfaction, lost residual material value and negative impact on your circularity goals. There is a lot to be gained from effectively managing your parts. To do this, you need to integrate your supply chain and service execution functions.

Not sold yet? Let’s dig further Into why you should integrate these functions and how it can benefit the business.

Why connect service and supply chain?

In many transformation journeys the initial focus is often on optimising labour to increase the productivity of both the technicians in the field as well as the supporting roles in the front and back office.

But optimisation does not end with labour. There are two very good reasons to accelerate supply chain integration into your service execution:

  1. You need a combination of consumables, spare parts and labour to maintain and fix non-digital products-equipment and assets.
  2. Your CFO will tell you that parts are the second largest cost component after labour.
  3. Having the right parts at the right time and place also optimizes labour productivity.

Though consumables and spare parts are intertwined with the labour component, supply chain integration and optimisation are habitually postponed until phase two of a digital transformation. But even if spare parts costs are second to labour, the implications of not having supply chain integrated into your service execution process are substantial for multiple personas and justify inclusion in phase one.

How does this impact technicians?

In many organisations, supply chain is a separate function with Its own business processes and tooling, resulting in a disconnect with service execution. I’ve seen technicians using email, whatsapp and Excel to order parts and to keep track of forward and reverse logistics. I’ve seen duplicate entry, swivel chair processes and multi-disconnected-tooling. In those situations, the technician works for the tool instead of the tool working for the technician.

If it were up to technicians, having an integration between service execution and supply chain would be high on their wish list. It would make their life easier and would help them in becoming the hero on site.

Can service and supply chain resolve conflicting goals?

From a supply chain perspective there is an ambiguity regarding the necessity for holding inventory. Financially, inventory is tied-up capital, and you want to reduce that. On the other hand, you need inventory to meet contractual response times and uptime commitments.

In contrast, service leaders can easily articulate the need for spare parts. But those same leaders find it difficult to determine how much. Supply chain leaders typically have a year-over-year target to reduce inventory. Sounds conflicting? Maybe not with modern and integrated tooling.

Here’s what have we learnt from the ride-along — if supply chain has access to the ‘raw’ requisitioning, consumption and return data from the technicians, supply chain can do better inventory planning as well as optimise the forward and reverse logistics flows.

In the end you’ll have multiple winners when labour and parts work in unison:

  • Customer — higher first time fix and less downtime.
  • Technician — less admin, track & trace visibility of parts, guidance for returns.
  • Service leader — less parts leakage, higher parts accountability, higher CSAT.
  • Supply chain — insight in true consumption, more leadtime visibility (less expediting).
  • CFO — less purchase of non-consumed parts, lower inventory, less scrap, less logistics cost.

Supply chain and service have many different projects and priorities, but it is in the best interest of your engineers, customers and CFO to integrate your supply chain and service function in the first phase of your digital transformation.

For more on the benefits of connecting service and supply chain, check out What Value Does Asset Data Hold for the Supply Chain?

This article is published on Diginomica.

Will there be an uplift in Depot Repair (vs Onsite Repairs)?

If a product requires a physical repair there are two options: a technician goes to the product or the product comes to the technician. Whatever model is used depends on many different parameters. The good news, with modern service execution tools your options grow exponentially while maintaining control.

Covid is adding an additional boost to the uplift of depot repair. If technicians are not welcome on the site of installation, then the assets, or part of it, have to come to a depot. 

A balanced choice

It would be nice if the repair model could be a choice. A choice based on situational characteristics, instead of rock solid process defaults.

Why choice? Because more vocal and demanding customers expect and request choice. Situational, because the conditions can be different each time to both requestor and provider. By giving choice you provide a level of autonomy to the recipient. Choice is double edged as well. The receiver has to process choice and thus you can get valuable information on what is important to that person. Again, what is important, changes over time and is situational.

Multiple service delivery options

To put field service and depot service in a perspective, I want to paint the wider picture of service delivery options.

Diagram Description automatically generated

In this picture the cheapest mode of service delivery is the self healing variant. Though cheap from a service delivery point of view, it may be expensive from a product engineering point perspective.

On the other end of the spectrum we have the dual-visit engineer on site variant. If the failure is hard to diagnose, you need a trained engineer to find the problem and define the mitigating action plan. If the spectrum of potential solutions is wide, it is likely you are not carrying all spare parts and tools resulting in a second visit for the fix.

Note: not depicted in the landscape is the NPS/ CSAT element of all these service delivery options. It is in the entitlement process that you weigh the business objectives and select the best option for that service instance.

Design for Service

The various service delivery options are very much tied to the way your products are designed. We all know the example of the owners manual of a car. The manual defines the maintenance guidelines based on a generic use profile. The setup of the service delivery in car dealerships is based on that manual. In short, the simple things are customer replaceable[1], some repairs can be done in the field, whereas others can only be done in a fully equipped depot.

A similar setup applies to the maintenance manual of capital goods. If the capital good itself is non-moveable, then it becomes even more important to design for service. It is unlikely one will deinstall an MRI to send it to a depot. It is also unlikely the technician will carry an unlimited amount of spare parts, tools and calibration equipment. Thus the manual prescribes which ‘nodes’ in the bill-of-material are fixed on-site and which ones will be swapped and sent to a depot.

The rise of depot repair

If technician capacity is scarce. If technician capacity is expensive. If customers want more uptime and faster repairs. Then it is logical that a service organisation moves from lower level component on-site repair to higher level sub-assembly swap. The effort and complexity of repairing the sub-assembly is moved from on-site to depot. As a result you can do more repairs with the same pool of technicians … and even use lesser skilled technicians.

“I used to pay 5$ for a component and 80$ for 1 hour of technician time, now I pay for a 200$ subassembly and 15 minutes of swap time”

And what is the advantage for the asset owner? It is more than only comparing the material and labour cost. You get a faster fix, alias more uptime. The new sub-assembly is fully tested and comes with warranty, alias you get better quality at lower risk. One more benefit. If the sub-assembly swap requires lesser technology skills from the technician, what if the swap could be performed by yourself? This gives you more freedom and flexibility to source those sub-assemblies.

Whether the depot model is charged as part of a full service contract or time-and-material, the value promise presents itself beyond the individual repair action. More-over, the value appraisal will be dependent on the weighing of cost & benefit factors fro both the service organisation and the asset owner.

Enabling and invoking depot repair

To facilitate a depot-model you need business process support that manages :

  • reverse logistics of the sub-assembly from customer to depot
  • facilitates the actual repair/ refurbishment of the unit in the depot
  • triggers forward logistics to get the sub-assembly back to the customer

Depending on your commercial offering, you may want to add additional features like:

  • provide a loaner while sub-assembly is in depot or
  • offer an advance exchange so only one on-site intervention is required and the refurbished unit ends up in inventory.

And maybe most important of all is getting decision-making support when to and when not to invoke of depot repair. This ties to your entitlement process and how you weigh your business objectives when your vocal customer is calling.

With modern service execution tools it’s all about connecting the dots. Using available information from Customer, Workforce and Asset to present choice to both the asset owner and the service provider.

[1] Some of you may be familiar with acronyms FRU & CRU (Field Repairable Unit and Customer Replaceble Unit). If we had to give an acronym to the depot variant, it would be called DRU.

The mouse and the cheese

Who hasn’t ever played the game of drawing a line from the mouse to the cheese though a seemingly impossible maze? Do you still remember the trick? Spoiler, don’t start at the mouse but begin at the cheese. Start with the end result in mind.

Running a transformation journey in business isn’t any different. True, the end point may be a moving target, but still to a major extent your journey is defined by a business objective.

Why am I bringing up this topic? At the Field Service News Live Symposium in Birmingham, UK we had a lot of conversations on AI. If AI is the cheese, then the technician is the mouse. We know that no matter how much technology we deploy, as long as we live in a world of physical objects, ultimately somebody will need to hold the ‘wrench’.

Technician of the year

That ‘somebody’ who is holding the wrench is Jack Ogden. Jack works for Beckman Coulter. Jack was awarded technician-of-the-year by Field Service News. For me Jack and all the other Jacks are the true heroes in the service domain. They keep the world running. They are the heroes on site. To be successful they need the right tools, correct information and empowerment to perform their ‘magic’ in the face of ever more demanding asset owners. What do we give them? State-of-the-art field service management tooling? AI?

A different planet

Now picture yourself having toasted to Jack yesterday evening and today you are engaged in an AI conversation with a group of service executives. Have we landed on a different planet? I can’t shed the feeling there is a gulf of space between day-to-day service operations and the AI discussion. Echoing the words from Rajat Kakar, it feels like a maze separating the mouse from the cheese.

Paradigm shift

Don’t get me wrong. As much as I comprehend the world of Jack, the cheese is real too. I do believe AI has a substantial potential in the service domain. Though I may not have a comprehensive understanding of what AI means, the fact that during the service lifecycle massive amounts of data are generated, I can imagine that deep learning and mining tools can lead to better and optmised decision making. 

And when I focus on decision making, service executives and Jack are not so different. In a recent ride along I did, the focus was on having reliable asset data. To be more efficient and proactive. The sheer amount of assets and the long lifecycle makes it practically impossible for humans to consume the data and to prepare for each eventuality. Tribal knowledge and experience drove historical service execution. Todays ambition for this company is to empower every service employee make informed decisions.

We want to move from ‘assumed’ to ‘informed’

Navigating the maze

When we were children we found joy in navigating[1] the maze. Through trial and error we ultimately found a strategy. In business the stakes are a little higher. Still, there is a lot of trail and error with new technology adoption. But we can be smart at it when we have the cheese in mind.

With AI we don’t want to repeat the same ‘mistake’ a lot of companies made with big data. Big investments resulting in unused[2]data lakes. An example of starting at the mouse and uncertain where the cheese is. If forementioned ride along is exemplary, we can define the cheese as the business desire to facilitate informed decision making over assumed decision making. Thus the path through the maze become much clearer. 

Making an impact with asset data

AI has the capability to convert huge amounts of data into ‘intelligence’. The quality of intelligence is based on what you feed into the algorythm. Simple rule: garbage in, garbage out (GiGo). Before you start you have to be very conscious about your data. Illustrated by a failed AI implementation at Amazon. When you use historical data to teach the algorithm, beware that the decisions made by AI will be a compound of all bias and mistakes made in the past.This brings me back to Jack. If Jack wants to make an impact, he needs asset data. If the volume of asset data is big, it would be a great help to Jack if AI could make suggestions. Not decisions, but suggestions … because ultimately it is Jack who is holding the wrench.

[1] For the mathmeticians amongst us, have a look at Trémaux’s algorithm.

[2] According to Forrester “between 60% and 73% of all data within an enterprise goes unused for analytics”. InsideBIGDATA asks the proverbial question “are data lakes just dumping grounds?”

Is the Service Menu Card Replacing Bronze, Silver and Gold Contracts?

During last week’s High Tech Manufacturing event in the Netherlands, we reimagined tomorrow’s service delivery in the context of vocal and demanding customers. If customers expect products to work, is it enough to mitigate downtime, or should you know why your products work and in the context of customer usage? Is your current services portfolio in line with tomorrow’s customer expectations?

Bronze, Silver & Gold Contracts

In reviewing the services portfolio I used words like bronze, silver, and gold contracts to paint a continuum of reactive to proactive and predictive contracts. In an earlier blog on Mind the Gap, I used gold to quantify your maximum services revenue.

Proverbially the gold contract is the ultimate bundle of services to guarantee the uptime of the equipment. It’s not really product-as-a-service, as the customer still needs to buy both the product and a service contract, but outcome-wise it is the next best thing.

Just like with any product or service that is sold today, B2B or B2C, the big question is: who decides what is put into the bundle? Is it a seller-push or a buyer-pull?

This is exactly the challenge the high-tech manufactures are facing today. Based on our discussions during the event, the consensus was: we need to provide more choice and autonomy to our customers. Even if the installed product is the same, the usage context is different case by case.

Product Push vs. Usage Pull

It is not uncommon that the current bronze, silver, and gold bundles are based on product characteristics. When we sell expensive and/or complex products, we tend to believe we need to offer the higher segment of bundles. But if your expensive product is used in lower utilization environments, then the cost of downtime to its owner is lower, resulting in less budget for mitigating strategies. That unit may end up with a bronze contract.

If we want to address the challenge of more vocal and demanding customers, we need to flip the bundling paradigm from product to usage characteristics. To understand those usage characteristics we need to have a mitigating strategy conversation with the owner/user of the product.

Mitigating Strategy Conversation

“Dear buyer, why is my product so important to you, and what happens if my product fails? What impact does downtime have on your operations?”

If your customer is buying your product, meaning there is a point of title passage, it implies that all risks associated with owning the product reside with your customer. As a product owner, your customer will define a mitigating strategy for uptime/downtime risks throughout the life cycle of the product. As OEM you can help the product owner by offering life cycle services. The owner will weigh risk versus price.

“Dear buyer, do you agree with me that throughout the life cycle of the product you will need the following service activities to maintain and safeguard the uptime of the product? Which of those activities do you want to execute yourself and which ones do you want me to do?”

Is the Service Menu Card is Replacing Bronze, Silver and Gold Contracts?

The above picture a derived from the ITIL v4 framework by Axelos. All boxes serve the nominal state of the product, the uptime. And uptime ensures the output and outcome of the product. If your customer agrees with this landscape of services, the conversation becomes a simple one: what level of risk does the owner/buyer want to retain, versus outsourcing that risk to a service provider in exchange for a fee.

Driving Business Results with Entitlement Process

Flipping the service bundle paradigm and handing over the choice to your customer may sound scary. Is it controllable? With modern-day field service management software the answer is yes. It’s similar to going to a restaurant. You define what is on the menu. Your customer has the choice. And any good chef knows that the personal interaction at the table when ordering is key to the choices made. The success of CSAT starts when ordering.

With modern tools, you can implement a service menu card in the service-sales process. The true value comes from pairing the menu card with an entitlement engine in your service delivery process. It’s great that you sold all those configure-to-order service contracts to meet customer requirements. The people that have to deliver the services need to be aware of what has been promised, what has been paid for, and what is billable. This is where the entitlement engine kicks in.

A sophisticated entitlement engine has visibility on the customer, the asset, the contractual obligations agreements, and on the specifics of the customer-ask as specified in the case or work order. As ‘gatekeeper’ the entitlement engine will drive:

  • Customer expectation & satisfaction
  • Leakage reduction
  • Cross & Upsell increase
Is the Service Menu Card is Replacing Bronze, Silver and Gold Contracts?

To accommodate vocal and demanding customers a service menu card is a good alternative to bronze, silver, and gold bundles. Having choice and autonomy creates engagement and builds the foundation to success and CSAT.

To stay in the restaurant analogy, the proof is in eating the pudding. Your service delivery organization needs to have insight into what has been sold/ promised and be able to act on it. Imagine the waiter bringing the food without knowing the order. No tip, invoice at risk, no return visit.

The service menu card and the entitlement engine go hand-in-hand. Say what you do then do what you say.

Learn more about service contracts & entitlements from ServiceMax here. 

This article is published in ServiceMax Field Service Digital on October 21st, 2021

Managing Service Profitability in the Age of Digital Transformation

Co-author: Joe Kenny

It is an age-old dilemma for Operations Managers. Your CEO wants XX% revenue growth, your CFO wants XX% cost reduction, your CRO wants better references and higher NPS scores, and you are supposed to deliver all of this with zero additional investment, because – of course – you have been doing this for years with no additional cash, so why would you need it now?

To top all of this off, you had very little idea of where you stood, operationally or financially, at any given time. And this was due to the fact that access to real-time data, a current view into work in process, and accurate financial information was all impossible to come by.

Historical Challenges for Service Operations

I often speak at conferences and participate in webinars, and I often relate this anecdote – in March I would lay out my operational plan, based on the most recent P&L statement I had received (January’s), intending to address performance weaknesses I had uncovered. My team would execute the plan and in May I would receive my March P&L to see if the response to January’s performance shortfalls were successful or not. It was madness.

Now, layer onto that, the fact that 30, 60, 90-day invoicing accruals were also Operation’s responsibility, even though we had an AP department. This process greatly impacted both revenue and cost, as the cost of service was consumed, but the associated revenue may not have arrived in 90 days.

Impact of Digital Transformation

Fast forward to today, and service operations managers have been given a lifeline—digital transformation. Digital transformation can be like a light switch, illuminating what is happening in real time, allowing service operations leaders to adapt to circumstances immediately. They can reallocate precious resources instantly, validate payment status and credit status prior to service delivery, and see and understand the impact of operational plans in real time.

Digital asset and service management platforms can provide real-time performance measurements, both foundational and top line. This includes data round first-time fix rate, mean time to repair, mean time between failures, and equipment uptime. With this data, operations managers can organize and drive for peak utilization of labor resources while ensuring that the training and quality of work are optimal. This then increases the efficiency of their organization and lowers the cost to deliver excellent service.

With today’s technology, service operations are finally on par with our commercial partners and can see and act on upsell, cross sell, renewals, and service contract extensions instantaneously. In addition, we can support sales by identifying and helping them target competitors’ equipment for targeted replacement. We are the eyes of the commercial team on the customer’s location.

Newfound Financial Control

Utilizing a digital solution allows for real-time tracking of labor, parts consumed, travel, and any other costs associated with a service call, regardless of whether it is a T&M call or in support of a warranty/service contract entitlement. This is a key advantage that enables service operations leaders to manage labor and parts expenses far more granularly. In addition, they can evaluate the revenue associated with the service provided to validate if the pricing is correct based on their revenue and margin targets.

This ability to understand the Cost to Serve on an asset or entitlement agreement in real time is a huge step forward for service operations. It gives them the data they need to truly align entitlement pricing, cost control, operational efficiency, and productivity to accurately manage and forecast their performance and address fundamental issues that are obstacles to achieving their own performance objectives.

The evolution of equipment and asset service management platforms has greatly assisted service operations professionals in attaining the insight, visibility, and control that their commercial and financial counterparts have enjoyed for decades. As asset and equipment maintenance and service becomes a larger part of most organizations’ revenue and margin contributions, it is important that they equip teams with the technology that enables them to better manage and control their operations.

This article is published in ServiceMax Field Service Digital on November 2nd, 2021 and Field Service News on October 19th, 2021.

Asset Data Remains Largely Untapped For Driving Revenue Growth

New study finds asset equipment data is key to bridging the gap between sales and service

PLEASANTON, CALIFORNIA – October 19, 2021 – Valuable data collected from servicing equipment assets remains largely untapped, unused and under monetized, offering rich potential to sales and marketing, according to new research conducted by WBRin collaboration with ServiceMax, Inc., a leader in asset-centric, Field Service Management software and Salesforce, the global leader in CRM.

The study, “Building a Bridge Between Sales and Service with Asset Data”, surveyed 100 field service leaders across the US and Canada from a variety of verticals, including manufacturing, information and communications technology, the semiconductor industry and utility sectors.

While all the organizations surveyed currently aggregate and analyze data from their field service operations, only 22 percent trust their field service data completely, indicating lack of confidence in their existing systems or procedures. And more than one-third of respondents can’t connect their field service management solution with their CRM. As a result, organizations are missing opportunities to provide better service to their clients and generate new revenue streams by monetizing data, such as personalizing marketing campaigns, driving more revenue from usage insights and analytics and demonstrating ROI in sales conversations.

While asset data remains largely under-used at present, the study also revealed that almost half of respondents (44 percent) plan to adopt or update their asset data analysis solutions in the next 12 months —including remote and virtual service support tools, asset data analysis solutions, IoT devices and sensors, and others. Likewise, at present, only 27 percent are currently utilizing their field service solutions for field service analytics, while in the next 12 months, 57 percent will deploy this capability.

“The research shows growing recognition and demand for closing the asset data gap,” said Amit Jain, Chief Product Officer for ServiceMax. “This gap exists between an organization’s current service revenue and the maximum revenue it could achieve when every unit sold could have a higher service contract attached to it. By using field data to optimize revenue and drive product innovation, product, service, sales and marketing organizations can maximize their asset performance. This critical insight is relatively new and empowers service leaders to easily shift to outcome-based business strategies that fuel growth in an age where service is now a differentiator.”

The research also found that 43 percent of organizations admit they need to improve their asset uptime and availability, lending further weight to the need for better service data and service delivery.

The full report can be downloaded here.

Salesforce and others are among the trademarks of salesforce.com, inc.

About ServiceMax

ServiceMax’s mission is to help customers keep the world running with asset-centric field service management software. As a recognized leader in this space, ServiceMax’s mobile apps and cloud-based software provide a complete view of assets to field service teams. By optimizing field service operations, customers across all industries can better manage the complexities of service, support faster growth, and run more profitable, outcome-centric businesses. www.servicemax.com

Media Contact:

Nicole Guzzo
nicole.guzzo@servicemax.com

Deploying Forms to Boost Your Business

Co-author: Allan Alexopulos

ServiceMax and Bolt Data recently had the opportunity to join ProntoForms in a session at EMPOWER‘21 to share how their capabilities enhance service solutions on the ServiceMax and Salesforce Field Service platforms. From contextual app building to bi-directional data flows, you can hear Mansell Nelson, SVP of Business Development at ProntoForms, Allan Alexopulos, Managing Director at Bolt Data, and Coen Jeukens, VP of Global Transformation at ServiceMax, cover all this and more in the session here.

xHere’s a sample of what you’ll learn about in the session:

  • Contextual app building
  • Bi-directional data flows
  • Custom contextual workflows

Recently, I had the opportunity to catch up with Allan Alexopulos about our experiences with ProntoForms in the field. We walked away with key learnings that we’d like to share with service leaders who are evaluating the business case of smart forms and checklists.

Why we use checklists

We use checklists to ensure our technicians work safely, to prove we are compliant, and to collect data. Checklists are everywhere and they are a powerful instrument. At the same time, they drive many technicians nuts. To realize true value from your checklists, it’s important to ask your technicians a simple question—how much tool-time do you have and how much time do you spend on admin?

The value of doing a ride-along

Last week I had the privilege of doing a technician ride along for a supplier of industrial gasses. A lot of those gasses are not healthy to humans, so safety is their first priority. The installations storing the gasses are configurable for each customer. So you can imagine the importance of updating the as-maintained and meter readings.

They had more than 50 forms. The longest form contained 223 questions. If you forgot to enter mandatory fields, you couldn’t save. It could get worse if the equipment was located in an ATEX zone. No electronic devices allowed. Would it surprise you that 30% of capacity was used on hands-on-tool-time and 70% on admin?

The business case here is obvious. So is the wish list of the technician. It is not rocket science—what you need is a forms tool that allows you to be smart.

Prepopulated forms

How much dual entry of data does your technician have to complete? During my ride along the technician had to repeat the entry of customer and work order data four times. It’s obvious that such data could easily be prepopulated.

In my previous role as service manager at Bosch, I learned from my technicians that a preventive maintenance job would start with pulling the previous PM report. In the old days that report would be an excel file.

  • Step 1: copy previous file
  • Step 2: rename to current job
  • Step 3: only change those fields that have changed

Compare these three steps with your current process and form design. Anything that will cause more work will reduce the adoption rate of new tools.

Contextual forms

Going back to the repository of the 50 forms. These forms were designed as generic forms, catering to all possible eventualities. I asked the technician how he knew what fields to fill and which ones to skip? His answer: tribal knowledge. And if he didn’t know, he would call a colleague.

As each gas installation was different and most customers would have their own work permit and safety guidelines, you can imagine the generic safety checklist is pretty long and error-prone.

High on the wish list is to have forms to be contextual. Maybe the most basic variant: when doing three jobs on a day for the same customer, please prompt safety questions in a smart way and not as a triple entry.

The value of an implementation partner

When talking to Allan about his recent implementation project, he shared some key learnings that allowed the team to tackle complex global compliance requirements.

The project’s goal was to streamline and standardize compliance reporting for a leading medical device manufacturer. With the combination of a deep and diverse product line, regional compliance reporting requirements, and a diverse worldwide workforce, this was the most challenging part of the global rollout of the company’s ServiceMax Field Service solution.

In addition to improving the accuracy of compliance information coming from the field, the Bolt Data and ProntoForms teams also aimed to improve the design and maintenance of the checklists used by field technicians. By working closely with ProntoForms’ R&D and services organization, Allan was able to architect the solution to create highly maintainable checklists that were then translated into multiple languages and integrated into the field technicians’ mobile devices.

As a highly knowledgeable implementation partner, Allan and the team at Bolt Data knew how to best solution to meet the organization’s needs. One of the most impactful changes was having checklists be centrally managed, which allowed for iterations to be easily rolled out as regulatory requirements change. Adding a question or changing the range of acceptable values for a question could now be easily updated and pushed to the field worldwide with a fraction of the effort and time previously required.

Reflecting on his time on the project, Allan noted, “The effort to manage compliance checklists is a fraction of what it used to be and the quality of the information coming from the field is dramatically improved, resulting in higher quality and faster compliance reporting. ProntoForms leadership and collaboration with the project team were instrumental in the success of the project.”

To learn more about deploying forms to boost your business, make sure to watch our EMPOWER’21 session on-demand here.

This article is published in ServiceMax Field Service Digital on October 5th, 2021

Keeping Your Assets in Shape

Do you have this feeling that the battery of your phone drains faster and faster? Internet forums are full of testimonials and resolutions for keeping your battery in tip-top shape. How does this apply to B2B products, equipment and assets? Can asset owners monitor the performance of the equipment, and what handles do they have to maintain output/ outcome at the nominal level promised at point of sale?

For many years I’ve captured the digital and service transformation journey in a single tagline: “from fixing what breaks to knowing what works.” The message is driven by a simple principle: customers expect things to work. Even more, they expect the outcome of the asset to be stable over the lifecycle.

Another simple truth is that everything eventually deteriorates and breaks. This prompts the following questions:

  • What is the life expectancy of the asset? 
  • What do I need to do to keep the asset in shape?
  • What can I do to extend the life cycle of the asset?

Building a Fitness Plan

Preventive maintenance might be the first thing that comes to mind as the way to keep your assets in shape. But what does preventive maintenance (PM) prevent? And how does it affect asset performance and life expectancy? This was a tough question to answer when one of my counterparts in procurement, who was looking to reduce the selling price of a service contract, asked me, “What will happen when we reduce the PM effort by lengthening the interval?” This was even more difficult to answer when it became a numbers game, and the purchaser asked me to prove the offset between PM and break-fix. 

So where do we look next? I propose condition-based maintenance.  

We know that the performance of an asset will deteriorate over time, and we know the rate of deterioration will depend on various attributes like aging and usage. Because these attributes are measurable, we can use them as levels to trigger a service intervention. 

So rather than taking a one-size-fits-all approach based on time intervals, you can create a custom fitness plan for keeping your assets in shape. One that looks at the condition of the asset in relation to its expected performance. This can look like an intervention being triggered when the output of an asset or the viscosity of a lubricant drops below a certain threshold. 

To continue with the fitness metaphor, we often don’t just want to stay in shape—we also want to increase our longevity and even get in better shape as we age. When it comes to your assets, this is where mid-life upgrades, booster-packs and engineering changes come into play. And in the same way you use predefined levers to trigger service interventions, you should use these levers to trigger updates, upgrades and lifecycle extensions.

Both of these service strategies use asset health at the core of your service delivery model, steering you away from ‘fixing what breaks’ and towards ‘knowing what works.’

A Real Life Example

Imagine you have a pump and valve combination that has a nominal capacity of 140 m3/h.

If you used a preventive maintenance model that runs every 6 months, it would not take into account the age of the pump and valve combination, nor would it account for the corrosiveness of the transported materials. 

But if you took a condition-based approach using IoT-connected sensors, you could measure attributes like vibration, temperature, and energy consumption and use them as indicators for asset performance. For example, if the capacity drops below 130 m3/h, a service intervention would be triggered. It’s like the pump saying: “I’m not feeling well, I need a medicine.” On top of this, if you detect the pump is consistently pushed beyond original specifications, you can know that it’s necessary to initiate an upgrade conversation to safeguard asset health and durability.

Asset Centricity

The common theme of these service strategies is asset centricity. It’s about putting asset health at the core of your service delivery model and continuously comparing an asset’s current output with its expected performance.

By looking at current performance, expected performance and demand, you can also advise your customers on when it’s time to downgrade or upgrade the asset. Through this asset-centric lens you can truly become a fitness coach, advising your customers on the right fitness program that will keep their assets in tip-top shape.Learn more about IoT and condition-based maintenance here.

This article is published in ServiceMax Field Service Digital on September 1st, 2021 and Field Service News on August 25th, 2021.