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.