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.

Maximize Virtual Round Tables – Recap

On the Maximize agenda we offered set of 12 round tables spanning a range from covid implications to asset centric business models. From technician skill profiles to commercial maturity. These topics fuelled a wide range of conversations. In this blog we’ll try to give you a taste. Want more? Have a look at the Maximize recordings here: https://www.servicemax.com/maximize/

From short trial to longer-term innovation: lessons/ practices from COVID that will persist

A little over a year ago we learnt about Covid-19. Denial, anger, bargaining, depression and acceptance. We’ve been through it all. Covid-19 drove a number of changes in the way service was delivered and consumed. Organisations quickly deployed new solutions and digital technologies to enable their workers to continue to deliver service to their customers. 

In this round table the participants shared what changes are merely short-term adjustments or disruptions to the normal and which ones are longer-term innovations that are here to stay.

No surprise employee safety, compliance and remote service are high on the list of the more permanent changes. The underlying business issues were there all along, only Covid-19 amplified and accelerated the change.

What Covid-19 has also shown us, disruption has many forms. So better prepare to be agile and resilient. As a final thought: how is your organisation going to handle the backlog of push-out work orders? How are you going to prioritise while meeting your contractual obligations?

Recommended Maximize sessions:

  • Keynote: Making your Service Business Resilient with ServiceMax
  • Business Transformation: Listen to Your Assets: The Benefits of Using Asset Data for Business Outcomes

Recommended readings:

  • Transforming Field Service When the “Field” Has Changed (March 11th, 2021)
  • The Year Ahead for Energy: 3 Paths to Success Post-Covid-19 (March 9th, 2021)
  • 8 Considerations for Your Remote Support Program (February 4th, 2021)
  • How Will AR & VR Impact the Future of Field Service Management? (December 22nd, 2021)

The technician profile: changing role, changing skillsets – where do we find them?

Assets are changing. Service work is changing. The nature of customer relationships is changing. Has the technician skillset changed to match the evolution of service taking place? 

We ask a lot of our technicians. We ask them to be our brand ambassador. They want to be a hero on site. Maybe then best ‘gift’ we can give technicians is empowerment. To give them tools allowing them to engage with the right information at their fingertips. With a right balance between autonomy for the technician and control for the manager.

Is that possible? Sure. The discussion showed plenty of examples of how the combination of state-of-the-art service execution tools and empowerment drives adoption … and thus the projected business results. Once people see transformation in action, the mindset will follow leading to an intrinsic motivation.

Recommended Maximize sessions:

  • Keynote: Building Resilient Relationships. Being a Technician during the Pandemic
  • MaxTalk: Save my Bacon – Remote Assistant in the Field

Recommended readings:

  • 2021 Predictions for Chief Service Officers (December 15th, 2020)
  • Technician Advice to CSOs: 3 Interesting Takeaways from Our Inaugural Tech Talk Event (August 25th, 2020)

Enhancing the commercial maturity of your services business

Now most service organisations have a revenue target, we found it interesting to have a conversation on commercial maturity. You seemed to agree. We had a great turn out at our round table and engaging conversations.

Why is commercial maturity so important? Because margin contribution stemming from operational excellence is not enough. Organisations feel the pressure of margin erosion and commoditisation. In parallel there is a constant drive for growth. And with more vocal customers it is adamant to constantly ride the waves commerce.

We asked the participants to self-assess their current maturity using a poll. Defining a low maturity as a predominantly product focussed organisation selling services as an afterthought. On the other end of the scale, we positioned companies where both sales and service revenue generating activities are managed in unison over the life cycle of the product/ equipment/ asset.

To make the maturity assessment tangible and actionable we’d given the participants a simple calculation exercise. Suppose you have an installed base visibility of 100% and an attach rate of 100% ‘gold’ contracts. Meaning all installed products have an associated all-inclusive service tier. How much revenue would that amount to? Do we have your attention? 

Now compare this figure with your current services revenue. The goal of this exercise is to define the ‘gap’ and to use the gap as an instrument to drive your commercial maturity journey. 

Of course, we know that not all asset owners will buy the gold tier. More likely we have a mix of warranty, part sales, installations, break-fix, field change requests, inspections/ calibrations, preventive maintenance and availability services. Each of these services has a different revenue and margin contribution. If you want to maximize your revenue, you’ll have to revisit your current services portfolio and how you present these offerings.

Recommended Maximize sessions:

  • Asset360: How to Unlock New Revenue Streams with Warranty and Contract management
  • Business Transformation: How to Protect and Increase Your Service Revenue Stream with an Eye on Servitization
  • Business Transformation: How to Revitalize Your Service Portfolio for CEx and Growth

Recommended readings:

  • The key to Sales and Service working in collaboration (January 26th, 2021)
  • 5 Ways to identify new revenue streams in Service (November 24th, 2020)
  • Upsell leakage: Everything you need to know (November 19th, 2020)
  • How to sell Customers on the value of preventive maintenance (July 9th, 2020)

The installed base’s role in lifecycle management

Peter Drucker said: “if you can’t measure it, you can’t manage it”. We could say the same thing about the installed base. If you don’t know where your product is, in what condition and how it is being used, how can you excel in service? How can you serve asset owners over the lifecycle of the product?

A survey by Accenture stipulated that over the lifecycle of industrial assets approximately 8-12% of the cost is related to the purchase of the equipment. The rest is maintenance and operating cost. These numbers should convince any OEM to step up to the plate and offer life cycle services.

What do you do when you sell a significant number of units via the indirect sales channel, via dealers and resellers? Value chain actors that may shield their installed base data. The engineering change request may come to rescue. As OEM you have a legitimate reason to reach out to the asset owners, whether it is quality related or if the change enhances the capabilities of your product.

Recommended Maximize sessions:

  • Asset360: How to Unlock New Revenue Streams with Warranty and Contract management
  • Business Transformation: How to Revitalize Your Service Portfolio for CEx and Growth

Recommended readings:

  • 3 Steps to make engineering change management easier (March 2nd, 2021)
  • How to maintain and protect your brand as an OEM (December 17th, 2020)
  • Looking for Design-for-Service? Start here (December 10th, 2020)
  • How to sell Customers on the value of preventive maintenance (July 9th, 2020)

This article is published in ServiceMax Field Service Digital on April 15th, 2021

Developing Engineering Change Strategies for CX and Customer Engagement

Each time when you launch an engineering change (EC) campaign you’ll have to balance brand image, quality and cost. In my previous blog 3 Steps to Make Engineering Change Management Easier (FSD, March 2nd, 2021), I added two additional business drivers: customer engagement and upsell revenue. I promised to elaborate on EC strategies, on how to use the EC touch points to further your business objectives.

But first I want to say thanks to a reader who helped me frame the two different emotions associated with an engineering change: the ‘positive’ and the ‘negative’ engineering change.

  • Negative: the EC is triggered by a quality issue or a complaint.
  • Positive: the EC improves the specifications/ capabilities of the original product.

Does the emotion matter? Yes, it does and maybe it shouldn’t matter that much. Let me explain.

When the negative emotion is associated with cost and a perceived reduction of CX & brand value, its mitigation is deemed operational. Getting your act together. When using the EC as an instrument to exceed expectations, the positive emotion will trigger growth driven stakeholders to jump on the bandwagon. With a comprehensive EC strategy, you can nudge the negative to the positive side too.

“There’s no such thing as bad publicity” – P.T. Barnum (1810 – 1891) 

Creating a plan

Creating an engineering change strategy is a subset of product life cycle management. During the operational life cycle of a product many things can happen. Some of these occurrences are pre-conceived and/or planned. Some will happen ‘as you go’. Simply because it is nearly impossible to predict how a product will behave in each and individual use context.

Creating a plan is like preparing for the unknown. The good news is that the unknown can be moulded into a limited number of buckets:

  • The product does not deliver on its as-sold and nominal attributes
  • The product is used in a context beyond its nominal attributes
  • New product capabilities enhance the nominal specifications

For each of the three buckets you can create a communication channel with your installed base and define a follow-up workflow. As a potential response to each of the three buckets:

  • Document and investigate the gap, provide a product fix … or change the expectation.
  • Investigate the use context of the product and re-evaluate the product specifications. Advise on product replacement or product upgrade possibilities.
  • Filter the installed base on those customers that will perceive the enhanced specifications as a value add.

Each of these workflows impacts cost, revenue and CSAT. Most of all, you build a communication relationship with your installed base, managing customer experience over the life cycle … and beyond. Just imagine your EC strategy becoming the proactive/ predictive instrument to avoid unplanned downtime.

What does your customer buy and expect?

Words like strategy and lifecycle imply a longer timeframe. This requires us to revisit the original value promise made at point of sale. Is that promise a one-off or a longer-term commitment? The answer will impact your EC strategy.

If the sales value promise is a one-off, the customer buys the product as-is with an optional limited warranty. Because warranty is an integral part of the product sale, we need to define both coverage and period. Also, we must be mindful of expectations and regulations.

  • In Japan the phrase “Quality is included” drives EC and lifecycle services to high expectations with ample opportunities to monetise them.
  • In Germany the warranty construct is decomposed in two definitions “Gewährleistung” and “Garantie”. The former relates to a defect and/or violation of regulations, the latter is a voluntary value promise.
  • When you buy a product from a AAA-brand you’ll likely have a different lifecycle support expectation over a B-brand.

With the above components it becomes clear that you’ll need a product lifecycle vision with an EC strategy spinoff.

A steady flow of engineering changes waiting for a framework

Now, let’s expand the horizon beyond the warranty period. Your customer may have bought a product. What your customer needs is the output and outcome of that product, preferably over a longer period of time. Over that time entropy and technology advancement are the biggest drivers for engineering changes. 

Knowing you’ll have a steady flow of ECs you’ll need a framework to manage them. Even more so when we’ve learnt in the previous blog that ECs often occur in an environment of constraints. You’ll need to make choices of who gets scarcity first, knowing this will impact cost, revenue and CSAT. 

Scarcity is a multi-facetted ‘beast’. It can work both for and against you. Thus, one more reason to put a lot of thought into defining an EC strategy.

“There is only one thing in the world worse than being talked about, and that is not being talked about.” – Oscar Wilde

Every touch point is an opportunity

In the world of sales and engagement the mantra is: every touch point is an opportunity. Throughout the operational life cycle of a product there are many touch points. When you can explain entropy and technology advancement in its use context, when you have a compelling engineering change strategy and when you can embed that EC strategy in your service portfolio, then you’ll get the level of engagement and life cycle partnership you seek. Driving cost, revenue and CSAT to both party’s satisfaction.

This article is published in ServiceMax Field Service Digital on May 4th, 2021

How to Maintain and Protect Your Brand as an OEM

You make great products. You have a strong brand. But how do you maintain those products and protect your brand beyond the point of sale? What do you do when customers demand more through CX or regulators demand more through compliance or channels partners struggle to deliver consistent service? The good news is modern field service management systems provide you with the tools to manage and overcome these challenges.

Trending in 2021

At the close of each year, a lot of people ask me to make some predictions for the new year. Honestly, with some extreme disruptions in 2020, it is hard to single out a theme for 2021. Though I do see a consistent trend over the last decade. A trend that will very much drive the OEM transformation agenda: how do we extend our value proposition beyond the revenue of the product sales? Margin contribution on product sales is dwindling. Thus, it is logical that your CFO is eying service margins and tasking you with service revenue growth. So, let’s focus on two 2021 topics to achieve those goals.

  1. Improve your installed base visibility across all your sales channels
  2. Support your product throughout its life cycle

And by focussing on these two, you’ll get a lot of adjacent benefits too.

Step 1: Invest in Installed Base Visibility and Effective Channel Partners

To exert a maximum level of control over the value an OEM can provide to its customers, an OEM may have the ambition to own each step of the value chain. The commercial reality is that a network of partners and competitors is involved in the value creation. This may result in a battle over the ownership of the customer relationship. Especially when we consider the underlying paradigm: the one who owns the relationship owns the levers to CX and sustainable revenue.

The key enabler to value creation is your Installed Base Visibility. It is pretty straight forward. If you want to create value from the products you sell, you need to know where they are and how they are being used. Without visibility, your service delivery will be in the blind. Without a relationship, your revenue streams will be unpredictable.

We see more and more OEMs investing in installed base visibility. This starts with shifting from margin contribution through product sales to margin contribution through using the product.  The increased margin contribution pays for the investment and buy-in from the channel partners.

Are you curious about what installed base visibility brings to the bottom line? See what Schneider Electric was able to achieve here.

Step 2: Support Your Product Throughout Its Life Cycle

Who knows your product best? You, the OEM. You designed it and built it, so it seems you are best qualified to support its use during its life cycle. Hence the previous paragraph, you need to know where your installed base is and in what condition.

For each product, we know that the true test comes when it is used by real customers. No matter how well designed and built it is, actual customers seem to use products in more different ways than you have anticipated. Whether the feedback is coming to you via the quality department, service interactions, or through an autonomous engineering department, your products do get revisions and engineering changes.

Some of these changes are for liability and compliance. Others may enhance the function of the product, potentially driving more value. Thus, you have multiple reasons to reach out to your installed base. And when you do so, you want to track what portion of that base you have reached.

Two to Tango

The combination of installed base visibility and product life cycle support form an ideal tango to strengthen your brand. Though the commercial reality of your channel strategy may impact your ability to reach out to your installed base, asset-centric field service management tools make it much easier to visualize and manage your assets. Extending those tools to your channel partners will make it easier to share and grow the value creation for your customers.

Whether you decide to take tango lessons in 2021 or not, at least put some thought into the beauty and joy of the dance. I promise you; your customers will like it.

This article is published in ServiceMax Field Service Digital on December 17th, 2020

Measuring Satisfaction: read the comments

What is the ideal customer experience and when do you know you got it right? What should you measure and how should you act? In short: read the comments! As a bonus: do an e-NPS.

The real growth power of NPS is all in the follow-up

Chad Keck

At Maximize Chicago Stephan McPhee from MilliporeSigma and Coen Jeukens from ServiceMax engaged in a discussion with service leaders on the topic of CSAT, CES and NPS. In varying degrees, we all measure customer experience. Though the different metrics may cause confusion in what you actually measure and should do.

What is the ideal customer experience?

If we briefly put aside the metric and look at what (end) customers really want, two things really stand out.

  • Get what you Expect
  • Walk the Talk

The former means a customer is getting the value it has been promised, the latter ensures the delivery is done consistently and setup for repetition.

Different methods of measuring

To measure customer satisfaction three different metrics are in use. Each catering to a different aspect of satisfaction.

  • NPS: will you recommend my brand?
  • CSAT: are you happy with the transaction I just performed?
  • CES: how easy is it to do business with me?

At present the most popular metric is NPS. Aly Pinder from IDC Manufacturing Insights shared his observation that more and more organisations are leaning towards Customer Effort Score as it addresses the action to remove friction, alias dissatisfaction.

Perhaps what you measure is what you get. More likely, what you measure is all you’ll get. What you don’t (or can’t) measure is lost.

H. Thomas Johnson

Read the comments

Ultimately the actionable result of any satisfaction metric is the most important piece of the process. Throughout the discussion at Maximize the same phrase came back over and over again: “read the comments”.

The numerical value of a satisfaction measurement is single dimensional: it tells you “what” your score is and how it changes over time. The comments to the score tell you about the “why”. Often the comments contain “free advice” on how to remedy dissatisfiers.

In progressive organisations we see an embedded process to review the comments on a periodical basis, linked to their continuous improvement programme.

e-NPS

While most organisations have embedded customer satisfaction measurements in their modus operandi, a growing number of organisations is mirroring the NPS philosophy to their own employees.

Your own employees hold an invaluable wealth of improvement opportunities. Ideas to improve their own work and to be better equipped when dealing with customers. If you find a way to tap into this potential, you will see that happy employees indeed make happy customers.

Happy employees ensure happy customers. And happy customers ensure happy shareholders, in that order

Simon Sinek (leadership expert)

If you want to receive more insights into how ServiceMax embeds satisfaction measurements into every aspect of Service Execution, do contact us.

This article is published in ServiceMax Field Service Digital on November 14th, 2019

Mit Servicevertragspartnern ein konsistentes Kundenerlebnis sichern

Beim Aufbau und der Umgestaltung einer Serviceorganisation wird unweigerlich das Thema des Umgangs mit externen Dienstleistern und Partnern (Contractors) zur Sprache kommen. Ob es nun darum geht, zu skalieren, flexibler zu werden oder die Kosten zu senken – die meisten Diskussionen drehen sich um das „Wie“. Wie können wir eine Vielzahl potenzieller Partner verwalten und gleichzeitig die Kontrolle über Kunden und deren Erfahrungen behalten? Und was können wir tun, um die Chancen einer Zusammenarbeit zu maximieren und die Risiken zu minimieren?

Konfigurierbares Ökosystem

Um das richtige Gleichgewicht zu finden, definieren wir in der Regel zunächst Begriffe wie Outsourcing / Insourcing und (Sub-) Auftragnehmer / Partner. Je nachdem, ob Sie ein OEM (Original Equipment Manufacturer), ein Third Party Maintainer (TPM), ein Anlagenbetreiber oder ein Facility Manager (FM) sind, ergeben sich unterschiedliche Auswirkungen.

Wenn Sie also Vertragspartner zu Ihrem Ökosystem hinzufügen möchten, müssen Sie die Regeln für die Einbeziehung klar festlegen und diese mit unterstützenden Tools und Prozessen festigen. Diese Regeln können an Bedingungen geknüpft sein, die je nach Region, Produktgruppe, Art des Auftrags usw. variieren.

Partner einstufen

Ähnlich wie bei der Beziehung zu Ihren Lieferanten werden Sie wahrscheinlich ein unterschiedliches Maß an „Nähe“ zu Service-Vertragspartnern haben. Diese Beziehung ist definiert durch die Verfügbarkeit von Partnern und deren Wettbewerbsposition gegenüber Ihrem Endkunden.

Zudem bieten Servicepartner heute die Flexibilität, verschiedene Servicemodelle umzusetzen: 
Partner

  • verwenden Werkzeuge und Prozesse von einem OEM
  • bringen ihre eigenen Geräte in die Prozesse des OEM ein
  • verwenden ihre eigenen Tools und Prozesse – Arbeitsaufträge werden als Blackbox eingeplant
  • verwenden ihre eigenen Tools und Prozesse – Aufträge werden mit vollständiger Transparenz eingeplant

Diese Flexibilität erlaubt Ihnen, Ihre Partner gezielt so einzusetzen, dass Sie mehr Kunden besser bedienen können.

Kundenerlebnis messen

Sie haben nun mehr Flexibilität, Servicepartner zu nutzen, wie können Sie dennoch das Kundenerlebnis steuern? Einige unserer Kunden wünschen eine konsistente Servicebereitstellung, ohne dass der Endkunde weiß, ob der Service von ihrer Organisation oder von einem Partner erbracht wird. Andere Kunden möchten die Unterschiede zwischen den Serviceleistern hervorheben und dies als Wettbewerbsvorteil nutzen.

Um erfolgreich das Kundenerlebnis zu messen, müssen eine höhere Sichtbarkeit geschaffen, die Performance der Serviceleistungen gemessen und einheitliche KPIs für alle Serviceerbringungen definiert werden. Wenn Sie Daten gemeinsam nutzen, ohne über deren Interpretation „verhandeln“ zu müssen, können Sie Ihre Geschäftsziele an den Geschäftszielen Ihrer Servicepartner ausrichten. Infolgedessen gewinnen Sie, Ihr Contractor gewinnt und Ihr Endkunde gewinnt.

Partner messen

Abgesehen von strategischen, kaufmännischen und technischen Aspekten ist die Steuerung eines Servicepartners wie die Steuerung der Serviceerbringung. Bis zu einem gewissen Grad sollten Sie die Arbeit externer Ressourcen auf ähnliche Weise messen wie die Arbeit Ihrer internen Mitarbeiter. Ihr Endkunde soll das erhalten, worauf er Anspruch hat, gleichzeitig möchten Sie eine angemessene Marge erzielen.

Da Servicevertragspartner zu marktüblichen Konditionen arbeiten, sollten Sie sich auf die folgenden drei Messgrößen konzentrieren, da diese die Kundenerfahrung, die Serviceerbringung und die Leistung der Auftragnehmer am unmittelbarsten beeinflussen:

  • First-Time Fix: Ist die Servicequalität gut, wurde das Problem sofort behoben?
  • Mittlere Reparaturzeit: Wie lange dauert es, bis das System wieder verfügbar ist? 
  • Net Promoter Score: Ist der Endkunde mit dem Service zufrieden?

Why Service Leaders can’t overlook Contractor Management

When building and transforming a service delivery organization, inevitably the topic of dealing with contractors and partners will come up. Whether the goal is to scale, to be more flexible or to reduce cost, we find most discussions revolve around the how. How do we manage a plethora of potential partners while maintaining control of customers and their experiences?

Our customers often say that in today’s competitive environment it is not a matter if they should work with partners, but how to go about it. Dealing with partners is a commercial reality whereby those partners can represent both an opportunity as well as a threat. What do we do to maximize the opportunity and to minimize the threat?

Configurable Ecosystem

In order to strike the right balance, we typically start by defining terms like outsourcing/insourcing, and (sub)contractor/partners. There are different implications depending on whether you are an original equipment manufacturer (OEM), a third-party maintainer (TPM), an asset operator or a facility manager (FM).

So, if you want to add contracted partners to your ecosystem you have to clearly set the engagement rules and solidify them with supporting tools and processes. Above all, our customers tell us these rules are conditional. They may differ per geography, per product group, per job type, etc.

Tier your Partners

Similar to the relationship you have with your suppliers, you will likely maintain diverse levels of “closeness” with third-party partners. This is defined by the availability of partners and their competitive position in relation to your end customer.

 In the past we’ve seen that once you’ve found a partner that also might work for other organizations, you’ve entered into the “battle” of whose tools and processes to use. Today, we see that our customers are asking for tools and processes flexible enough to cater to various models:

  • Contractors use tools and processes from an OEM
  • Contractors bring their own devices and hooks into the OEM’s processes
  • Contractors use their own tools and processes, and jobs are dispatched as black box
  • Contractors use their own tools and processes, and jobs are dispatched with full visibility

Having this flexibility at your fingertips allows you to tier your partners and leverage your ability to serve more customers better.

Controlling the customer experience

With the increased capability to leverage contractors in various configurations, how do you manage the customer experience? Some of our customers want a consistent service delivery where the end-customer is oblivious to whom the delivering entity is: your internal organization, or a contractor or subcontractor. Other customers want to emphasize the differences between delivery entities, using it as a competitive advantage.

 One key to managing the customer experience is creating visibility, measuring performance and managing KPIs across all delivery entities. Sharing data points without having to “negotiate” on their interpretation will allow you to align your business objectives with your contractors’ business objectives. As a result, you win, your contractor wins and your end-customer wins.

Controlling contractors

Apart from strategic, commercial and technical aspects, controlling a contractor is like controlling service delivery. To a certain degree, you should measure work performed by external resources in a similar fashion as jobs done by your own internal employees. You want to ensure your end-customer gets what he or she is entitled to while you make a decent margin.

As contractors operate at arm’s length, consider focussing on the following three metrics as they have the most direct impact on customer experience, service delivery and contractor performance:

  • First-Time Fix: Is the quality of service good, has the problem been solved right away?
  • Mean Time to Repair: Is the delivery done in a cost efficient way?
  • Net Promoter Score: Is the end-customer happy with the service delivery?

Living apart together

Working with contractors is a bit like living apart, together. You have both overlapping and differing interests. By bringing the conversation to the “how to” level you can remove a lot of threats and weaknesses and focus on the strengths and opportunities. In the end, we all want to serve more customers, better.

This article is published in ServiceMax Field Service Digital on September 4th, 2020