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January 31, 2020 | 4 Mins Read

What to Expect when you’re Expecting (Your Employees to Quit)

January 31, 2020 | 4 Mins Read

What to Expect when you’re Expecting (Your Employees to Quit)

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By Tom Paquin

Back when I was an industry analyst, I ran a study to benchmark the strength of the service workforce. Through my research, I discovered that service companies expect nearly half of their service workforce to quit in any given year.

We could easily spend hours speculating as to why that is, and there are certainly some identifiable trends, like an overall aging workforce, that help explain these numbers, but the underlying truth is clear: Service companies expect to have to re-train half of their employee base.

It may seem like the logical approach is to tackle these issues as they arise, but forward-thinking firms know that’s a losing battle. Building a new employee base on the foundations that caused half of your employees to leave is not the answer. If you’re in a position where you’re losing somewhere more than 25% of your staff every year, there needs to be a fundamental shift in the way you hire, promote, and retain your talent.

Fortunately, there’s some truly inspiring stories across the industry of companies and individuals who are finding ways to rethink their hiring and retention practices. We’ve discussed this issue many times before, and from that, we can start to build a playbook for keeping your company together. Here are some key recommendations to help mitigate technician churn:

Consider your job listings carefully. What are the requirements for an entry-level technician? Do you expect to pay a new tech $30K, and also expect them to have three to ten years’ experience? You need to work with the workforce that’s actually out there. Back when I was sourcing for new IT technicians, I would call anyone who could spell “resume” correctly, and I’d set up an in-person with anyone who could tell me the difference between a hard drive and RAM. In IT service management that works, but it wouldn’t work in heavy equipment manufacturing, where you need to come to the table with a base set of skills. For that, it makes sense to target your listings towards the appropriate technical schools and apprenticeships programs. Not enough students enrolled in these programs? Well…

Build an apprenticeship program. Offer a one-year apprenticeship to, for instance, graduating High School seniors. Teach them the skills they need, and at the end of the year, make an evaluation with them about whether or not they should continue. Research shows it’ll be about 50-50, but you’re growing a crop of talent who won’t leave after another year, and after five years, your talent pool will be overflowing.

Hire for a mindset, not a skillset. In his two podcast appearances, Roy Dockery has discussed the great work he’s done hiring armed service veterans to technician roles. He, at vet himself, understands that skills and tools can be taught, but the right constitution is intrinsic to the right employee. Take your five highest-performing technicians and think about what makes them who they are. Ask them for referrals. Bring them into the hiring process. Consider their background. The goal here is to foster high performers. You won’t win every time, but if you are thoughtful about the trends that define a good, long-lasting employee, you’ll start to see positive change.

Consider the Technician Journey. Are your technicians happy? If you think that’s a silly question, guess what? You might be the reason why they’re leaving. Any job requires fulfillment to foster retention. Are your metrics exclusively punitive? Do you positively incentivize around things like NPS scores and upsells? What does the technician career path look like? To that end…

Consider a mentor program. One thing that I will always believe is that when you offer someone responsibility and respect their knowledge, they’ll step up to the plate. Therefore, the benefits of a mentor program organically extend to brand new employees, who learn the ropes (and the politics) of their job, and helps to inspire tenured employees to think about their career in new ways and sell it to a new audience.

Think carefully about technology. What a vague statement, but hear me out—Technology cuts both ways. For instance, there are so many great knowledge management utilities meant to bring technicians up to speed, which is great if you’re still seeing high turnover, but alternatively, throwing new service technology at technicians without seriously considering how they actually do their job increases the likelihood of losing otherwise strong talent. It’s a delicate balance, certainly, but it’s one that the right technical partner can help you manage with ease.

With anything, technician retention isn’t a one-and-done prospect, and a consistent review of hiring and retention practices will mean that you continue to mitigate turnover with smart business decisions. With the right plans in place, you can bring in new blood that improves your turnover rate, but more importantly, your overall business.

January 29, 2020 | 1 Mins Read

An Overlooked Aspect of Customer Engagement

January 29, 2020 | 1 Mins Read

An Overlooked Aspect of Customer Engagement

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Sarah talks with Linda Formichelli, Founder and Creative Director of Hero’s Journey Content for some practical tips on how best to engage with your customers and prospects using content marketing.

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January 27, 2020 | 6 Mins Read

Cubic Transportation’s Outcomes-Based Service Success

January 27, 2020 | 6 Mins Read

Cubic Transportation’s Outcomes-Based Service Success

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By Sarah Nicastro, Creator, Future of Field Service

Service organizations across the globe are painstakingly aware that the historical break/fix service model is no longer satisfying customers. Rather, customers are demanding outcomes – uptime, peace of mind, and results. The adaptation necessary to meet these ever-increasing demands is no small feat, which is why we see plenty of companies struggling to evolve. There are those, though, which have tackled this transformation with steely resolve and are leading the charge in delivering what today’s customers want. Cubic Transportation Systems is one such example.

Cubic Transportation Systems (CTS) produces and markets public transport fare reading and payment systems for the transportation industry around the world. If you can’t envision what this means, think about the Oyster card used within London. From the moment you purchase the Oyster card, to using the ticket vending machines to add credit, use the card to go through the gates, have the right fare taken from your account, and the smart calculations done in the back office so you are capped the right amount – all of that physical technology and software processing is done through the CTS system. . “Our history of creating and implementing payment and information technologies for the world’s most renowned transportation authorities and operators has taught us that to promote progress, you must create collaboratively – with your technology partners and your customers – and foster a culture of innovation within your company,” says Matt Cole, President of CTS and Sr. Vice President of Cubic Corporation. “We are committed to not only helping shape the transportation landscape, but are prepared to lead, envision and enable industry disruptors. Our technology platforms are designed to factor in the unknown, allowing our systems today to be relevant years down the road.”

This type of company mission and culture promotes the type of transformation service organizations are faced with conquering today. But while company-wide buy-in on this philosophy is a great head start, it still doesn’t make the journey easy. When you look at the practical illustration of what it takes for CTS to deliver this sort of innovation to its customers, it takes a significant amount of strategy, enablement, and execution to bring that commitment to life. Mike Gosling, IT Service Platforms Manager at CTS has been instrumental in the company’s journey to outcomes-based service.

Before Migration Comes Mindset

Success with outcomes-based service starts with mindset. CTS recognized that its customers were committed to improving the experiences of their customers, which put pressure on CTS to find ways to deliver even higher levels of service – or outcomes. Rather than the historical “call when it breaks and we’ll come fix it,” it becomes a matter of almost-constant uptime. Rather than push back on this demand or remain blissfully ignorant to the shift in customer expectations, CTS adopted a positive mindset and set out to determine what needed to evolve within the organization to be able to meet these needs.

This meant letting go of legacy thinking, and legacy processes. “It’s fairly straightforward to examine your processes and uncover what needs to change, but you also have to consider that you need to examine the legacy thinking that exists within the company as well – that is harder to identify and also harder to change,” says Gosling. “It’s just human nature to want to stay within your comfort zone, and it takes effort to take your entire workforce along on this journey and help them understand why and how things are changing and get them to buy into the mission.”

Gosling points out that while the process of weeding out legacy mindset can be challenging, it’s imperative to success. “Take the time to get to the root of what they’re thinking and saying – overcome their concerns rather than dismissing them,” he says. “It takes bravery to overcome this legacy thinking, but you have to be brave and work through it or it will hold you back from your future.”

Setting and Sticking to Success Criteria

Once you feel the right mindset is shared among the entire workforce, the next step is to create very clear success criteria so that you can gauge your success or failure in providing the outcomes you’ve promised your customers. “If you don’t have clarity on what success looks like, you’ll never get there,” says Gosling. “The criteria need to be very specific, and realistic but challenging.”

When CTS embarked on the outcomes-based service journey with its customer Transport for London (TfL), the local government body responsible for the transport system in Greater London, the process for setting these success criteria was to carefully examine the service contracts, top to bottom, and set the criteria for hitting those requirements. In this case, the number one criteria is system uptime, followed by three others.

“Once your criteria are set, it is imperative to stick to it – use it as your why,” says Gosling. “There will be plenty of scenarios in which you’ll be tempted to veer off course and make decisions that aren’t tied to the success criteria, but you have to remember that if you set your success criteria well, anything that deviates is a distraction from what matters most.”

Selecting the Right Toolset

CTS knew it couldn’t deliver the outcomes customers like TfL expect without relying on technology. “Technology is the path to delivering outcomes-based service,” says Gosling. “Adding field engineers to meet the demands of outcomes is not reasonable – technology is critical in today’s service landscape.”

To achieve its success criteria, CTS relies on IFS Field Service Management (FSM) which manages work orders, parts and assets to contracts, warranty, invoicing and billing. FSM gives CTS much needed visibility of what’s being done in the field. CTS also uses IFS Planning & Scheduling Optimization (PSO), a real-time scheduling and optimization software that uses AI and advanced algorithms to deliver the optimum schedule. “PSO is a phenomenally powerful tool,” says Gosling. “It is key to use delivering the outcomes our customers want in the most efficient way possible.”

CTS is also working to integrate Dexda, a machine learning-based event management tool, with FSM and PSO to incorporate IoT data from its equipment and move to more predictive service. “This will allow PSO to respond to events we think are going to happen based on empirical learning,” says Gosling. “Beyond enabling predictive service, however, it will also provide a wealth of valuable business insight on our products that can be fed back to engineering.”

3 Tips for Your Journey to Outcomes

On the journey to outcomes-based service, Gosling has learned three lessons that serve as valuable advice for those on this path. First, remember the importance of change management. This comes at the beginning of an initiative, but all along as well. With PSO, for instance, it was important for CTS to providing ongoing coaching and change management. “With a tool like PSO that self-learns and adjusts, there are times that are gut instinct for a scheduler that’s not accustomed to the technology to want to intervene,” says Gosling. “You have to manage this change and fight off those urges when they aren’t necessary. When manual intervention is necessary, you need to handle exceptions with consistency and document the outcome so that it can be factored into the workflow.”

Second, don’t try to avoid mistakes; they propel you forward. “When you’re innovating, mistakes will naturally occur,” says Gosling. “Making decisions means making mistakes. Mistakes are a learning opportunity that all too often are avoided when they shouldn’t be. As a leader, it’s important to set the example by owning your own mistakes and communicating clearly with your team about what happened, what was learned, and what will be different next time.”

Finally, avoid “that’ll do” thinking at all costs. “This journey is one of continual improvement,” says Gosling. “If you pop the champagne and put your feet up as soon as you hit your success criteria, you’ll fall back below quickly [or you need more challenging success criteria]. When you master one area, you keep watch of it and move on to another. You constantly assess where you are and where you’re going next, and out of this process is where the new innovative ideas are born. But you have to be in a constant state of assessing and looking ahead.”

Since CTS started its journey to delivering outcomes, and with its focus on mindset, metrics, change management, utilizing technology, and continual improvement, the company has improved uptime by 20 percent. Delivering outcomes is the future of field service and it’s inspiring to see a company that has successfully tackled such a major transformation.

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January 24, 2020 | 4 Mins Read

The Road to Servitization in Product-Oriented Businesses

January 24, 2020 | 4 Mins Read

The Road to Servitization in Product-Oriented Businesses

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By Tom Paquin

Recently I was hit by a peculiar targeted advertisement: A major automaker’s car subscription service. My interest being piqued, I clicked on the ad. From where I was standing car subscription services have always existed, and were called leased vehicles, and after some puttering around their very snazzy new website, I inferred that at its heart, this “subscription” was a millennial-oriented rebranding of that concept.

As I dug deeper, though, it became increasingly clear that that was only partially the case. In addition to the car and registration that typically comprises the totality of a lease agreement, this car company’s plan included:

  • Guaranteed pricing
  • Insurance
  • Vehicle maintenance
  • Annual upgrades

Feeling aspirational, I selected a luxury vehicle, and was given a monthly payment that, when taking into consideration the fact that you’re getting insurance and service included, with the option to upgrade after 12 months, seemed like a perfectly reasonable price.

We can discuss the environmental ramifications of this all another day but from an economical sense, this seems like a win-win. Customers who want it get a virtually worry-free car, no negotiations, no tire replacements, no insurance wrangling, and annual new car smell. The automaker gets an engine for customer loyalty, service control over their own vehicles to ensure consistency of parts and labor, and the ability to provide services like insurance through a third-party at bulk pricing, thus forming a key partnership.

This, at its heart, is true servitization. Sure, the car company is packaging and delivering a commodity, but the value is in the feeling of security that accompanies the sale. Car buying tops every list of most stressful purchase processes. Alleviating that stress is a service with minimal overhead and maximum value. It is servitization at its most effective, and if executed as well as it looks, could keep customers coming back for a long time.

If we can make servitization work with cars, we can make it work with virtually any industry, but it’s not without its caveats. There are a lot of places along the value chain where things can go wrong. Any industry that combines a product with service needs to think very carefully about how it manages every aspect of its brand. Here are some very important questions to ask as you start to consider servitization.

Are products delivered through dealer networks?

Let’s use an iPhone as an example, here. iPhones are sold through Apple retail, where the entirety of the sales and service process can be curated. iPhones are also sold through cellular providers, big box, and electronic retailers. When rolling out its servitized plan for iPhones, Apple had to decide whether to offer the iPhone upgrade program exclusively at its own retail stores, or externally, and chose to keep the entirety of the process in-house. This was a safe, if unambitious move.

Some product companies don’t have the luxury of a direct-to-consumer presence, though, so they have to work with dealer networks not just for sales, but also for service. Because of that, standardization of the parameters of service contracts, parts management, and service delivery are imperative to getting servitizaton right. Does this mean making all of your dealers adopt the same service management platform that you have? If it’s an automaker, then possibly, but if it’s Best Buy, then you’ll need to think about how to approach that in order to centralize data. Work with your implementation partners on the appropriate plan.

Is the service managed centrally, is it franchised, or is it done independently?

Just like the products themselves, it’s important to consider how the actual service system with which you work is handled. If you have a service infrastructure in place, is it self-sufficient, or is it bolstered by independent contractors? Do you want independent contractors involved in service delivery? If not, how can you incentivize consumers to go to first-party service centers?

Alternatively, if you have nothing but independents, do you have the means of managing them internally? What utilities are you using to facilitate that process? Do customers manage service and assets internally, and are assigned external service workers, or does information live in dozens of separate systems? There’s obviously a right and a wrong way to do this, and the tools are out there to centralize all of these processes. You owe it to your brand to get it right.

What does the long-tail service lifecycle look like?

This is where you make the business case for servitization. Perhaps you have an extremely long product lifecycle. We see businesses with products from 1955 in their clients’ possession, which completely changes the meaning of an upgrade cycle. In an instance like that—what are the service touchpoints, and how do you appropriately monetize those touchpoints?

In businesses with shorter product lifecycles—one to ten years—are there opportunities to keep customers tied to your ecosystem in the long-term? Many businesses have rightly concluded that service contracts represent a swift, easy, and cheap way to do just that, but you can’t just deliver service, of course. The service needs to be good.

It’s unclear whether this automaker will succeed with its all-inclusive approach to car buying, but it represents a pretty interesting test case in the way that businesses are thinking about products for their consumers. Especially in low-margin industries, service bundles provide the sort of profit cushion that could really make a difference. And when executed well, servitization can be what sets your business apart.

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January 22, 2020 | 1 Mins Read

Driving Diversity in Field Service

January 22, 2020 | 1 Mins Read

Driving Diversity in Field Service

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Sarah is joined by Sara Gleave, IT Project Manager at Morris Jenkins to discuss the company’s successful approach to creating greater diversity among its workforce.

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January 20, 2020 | 4 Mins Read

The Hurdles To Achieving AR ROI In Field Service

January 20, 2020 | 4 Mins Read

The Hurdles To Achieving AR ROI In Field Service

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By Sarah Nicastro, Creator, Future of Field Service

According to ABI Research, the total augmented reality market is estimated to reach over $100 billion by 2024, at an average CAGR of 75 percent. The research firm says, “The mainstay early adoption verticals like Manufacturing, Logistics, and Energy are still showing impressive growth, while newer verticals like healthcare, media & entertainment, and retail/commerce/marketing are the fastest growing.”

Personally, AR is one of the technologies I find most exciting and compelling for service organizations because I can so easily visualize the problems it can solve. In other words, its value proposition is clear to me (and countless others). Take the talent gap, for instance, and think about how AR can help organizations to more quickly and efficiently train and support limited resources. Consider the value of remote resolution, and how AR can be used either internally or with customers to reduce the need for truck rolls in many cases or, at minimum, ensure better preparation when a tech arrives on site. Even knowledge management – being able to capture the information exchange in the AR sessions and catalog that as shared knowledge is incredibly valuable.

While I’ve talked with numerous service leaders having success with AR within their respective organizations, what has surfaced is the reality that there are a few shared hurdles that need to be overcome in order to attain ROI and reap the full rewards of AR. Here are four common hurdles that those I’ve interviewed have experienced and would caution you to expect and preparer for as you implement AR:

Older workforce resistance. The reality is, any new tool can be met with skepticism and hesitance by those workers set in their way. But I’d say a tool like AR has a buzz about it that can emphasize these emotions in some of your older workers. Those I’ve interviewed have reported some significant challenges with getting older workers on board with using AR. Overcoming this hurdle comes down to three things – having a proactive change management strategy in place, encouraging an open dialogue with these workers as they become familiar with the tool, and ensuring you have measures in place to hold your workers accountable for using the technology.

Connectivity issues. This is a hurdle I am sure is being addressed by those providing AR technology, but a recurring issue among the folks that have adopted the technology is experiencing connectivity problems. This ranges from not being able to initiate sessions to sessions being interrupted, but the end result is that it can be a very frustrating experience for the employees (and customers, if you are using this technology with your customers) and contributes to the adoption issues discussed above. I’d recommend you test, retest, and keep testing connectivity during your trial and pilot to ensure that the solution works to your expectations.

Battery life issues. Some of the folks I’ve talked with are using AR for very short trouble-shooting chats (three to five minutes) and others for longer support calls (20 to 25 minutes). Those that are using AR for longer durations have reported that the sessions kill the battery life of their mobile devices. This will present varying degrees of issue depending on how many opportunities your technicians have to charge their device throughout the day, but again is something you should test and bring up to your AR provider if you’re researching or evaluating this technology.

Wearables need work. Most of the companies I’ve spoken with about AR are using a smartphone or tablet for sessions, while many are interested in or considering moving to wearable devices. One of the service leaders I interviewed had tested different wearables and explained that while the AR solution works quite seamlessly on a smartphone, it isn’t as smooth on the wearables – that there’s still some work that needs done for the application to have the same impact on a wearable as it does a smartphone. I am certain progress is being made with this daily, but it’s important to identify the preferred device for your use case is and test it thoroughly.

Despite these hurdles, the value of AR in field service is clear, and that is echoed by those I’ve discussed challenges with.  All the people I’ve spoken to about AR use feel it is worthwhile despite some of the stumbling blocks. It is always worthwhile, though, to discuss both sides of the coin when it comes to technology – the value it will provide, but the fact that it is never a seamless journey. If you are looking to deploy AR, these issues are worth investigating and discussing during your evaluation.

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January 16, 2020 | 4 Mins Read

Avoiding Reckless Tech Adoption

January 16, 2020 | 4 Mins Read

Avoiding Reckless Tech Adoption

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By Tom Paquin

As someone who cooks a lot at home, I have been trying to improve my culinary chops for quite a while now. Between binging on cooking YouTube channels (Highly recommended: Bon Appetit) and simply getting creative with ingredients, I think that I’ve built up a strong home cook aptitude, and have proudly expanded my repertoire (and my palate) with new spices and ingredients. One thing that practice has taught me is the tenuous balance of done-ness. There’s a lot of precision that goes into the balance of overcooking and undercooking. Once something is on the skillet, the clock starts ticking. When do I flip this? When do I add the garlic? When do I take it off the heat?

The preparedness of a business for a new technology requires an intimate understanding of a similar balance. Leave your business in the oven too long without adopting the right tech, and your competitors will have surpassed you, your infrastructure will have become too rigid, and your customers will move onto someone who delivers more. We all know that, though, and talk about the dangers of resting on your laurels quite a bit. What happens, though, when you adopt a technology before your business is ready for it?

I discussed an example of this a few weeks ago with a service leader who preemptively deployed augmented reality tech without properly addressing infrastructure challenges, leading to the tech sitting uselessly on a shelf. In the inverse, though, I was talking to a service leader a few weeks ago who had yet to adopt IFS Lobby, a dashboard utility that’s part of the IFS service management platform, and asked him why he hadn’t yet.

“We need to explore every avenue before adopting any new system,” He said. That’s fine, of course, but had they explored any avenues yet? There’s ultimately no difference between technology you own sitting unused on a shelf and technology that you have the capabilities to use but refuse deploy. Both are useless. So, with any new technology, how do you know when your business is ready?

No two businesses are the same, of course, but based on what I’ve seen, when it comes to successful adoption, there are a few steps you can take to know you’re making the right move at the right time.

Hear from reference customers. We all want to be trailblazers, but the fact is that most technology advancements have been adopted in one way or another before you considered it. In service, what often happens is that technology saturation happens in sales, retail, or some adjacent industry, or in a disruptive tech play, which sets the standards that are adapted and iterated upon in a service environment. Find those customers and hear their stories. Look not just at the value, but at the best practices, at the initial legwork that goes into adoption, and, most importantly, where things went wrong. Best practices are often built upon mistakes. You can make them yourself, or you can learn from those who came before you. Save yourself the headache and learn from your neighbor.

Take stock of your digital inventory. This goes without saying, but there are a lot of digital switches at play in the modern enterprise, and the data collected from them, their functionality, or their output could be a key component that folds itself into a new technology adoption. Understand that technology mix, and whether or not any pieces are missing. Key at this step as well is looking at the software that will sit around your new tech purchase. Does everything speak a common language? How difficult will integration be? How will it impact or enhance the effectiveness of this software? Often these questions will come from your references, or from your own team, but often as well, they’ll come from the below.

Consult the experts early. Whether it’s a third party integrator or a branch of the company whose tech you’re buying, start asking—and getting answers to—"into the weeds” questions very early on in the process. This is pretty standard practice, of course, but this is frequently saved for the point when organizations are ready to adopt a technology, rather than when they’re evaluating if they should adopt a technology. At both stages, it’s easy to get handed a laundry list of performance gains, when really, you should be equally as interested in understanding how something actually works, and what the change management processes will actually be. If the people you’re working with can’t get you those answers, then it might be too early, or you should find a company that does.

Unlike business, there’s one thing that you can do to get the perfect meal, and that’s practice a lot, knowing that you might end up with the odd turkey with pink in the middle (apologies to my poor wife, who was a great sport during my trial attempts to modernize Thanksgiving). Of course with service, you can’t practice the adoption of a new technology, because each new technology is its own dish. For that reason, it needs to be more like reading a recipe. Keep a close eye on the directions, and make sure that you have all the ingredients before the food hits the pan.

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January 15, 2020 | 1 Mins Read

Success Criteria for Digital Service Transformation

January 15, 2020 | 1 Mins Read

Success Criteria for Digital Service Transformation

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Hilbrand Rustema, Founder and Managing Director of Noventum Service Management shares with Sarah his observations based on work with hundreds of clients of what it takes to achieve true digital service transformation.

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January 13, 2020 | 6 Mins Read

A Look at Field Service in 2020

January 13, 2020 | 6 Mins Read

A Look at Field Service in 2020

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By Sarah Nicastro, Creator, Future of Field Service

Field service is evolving enormously in recent years and technology and customer expectations will continue to advance just as quickly. Twenty years ago, field service may have been centered on break-fix repair, but the velocity now is towards long-term, contractual arrangements that are more satisfying for the customer and more lucrative for the service provider. Transformational technologies can enable whole new revenue models that make field service organizations stickier and more intimate with their customer even while generating more value. Here are four ways leading service organizations are adapting.

Prediction 1: Outcomes-based service takes hold

We will see more companies selling annual maintenance contracts. These contracts are attractive because they give a field service organization predictable revenue and demand and can deliver high margins.

For decades, product-centric businesses have been transitioning towards servitizing what they sell. First it was the addition of a warranty and the availability of after-market parts. Then it was reactive field service or depot repair. As early as 2018, IFS data suggests that 62 percent of manufacturers were already pursuing some form of aftermarket revenue. But manufacturers are now adopting more advanced forms of aftermarket service, with 16 percent of respondents offering maintenance contracts with specific service-level agreements (SLAs).

It is notable that modern customers not only demand a better service experience, but a holistic outcome. They expect to be left feeling positive as well as have their specific issue remedied. Technology is a mechanism whereby this change can be implemented, but nobody should overlook the people element as well.

I predict that that while 16 percent of manufacturers were involved in service contracting in 2018, that number will reach 25 to 30 percent in 2020.

Complete Servitization

The move towards servitization in most cases will deliver value-added revenue on top of product sales. In some cases, where it is attractive to the consumer, a product may be completely servitized, and the end user pays for metered usage or other metric captured in real time. In the 2018 IFS data, only 4 percent of manufacturers were fully servitized, including companies from the medical device, metal fabrication and oil and gas industries.

For customers who want to push enterprise risk off on their vendors, servitization will be an attractive way to buy. But actually realizing a profit on these contracts poses some significant management and enterprise software problems. When the service agreement is sold, a company will be committing to deliver against a contract that they could make or lose money on for years. Executives will need to make sure they have adequate what-if-scenario planning capabilities to enable them to deliver quotes that are competitive with minimal risk.

Companies can turn their data into a strategic tool that facilitates service sales while improving the customer experience. For this shift to be successful for companies, they’ve had to put some foundational technologies in place. Research IFS and Future of Field Service recently conducted with Bill Pollock of Strategies for Growth shows that outcomes-based service operations rely on the foundation of the service management platform, ERP, predictive maintenance, and IoT in particular.

More than half of respondents were running some type of enterprise system of record that handled the core service transactional business

54 percent are running their service business on a “Dedicated Service Management platform” like field service management (FSM) or enterprise asset management, just ahead of enterprise resource planning (ERP) at 50.8 percent

6 percent said they were using software for predictive maintenance and 42.8 percent were leveraging data from the internet of things (IoT)

With these tools in place, I forecast that an increasing emphasis on complete servitization, and that in 2020 we will see the percentage of manufacturers selling products by subscription or metered use will surpass 10 percent (from 4 percent in 2018).

Prediction 2: Digital Transformation Gets Harder Before It Gets Easier

People use the term “digital transformation” to sell any number of technologies, but we are dealing here not with a technology that can be bought but a fundamentally different way of looking at and doing business. The truth is that, to do it properly, it is a complex journey for service organizations and one that involves a departure from siloed operations, legacy tools, and outdated business processes. The change management obstacles that surround this are many, as individuals can find the old ways comforting even as the competition is overtaking a business.

What we have seen so far is rollout of transformational technologies at the edge. We track our field technicians’ location through IoT. We schedule them using AI. We may have an AI chatbot fielding inquiries online. Maybe we have some AI functionality in our inventory management processes. We’ll continue to see point solutions using AI and IoT. Where we are going next, though, is the introduction of AI in particular to the front office and administrative processes.

In its “Top Predictions for 2020” report, Gartner said: “Through 2021, digital transformation initiatives will take large traditional enterprises, on average, twice as long and cost twice as much as anticipated. Large organizations will struggle with digital innovation as they recognize the challenges of technology modernization and the costs of simplifying operational interdependence. Smaller, more agile organizations, by contrast, will have an opportunity to be first to market as larger organizations exhibit lackluster immediate benefits.”

History is littered with companies that couldn’t change as they needed to: Kodak in the face of digital photography, Blockbuster Video in the face of servitized and downloadable media. Today, we are at a point where disruptive technologies are embedded at the tip of the spear of forward-thinking service organizations. IoT sensors capture condition-based maintenance information, or an AI algorithm adjusts the field service schedule in real time based on constantly changing conditions.

In 2020, we will see more companies adopt these disruptive technologies in customer and service-facing settings. But I believe we will also see enterprise software vendors move further towards AI-driven automation of the front office in areas like service finance, inventory management, what-if scenario planning and customer interaction. And those who adopt AI as part of a commercial-off-the-shelf solution will win the race against those who take a go-it-alone approach.

Prediction 3: IoT Grows Up and We’re Left With All The Data

With more and more organizations saying they have some degree of remote connectivity for their assets, their drivers, and their parts, IoT is now mainstream. We are collecting large amounts of data and can now develop and apply analytics.

In our study conducted with Strategies for Growth, the biggest area of implementation interest across all industries is in predictive and prescriptive maintenance. Connected assets are the start of the story rather than the destination and customers are starting to realize that the old adage of “garbage in, garbage out” applies if data collection and hoarding becomes an end in itself.

A good example is multinational telecom company Telefonica, a provider of smart technology to collect data from assets (such as vending machines). The data is then fed into their existing analytics for decision support. The power of analytics is significant enough that it will also be important to assure customers that you respect their privacy and data rights. Google faced controversy after its 2019 purchase of Fitbit due to concern over how Google would use and monetize end user data.

During 2020, my forecast is that businesses will focus less attention on methods by which to collect additional data and more on making valuable use of the data they are already collecting.

Prediction 4: Companies Work to Balance AI vs. Human Experience

As advanced AI becomes more widely adopted among service organizations, companies will seek an equilibrium between the efficiencies of AI and contact with humans that customers and other stakeholders crave. On one hand, greater AI use not only reduces costs but also enables organizations to make better use of resources in sectors facing labor shortages. AI will do a better job meeting certain deliverables and should automate many repetitive tasks. Will this free up staff for more customer-facing work?

In various service settings, this is exactly what AI has already done. AI-driven schedule optimization for instance enables a single dispatcher to support a larger number of field service technicians, enabling them to manage by exception, perhaps spending more time with customers when they need a human touchpoint.

Service intelligence vendor Aquant in this Field Services Online article, while acknowledging Fortune had in 2016 warned that 48 percent of jobs would be lost to artificial intelligence and robotics, says the true future lies in a hybrid between people and AI. As noted by Deloitte in its report Smart Field Service: Connecting Customers, Assets and Employees, “In a digital world, it’s emotional connections that make the difference between satisfying experiences and those that delight the customers and build strong long-term customer relationships.”

Our job now is to use AI to engineer seamless, satisfying automated processes into our business without engineering the human contact out.

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January 9, 2020 | 4 Mins Read

Avoiding Bias in your Technical Criteria

January 9, 2020 | 4 Mins Read

Avoiding Bias in your Technical Criteria

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By Tom Paquin

In the mid-1990’s, organizations began building software designed to track different metrics for their employees. About an hour after any one of those systems were implemented, at least one employee would have figured out a way to game the system.

I was not one of those employees. I was, by contrast, a vehement rule-follower who was aghast that a fellow employee (We’ll call him Jeremy) would return and re-sell warranties at the end of a shift. Jeremy noted that the system was designed to count every new sale towards our quota, and didn’t discount returns from that number, so he had found a way to meet our excessive sales metrics without putting in the work—or, in some cases, putting in more work.

This particular example requires some human interference, but nevertheless represents a truth in the way that we collect data, one that becomes of even greater importance if you want to use that data to benchmark outcomes-based service: You need to plan against bias when you’re developing your technical criteria. It’s very easy to lean your reporting in a bit to make it more favorable towards a specific sales-level agreement, for instance, but there are, in fact, major consequences to doing that.

Let’s think about the repercussions of the example above. Sure—Jeremy hit his number, but there’s now a misrepresentation in the system of the total number of warranties sold. Research has shown that increased warranty usage has a direct tie to customer loyalty, so that means that any piece of forecasting is now inaccurate. And, of course, now there’s an inflated percentage of warranties sold on that date last year, so when next year came around, and we weren’t able to beat last year’s number, it actually makes us look worse.

This is something that Mike Gosling from Cubic mentioned in this week’s excellent episode of the podcast (rate, comment, and subscribe). In it, he talks about setting up systems because, politically, they’re favorable for your company. While that can often be a good consideration, especially when developing SLAs, he warned privately around setting up data collection systems that were engineered in a way to produce a politically-favorable result. In the example above, the employee figured out how to rig the system. In many cases, the bug is actually a feature of the software.

Here’s a simple example of how this could happen in practice even without a Jeremy: Imagine you have two facilities that you manage, one that requires 50 repairs a year, and one that requires 10. The larger facility has an 80% SLA compliance rate. The smaller one has a 50% rate. Organizationally, you’re shooting for 75%. How will you calculate the performance of these two locations?

If you take the numbers in aggregate (45 of 60 jobs met SLA requirements), then horray, you’ve hit your quota. Enjoy your bonus. Measuring that specific way, though favorable, ignores the fact that there may be serious regional, logistical, or workforce challenges that you’re ignoring at one specific jobsite. You’re not getting an accurate picture of your business, and you’re doing your business and your customer a disservice.

This oversight is easy to see with less than a hundred jobs and only two job sites, but for an actual business, who then has to layer in additional layers of complexity, and hundreds, if not thousands of jobs a year, it’s easy to see how biased thinking and aligning numbers to meet your narrative can be so easy.

So what do you do? Here are a few things that we’ve seen businesses find success with.

From many data sources, build one source of truth. I rarely stop talking about the importance of having a single source of truth for your business that runs through service, sales, operations, and so on. That truth, though, is only as powerful as the data powering it. Garbage-in-garbage-out is even an oversimplification in this case. The data needs to come from good sources, yes, but it needs to come from diverse sources, and, importantly, if some of your customers aren’t as sophisticated as others, perhaps your business has a blind spot.

Audit your processes on a rolling basis. Take any one technician, account, site, or day, and see how it anecdotally matches up to your numbers. Is it way off? Are technicians logging their appointments properly? I spoke to a guy not too long ago who discovered that an entire branch was logging appointments at the end of the day, rather than starting and ending them in real-time. Any time you turn over a rock it’s incredible to see what sort of worms wriggle out.

Rethink your workflow. Sometimes it’s hard to see that we’re doing things simply because that’s the way that we’ve always done them. Oftentimes, it takes a head-cracker to come in and shake things up. Don’t be afraid to look outside your division—or your business—for the talent to think about the data you’re collecting in new and different ways.

Even if you do all of this, there’s still going to be the potential of drift, and there may always be a Jeremy skulking about to step on the scales. Because of them, improvement is never done. The company eventually patched out his exploit, but it took nearly a year for them to address it. We are all tasked with making our businesses a little better today than it was yesterday, and that’ll never change, but it’s a lot easier to do if you start out on the right foot.

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