Doubling Down on your Field Workforce in Telecommunications

By Tom Paquin

Telecommunications companies across the board are in a bit of a crunch. For cellular companies, new technologies have converged with decreased barriers to entry, creating a harrowing landscape. On the other end, speedy wireless connections and shifting consumer behavior are changing the ways that people interact with cable and satellite companies as well. As more and more companies develop streaming solutions (in spite of my dubious assessment), that crunch will accelerate, presenting challenges and opportunities.

These pressures call for telecommunications companies to start thinking about their businesses differently. Naturally, many companies use this inflection point as an opportunity to refocus their businesses on the service experience. Are we surprised that I am making the case for service? If so, you likely are new to this website.

The march towards service requires careful consideration of the levers of business in telecommunications companies, and we’ve explored that through a variety of avenues in the past. Today let’s go a step further by looking at some specific technologies that can support the delivery of service—when done right. While backoffice service software is key to originating appointments and coordinating schedules, telco service, by its very nature, happens primarily through field operations. Field workers can certainly deliver fine service with half-baked or disconnected utilities, or just a box of tools, but these roles are improved exponentially by robust, complex mobile toolsets.

Mobile field service is by no means a new concept (I’d argue it’s one of the most mature elements of service software), which makes it easy to write off. Solutions age, technologies don’t keep up with the demands of the business, and it’s useful to benchmark your solutions every few years.

For telecommunications professionals, there are a few unique considerations that are important when reviewing your mobile service solutions. Here are some things to keep in mind:

The Backoffice and Field: One Platform in Harmony

This has been my refrain now for early five years of writing about service, but everything that your technicians have at their workstation should also be in their pockets (“Even their stapler?” some smart aleck might ask to which I say that it depends on the type of pockets). This means full schedules for themselves in their colleagues, full access to parts systems, full access to resource libraries, full marketing, customer experience, and appointment logging capabilities.

I do understand the challenge, especially among telco professionals to stop what they’re doing in order to take advantage of their mobile tools, but that is exactly why it’s important that they can access everything—and access it well—on mobile. It’s also an opportunity to enhance your mobile applications with mobile-specific elements, to make mobile a truly better-than-desktop experience.

Contingent and Salaried Labor Need to Be Brought Together

Telecommunications professionals have the added challenge of asymmetrical asset repairs, different technical fleets, and B2B and B2C sitting, under many circumstances alongside one another. For those reasons, the need to lean on contingent labor, or even just different technical pools for different types of jobs, becomes necessary. It’s easy, then for parts inventory, schedules, and resources to be siloed.

I’m not arguing that you blow down the walls of those silos, of course. That has the potential of causing anarchy for your business. However, for businesses to work effectively, field workers and backoffice, whether they’re working for you, or contracted, working in a customer’s home or on a radio tower, should be working in systems that are at the very least integrated. The future of enterprise management means that service, project, and asset management across the whole of your business should be coordinated by a unified set of applications.

Building a Field-Oriented Mindset

The last piece of this is the most complex, and requires us to step outside of the solutions themselves to the way that those tools interact with your business. Take parts management as an example. In a world that lacks field orientation, parts live in depots and warehouses. In a field-oriented world, parts live in transit, on technician vehicles, and across a wide array of channels and endpoints. Fully optimizing for mobile means tracking and coordinating all of these sometimes disparate touchpoints into a coherent strategy.

Telecommunications has long embraced the importance of service, but to take their service to the next level, it’s time to reevaluate the technologies in the hands of your employees. This means auditing not just your tools, but your whole mindset around service management. Field technicians beat at the heart of the connected telco business. Don’t leave them without the tools that they need to succeed.

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Emilie Giraudet, formerly the Head Of Customer Service Business Support & Sales Steering at GEA Group, shares with Sarah her hard-won and valuable insights from more than a decade of work transforming global service at GEA. Insights include practical advice for how to influence and align key stakeholders, how to set a solid technological foundation, and three keys to successful change management.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host Sarah Nicastro. Today we're going to be talking about some of the lessons learned on the journey to advanced services. I'm excited to welcome today Emilie Giraudet. Emilie is a global leader with 12 years’ experience in the manufacturing industry and an expertise specifically in customer service. She was most recently the Head of Customer Service Business Support and Sales Steering at GEA, one of the largest global technology suppliers for food processing. She has a wealth of knowledge and experience and has kindly agreed to join us today and share some of that. Emilie, thank you for being here and welcome to the Future of Field Service podcast.

Emilie Giraudet: Hello Sarah. Thanks a lot for welcoming me in your podcast today. Very pleased to be here today.

Sarah Nicastro: I am pleased to have you. Before we dig into talking through some of the lessons you've learned and some of the experiences that you've had in your various leadership roles, just tell us a little bit about yourself and your background and your most recent role with GEA.

Emilie Giraudet: Yeah, sure. I hold a Master Degree in Food Process Engineering and an executive MBA from INSEAD. As you mentioned, I spent most of my carrier within GEA, which is one of the largest global technology supplier for food processing. I dedicated most of my carrier to developing service strategies, businesses and teams, and to driving business and cultural shift towards the more customer centric and performance driven organization. In my last role, I led an ambitious digital transformation project, leveraging customer install-base data through data management and analytics in CRM and analytics cloud in order to steer service revenues and customer experience.

Sarah Nicastro: Good. You make it sound so simple, but we know that it's not. That's what's so interesting about talking through different people's journeys is there really are so many things that you learn along the way. At GEA, you made some significant progress on the journey to advanced services or Servitization and you're here to talk through some of the lessons you learned as you did this. The first area is alignment on vision. What perspective can you share on making the decision to move from spare parts to advanced services, CapEx to OPEX, some of these big, big shifts that manufacturing organizations are making. What perspective can you share on sort of seeing the opportunity to evolve but then creating that alignment around it as an organization?

Emilie Giraudet: Sure. It started with a great vision from top management, that's step by step we implemented in the organization. About 10 years ago, everything started with a visionary top managers at GEA who understood early enough that in order to increase sales and support customers, especially in mature markets, GEA should not only focus on new CapEx investments which were limited in these mature countries and also support existing clients with better services to help them optimizing their plans performance and OPEX management.

Emilie Giraudet: We really had this cultural shift coming from top management, especially looking at the evolving markets in mature organizations, mature countries. In order to achieve this vision, we define an ambitious service strategy with a head of a new after sales and service business unit, a consultant and myself so a very small team at the beginning, working on a strategy that we quickly had approved by the boards. Once the board approved it, we started to implement it in the organization.

Emilie Giraudet: To start and make it easy at the beginning, we built a core team with top service leaders that we picked from the best performing service entities around the world and after that, we worked on building a community around the world, training people, showing the vision, communicating about new service products and new proactive approach that we could bring to the market and at the same time, we started to implement new KPIs to track our performance, to be able really to integrate this culture in the organization and globally, if I look at the progress we made it in 10 years, GEA doubled its service contents from 15% of the revenue to now about 30% of the revenue. Globally service transformation as you know is a long journey. Some more steps are still needed to achieve the company full potential, especially I still believe GEA needs to break down some silos and to foster even more customer experience culture in the organization.

Sarah Nicastro: But I think it's a really good point that even before you start to implement real change or introduce real tech... Different technologies and systems and change processes and things like that, you started the communication and the training on the concept and the culture itself so before you were even saying, here's how you go do this new thing we're asking you to do it was here, understand how big of a role service can play in the organization and what that can look like and really training more on making it a part of the culture. Am I understanding that correctly?

Emilie Giraudet: Yeah, exactly. We had some good examples already. We had some countries where they already shifted their culture and who had a lot of revenues coming from services, would develop new concepts, new services, new approaches to clients so we could leverage this internal benchmarking to encourage other to change and to show the direction. So to make it real and possible achievable for countries who were a bit less mature, I would say. Everything started with the vision.

Sarah Nicastro: That's helpful, when you have examples within your own organization of where it is being successfully achieved because that's, it's a bit different than pointing outward and giving examples that way. I can see how that could resonate quite a bit. I want to throw a bonus question at you because I'm just curious your thoughts. One of the things that sometimes comes up in my conversations Emilie is, because you're saying that you had this vision, the vision started from the top down, the leadership saw the potential and the opportunity and then move forward from that point.

Sarah Nicastro: Do you think it is possible to transform in this way if it doesn't initiate at the top? The reason I'm asking that is because I do talk with folks sometimes who lead service functions and they see this potential, but it's like fighting an uphill battle internally. The company culture itself is more, let's keep doing things the way we've always done them, let's stay focused on our product success or what have you and it can obviously be very frustrating for the people that do see that potential when it isn't a shared vision. Is it a lost course? Is there a way to sort of infiltrate the upper level and share that? What are your thoughts?

Emilie Giraudet: Well, globally, I don't think its waste of time, so I believe there is a lot of potential in service and I'm sure that, I mean, when... I mean, people try to drive this initiative, they can be successful already at their level. Then if they want to really roll this out into the entire organization, I believe they will need to get support from top management to a certain extent or else it's very hard to move the organization. Getting buy-in from top management to me is needed to really roll out this big change and big transformation, but I think demonstrating that you can achieve things on your own at a local level or it gives you power to engage and motivate people. For me it's, we're starting but clearly if your ambition is to roll it out into the entire organization, top management support is needed to motivate the rest of the organization.

Sarah Nicastro: I just, I always feel for those folks because I can feel that frustration of seeing the opportunity, but it not being shared so I was just curious your thoughts. I mean, I agree you have to get it to have it really take hold, but it's a good point of find some ways to demonstrate success that you'd have better luck winning people over with that than just conceptually.

Emilie Giraudet: Mm-hmm (affirmative). If you have good feedback from customers it can really help, I guess, engaging top management.

Sarah Nicastro: Yes. Good point. Okay. Moving on to sort of the next topic which is the importance of organizational structure, when we look at expanding the service business. This is something where at GEA you made some changes to set yourself up for success. Tell us a little bit about that.

Emilie Giraudet: Yeah, indeed. In the last 10 years we tried three main different approaches. We learned on the way. We started, as I mentioned, in 2011 and especially in one of the division or where I was working a segment process, engineering segment, we created a new after sales and service business unit on top of the existing traditional application business unit. That was really a shift already implementing that. As I explained, we started small with a very small team and expanded a little bit but without having a real dedicated organization.

Emilie Giraudet: Only in 2015, GEA implemented a new organization. For the first time we created a global service organization with about 400 people out of about 4,000 service people globally in the organization. The global service organization was responsible for developing new products, business development, technical support with really experts from different domains. They were in charge also of improving processes and competence management so really a central function in charge of steering and making service organization more professional.

Emilie Giraudet: At the same time, we had this local organization that we try to empower and really to give them local responsibilities for them to steer sales and to serve clients as locally as possible so really trying to get closer to customers. That's our second organization. More recently in 2020, we implemented another organization where we remove this global service organization as such, we implemented five different division and what is new is that GEA appointed chief service officers at the board of each division. Then we have service teams in a metrics organization so reporting on one side to the chief service officer and on the other side to the more operational business units.

Emilie Giraudet: During these years, I have really saw top management focus on service continuously increasing and I believe it's also been supported and encouraged by a profitable sustainable growth. I believe GEA succeeded in defining an ambitious vision to start in appointing dedicated resources to implement the vision and they also managed to develop step by step service talents and mindset across the organization. Even if we try different things, I don't think it was failures. It was just new ways of doing things and taking time to structure and change this organization.

Sarah Nicastro: I'm not sure if this will make sense to you, but in my mind listening to the progression that you just talked through, it almost seems like just that not trying something and it not working, but more of an evolution. When you started this and it was a small team and it was focused, it was because it was new. I mean, it was a new focus for the company. You really were still working on making it a part of the culture and determining how you would have success and then it sort of evolved into the second phase where you made some progress. But to me, it seems the chief service officer point is really an illustration of the initial vision permeating the company culture to the point where it doesn't need to be its own separate entity or business unit. It is truly a part of the business. Does that make sense?

Emilie Giraudet: Yeah, it's a part of the business. It has still to be steered so somebody has the vision. Somebody is leading some initiatives and is having power to engage the organization on the change and I believe having this global service organization a bit separate was not sustainable anymore. Globally we are taking care of customers. We want to build customer experience so removing silos, I think it is part of our success and we had to. It's a good way I believe to break down some silos and incorporates better service organization within the different business units.

Sarah Nicastro: That makes sense to me. I think the customer experience is one aspect of it. Again, organizational structure is another topic that comes up a lot in these Servitization conversations because for a company that's really starting as a product manufacturer that's evolving to trying to be a service provider in a Servitized business. I've seen different structures similar to what you've mentioned, sort of a global entity or a separate business unit or a separate function or sometimes people even set it up as a separate business that kind of comes in at the point of after the point of sale and so it seems like it's something that takes some work to your point to try different things and not only sort out what works well and what doesn't, but to evolve as the service success of the business grows.

Sarah Nicastro: But to me, I agree with the point of having it more integrated into the business makes for a smoother customer experience. I also always question the true level of success you can achieve on Servitization if it just remains a separate thing. To me it's, you're really only then buying into the vision of Servitization to an extent rather than I guess doing the work it takes to integrate it fully into the business vision, culture, mission, process, et cetera. It's another very interesting part of the conversation. Okay.

Sarah Nicastro: Next let's talk a little bit about strategy. You have the vision, you've sort of structured yourself in a certain way since start and changed over time and then you have a strategy for how you're going to have success with service, but at GEA this began with needing to have a foundation from which to build and so you uncovered this need of really better defining what the install base looked like and that's where the CRM project that you mentioned earlier came from. Tell us how this tied into the strategy and why it was so important and what that project look like.

Emilie Giraudet: Yeah, sure. I'm very happy to talk about this. It's been one of my core focus in the last years and as you mentioned, it's really for GEA the foundation for developing service business. We truly need to know who are our customers, where are their plants located, what type of installation do they have, to be able to segment clients and be more successful in our proactive sales approach, in designing new solution services and developing services better fitting to client's needs. It's really a foundation to become more proactive and more specific in what we do.

Emilie Giraudet: Maybe let me tell you a little story to start and to show you where we started 10 years ago and explaining why we had to change at a certain time. 10 years ago when we built that business unit, we started to explain the concept of structuring an install base as a foundation for growing our service revenues and I really remember that some of the service heads were very successful, had difficulties in understanding this concept. Okay. I see two main reasons for that. The first one is that at that time service people were mainly reactive in our organization so they would not need to have a list of prospects to approach them more practically so that's one

Sarah Nicastro: Waited for the phone to ring.

Emilie Giraudet: Super reactive, no need to know our clients. The second reason is that at that time GEA had a very centralized approach and were servicing clients from the core technology centers that GEA has mainly in Europe and these technology centers, they somehow have information about customers in their local systems so no need for them to have a very well-structured install base to be able to answer to client needs.

Emilie Giraudet: But everything changed with the implementation of our new organization in 2015, where GEA decided to give more power to the local organization and we realized that this local organization had no access to their install base so it was very hard for them to achieve their budgets, their targets, without being able to proactively approach existing clients because they didn't know them. That's really what drove the change and it took us many steps to get there, I would say.

Emilie Giraudet: For a certain part of the organization, we had very limited... I mean, not limited, but we had siloed data. Data were, I mean, spread around different systems, et cetera, so we had a hard job collecting all the information, put it in a very simple global Excel file to start with. Then we had this project already at that time to launch a new CRM, but we had a freeze from the board so we decided to implement an in-between situation, building an SQL server, starting to structure things.

Emilie Giraudet: Finally, one year, two years ago, the cloud CRM was approved and we were able to clean and migrate data in CRM to build a global community of users globally to define governance model and really to progress there. It was really the foundation for us to start with. I believe GEA now has data good quality accessible in a CRM cloud for the entire organization and now GEA can leverage this information to develop sales steering analytics. Okay.

Emilie Giraudet: In terms of analytics, GEA has two main KPIs that they are looking at. One is the market potential. Market potential, we define them and GEA defines how much service business they can generate from each install base. Okay. The second KPI we are looking at is what GEA calls the capture rates. It's basically the ratio between what's the legal entities are achieving in terms of sales and their potential. Two main KPIs that GEA has been using for a while already, what needs to be improved and what we started to work on in the last months, I would say is to make these KPIs more operational.

Emilie Giraudet: The local teams really accepted it's not enough to say, this is your potential, here you go. They want to... They need to trust it and that's where having data of better quality, more accessible, allows us to utilize more advanced concept like machine learning, also engaging people using design thinking concepts to develop more advanced and more detailed market potential calculation. At the same time, we also develop some dashboards to allow people to visualize their data and to be able to really take better data driven decisions based on the reality in their market.

Sarah Nicastro: This had to be a really interesting experience for you and for the rest of GEA leadership because you already had the vision and you already understood the potential without the real data. I mean, it had to be so affirming to then have the data come together and to look at the potential in real numbers and the real scale of what was possible with the service focus. That's really interesting. I wanted to make one point of clarification because I know I got confused by this when we spoke the first time and I don't know if our listeners may be smarter than I am, but, so when you talk about local versus central, so when you started this project, you had the small group to start and then you had the business unit and now you have the chief service officers, but the strategy, the innovation, the technology, those things are centralized, but the execution is localized. Am I understanding that correctly?

Emilie Giraudet: Yeah, exactly. Sales and execution are localized. Exactly. To be able to visit clients so I remember two years ago, I visited Chile for instance and I was already responsible of this install base and we organized some workshops to understand how to structure things, what do they need and so on and what came out of this workshop is that, yes, they need the install base to be able to increase their revenues but they had information about the install base, it was very limited so they told me, Emily it's great to know that this plant is in Chile, but Chile is huge. I need to know exactly what type of plan do we have in which city. Okay. Then they had very limited access to our systems so the SQL server we had at that time was not approved by IT for instance so we could not allow global access to our information so having good quality data and being able to see it was really key for local people to visit clients, to improve their knowledge of clients and their performance in service.

Sarah Nicastro: That makes sense. I only point that out because it's another common conversation that comes up is around to what degree to standardize and to what degree to allow some level of regional or business unit or partner depending on the circumstance kind of individualization. That's why I was pointing out that the strategy, the innovation, the technology use are handled at the central level but the execution is at the local level.

Sarah Nicastro: I'm curious in terms of the CRM project and really bringing this data to existence and to life, to be usable by the entire organization. I'm curious what the reaction has been both from the company and what has it been like for folks to have access to this information and what type of feedback did you get there? But also from the customer perspective, this is really, if you're talking about moving from a reactive model entirely where it was, okay, something's wrong, we need to call for service to this level of being able to be far more proactive on providing service and looking for advanced service options and things like that. I'm curious the reaction and the feedback on both sides.

Emilie Giraudet: From the internal perspective, even if 10 years ago it was difficult to convince some people I think that the change of mindset progressed, so nobody was against or not able to understand the concept. I think everybody was in need. Also the fact that we implemented this global organization in 2015, GEA had to work with different divisions and some divisions were more advanced so already had the CRM on premise not on cloud, but had this higher maturity, I would say, in managing their install base. It was quite obvious that it was needed so nobody had to be convinced. Everybody saw the interest. We just had to do the hard work, cleansing the data, migrating the data, training people, so buy-in was already there. In terms of customer perspective, I see different... I receive different feedback. The first one is that GEA is a complex organization and GEA develops different technologies.

Emilie Giraudet: In the past GEA would have some experts in different technologies and would visit client for one specific technology and another expert would visit the same client for another technology. Finally, I think now local people have access to the entire information of the install base for GEA and it's a big advantage for them. So clients, instead of receiving visits from five different experts for their installation, they would receive visit from one person having the entire understanding and visibility on what is installed. That's one.

Emilie Giraudet: Secondly, I mean, with CRM came not only the installed base but a ticketing system. All correspondence with customer can be done in this system and it's transparent, accessible to everyone. It also increases the internal transparency and it's immediately perceived by customers so they don't have to repeat twice the same thing to two different people because we have hold historical information in our system. I think customers now get a feeling that we have a much better global understanding of their installation and not simply experts coming to solve specific problems that they have.

Sarah Nicastro: That makes sense. It's really interesting, you said how hard of a journey it was to cleanse that data, to consolidate that data, but as we talked about at the beginning it is the foundation for anything from that point forward and so you mentioned things like machine learning and it's taking the time and this is something that is always a lesson learned when I ask folks that have transformed service, what's one of the biggest lessons you learned? It's always the importance of good data and it's going to be harder than you think it's going to be, but there are no shortcuts, those types of things so it's interesting. Okay. You had said to me a comment you must show impact to continue progress and I think we alluded to this honestly a little bit earlier when we said if someone is finding themselves in a position where they see potential for the organization that may not be shared, look for an area to make impact, to gain the attention and the buy-in to continue progress but in your instance, tell me what you mean by that statement.

Emilie Giraudet: Yeah, sure. I fully agree to convince people to be able to get more resources, more budget in an organization. I believe it is crucial to be able to prove what you achieve so I'm going to share what I personally do usually. I usually do my best to use a combination of analytics and customer centric approaches when I drive my teams and my project. As a Six Sigma Black Belt, I systematically take time at the beginning of a project to define the scope clearly, to define objectives and KPIs that I want to measure and to achieve. Okay. That's to me really crucial and I know a lot of people don't necessarily do it, even if it looks very obvious. During the project, I really take time to monitor my KPIs and also very important to communicate it regularly to key stakeholders for them to see the progress, et cetera, and also for my team to be able to adjust approaches when needed.

Emilie Giraudet: Okay. That's the analytical approach. On the other side, before I start a project I always make sure as well that my teams, my projects are fulfilling our customer needs. Internal, external customers doesn't matter, but you really need to have a clear understanding of what customers really want and as I mentioned, I like to leverage tools such as design thinking, for instance, to really make sure that I have a true understanding of the needs. I believe that then it's easier to show impact when you're able to demonstrate and to measure the progress you've made on delivering customer results okay, to prove your success and to be able to continue progress in your organization.

Sarah Nicastro: Yes. That makes sense. That's really good advice for how you handle that. It always shocks me, but it shouldn't anymore because I hear it often enough but it still shocks me, the amount of people that say, I don't, we didn't measure that, when it comes to KPIs. I think that's a really smart approach, especially because when you look at this project in particular, the CRM project, it really is just the beginning of the potential. I mean, it was setting that foundation and so there will be so many opportunities to build upon that success, but part of that is because you did an excellent job doing it the right way and tracking that progress to make sure that when the next opportunity comes, there's belief in the ability to execute.

Sarah Nicastro: We had a gentleman on the podcast very early on and there was something he said that has always stuck with me and he referred to it as building a strong digital reputation. Meaning if you don't do a good job for whatever reason and we can talk about the many, many things that that could mean, but you ruin your reputation so the next time you try and implement a new tool or a new system, you're going to be met with so much resistance because of that last time so it's important to stay focused on building a positive digital reputation because when you look to build, you need to have a good track record. So that makes sense. Emilie, can you share one of or some of the hurdles that you are proudest for overcoming because we know that this journey is not an easy one. It's nice to be at a point where you can reflect back on some of the success, but there's a lot of really hard work getting there.

Emilie Giraudet: Yeah, sure. Probably the biggest hurdle I faced with that project was related to finding the right collaboration mode with IT department to drive such a global digital transformation projects from and for the business. That was really the toughest part. In 2019, I had to drive different projects around install-base management and sales steering analytics and clearly to work on this project, I needed support from it teams. The challenge was really for me to get support from this IT team because resources are limited and at GEA at least you really have to prove that your project is super top priority to be able to get resources and when I knocked on their door in 2019, it was kind of too late and I was probably missing buy-in from this, the organization to be able to prove how important it was.

Emilie Giraudet: Later in 2019, I started to prepare 2020 and I understood that I really had to drive into nearly a complete change management project starting from convincing top management, engaging business leaders around the world, also getting support from the CRM team to be able to demonstrate the strategic importance of my project to IT. It was not enough to knock on their door and say, "Hey, this is super important." But really showing them that I had commitment engagement from top management, from the business side of the organization, from the CRM team. Then finally after a few months, they approved to support my project and they did a great job at it and we were able to deliver our project on time with good quality. So all good.

Emilie Giraudet: What I learned out of this story is that mapping key stakeholders and really understanding their needs, their objectives, their working modes at the beginning of a project is a key dimension to succeed in driving such a broad cross functional and cross geographical transformation project. If you miss one key stakeholder, it can ruin your project so really important to map early enough key stakeholders, talk to them, understand how they work and how you can make it happen together.

Sarah Nicastro: That's really smart. I'm smiling because it's really smart. Also, there's a bit of tenacity thrown in. I mean, you deserve some credit for being resourceful and understanding, well, if it's not going to work this way, then let me kind of go about it in a different way. That's really good. Okay. What would you say outside of this project specifically or related, whatever you want to share, what do you... What would you say is the biggest lesson you as a leader have learned?

Emilie Giraudet: It's kind of related to this project, but not only so I would say it's about change management. When I was younger and especially when I joined this after sales and in service business unit I was really reporting to the managing director, head of the BU so I thought that people would follow what the MD would say naively which was not true. They would always argue and negotiate and not implement things. I really understood early enough that it's not enough to have very high position to ask your people to do things, you really have to engage them and to motivate them.

Emilie Giraudet: To me, there are three main dimensions to succeed in implementing change. The first one is about motivating people. We are human beings so we need a certain level of excitement, enthusiasm to get things done. I believe it's crucial really to find a way to motivate people around your project. The second one is about showing the direction, so being able to create a vision to make it compelling enough to be able to start the change and to motivate people to act. The third dimension to succeed in change management to me is to be able to slice the elephant into actionable and achievable steps so as to reduce the complexity and encourage continuous success. I really believe that being a leader is not about giving people instruction, but really about motivating people, understanding their needs, designing and communicating a compelling vision and executing plans with clear steps and milestones. All these dimensions are crucial.

Sarah Nicastro: That's really good advice. I think... What I was thinking about when you said you realize that they weren't going to just do what they were asked, they were going to push back. Even if they hadn't pushed back, I think one of the important things to think about with really making an effort in managing change the ways that you just outlined, which were fantastic is the goal should not be compliance because the level of success you're looking to have in this type of global transformation, you won't achieve from compliance. Even if they had said, sure, Emilie, we'll do whatever you're asking us to do, you need commitment, you need a real commitment to the mission, not just somebody that's going to do it simply because they're being told and you're not going to achieve that without making that a priority. That's really good advice as well. All right, any other comments or anything, any closing thoughts you want to share?

Emilie Giraudet: Yeah, maybe one last more so we started with explaining that moving an organization used to selling machines to a service organization is a cultural shift. That's also what I understood during this year is that, it's really crucial to drive organization cultural shifts and even if GEA can be very proud of its transformation to a more service oriented companies, I believe there are still better results that can be achieved especially by engaging a broader audience so we went through this different organization that we implemented so indeed we started engaging a part of the organization, the service organization, I believe now to reach more what we expect in terms of customer experience. We really need to engage a broader part of the organization and it takes time. It's not easy to break down silos and to change the culture but that would be for me the next step, I would say, for GEA to truly succeed and really leverage the potential that they have. This is hard to do.

Sarah Nicastro: What other parts of the organization or what piece would come next, I guess?

Emilie Giraudet: I would say people who are involved in selling new plants, new machines to customers, and really to tighten and to build a closer collaboration between pure service after salespeople and people selling new plants. I think we have a, I mean, in all organization interest into building this and a good way for me to do that would be really to map the customer journey so really to step out of internal processes and how things are done in an organization, but really looking at the customer journey and building a map to improve customer experience that would really facilitate collaboration within different parts of the organization.

Sarah Nicastro: Yeah. I always think too in this type of transformation, the opportunity, once you get into marketing. Like you said, it's every... It takes time. It's a huge undertaking to take a company from being a product business to a Servitized business. But once you start having success and being able to build upon it, it's quite interesting. I was also thinking when you were talking about the CRM project, you're really starting rightly so with a focus on how to wrap your arms around and better serve the install base but even once you're better serving them, then you have the opportunity to start brainstorming with them and thinking about adjacent services or new digital services or what have you. I mean, it really is the potential is limitless and it's exciting, but also overwhelming, particularly for people that are inclined to want to spearhead this type of transformation. It's a really interesting topic and you've had some wonderful points to share. Thank you so, so much for joining and talking with us on the podcast. I really appreciate it Emilie.

Emilie Giraudet: Thanks a lot Sarah. My pleasure.

Sarah Nicastro: You can learn more by visiting us at www.futureoffieldservice.com. You can also visit us on LinkedIn as well as Twitter @TheFutureOfFs. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS service management by visiting www.ifs.com. As always, thank you for listening.

By Sarah Nicastro, Creator, Future of Field Service

Eickhoff is a family owned company founded 1864 headquartered in Bochum, Germany. The company’s 1,300 employees worldwide support two business units: mining equipment and gearboxes used in industrial and wind turbine applications. Like many manufacturers, Eickhoff in recent years has been navigating a new world of customer expectations and determining the role service will play in the company’s ability to differentiate.

Service for the company’s two business units looks very different, as do customer expectations. On the mining side, Eickhoff manufactures the mining machines used in mines. The scope of responsibility to a customer is installation and assembly, training, maintenance, and repairs. Mining service is done in extreme conditions underground and, with such large equipment, service can take days or weeks or even months. Since the equipment can’t be transported, Eickhoff needs to ensure they have technicians and inventory in close enough proximity to customers to provide the appropriate levels of service. Mining customers are focused heavily on uptime and output since any downtime of the equipment is incredibly costly. On the gearbox side, Eickhoff manufactures an assembly that is supplied to a manufacturer, and service is requested either by that manufacturer or sometimes by the operator of the end solution. Eickhoff conducts inspections, repairs, part swaps, and returns refurbished pieces for spares.

“My role in the service department is product development, to bring Eickhoff service into the future, and to use new technologies to improve service quality for our customers,” says Dietmar Schmitz, Head of Product Development Service at Eickhoff. “The market has changed. Requirements from customers are different – they are demanding uptime and they want to simple-to-understand yet detailed insights (data). And the products have changed – they’ve become digital as much as mechanical. Therefore, service has changed, and we need to keep up. We must be able to deliver that part or make that repair at the exact moment it is needed. As a manufacturer, we have to think about how to evolve our operations to ensure the outcomes of uptime and information are met. Complexity has increased and continues to increase, and the only way to streamline that complexity to meet the needs is by investing in today’s technologies.”

OPTIMIZING ASSET-CENTRIC SERVICE

While there are significant differences between the company’s two service operations, what remains consistent is the intricacy of operations in that both are very asset intensive. “We differentiate on product quality and uptime,” says Schmitz. “At a point, we realized that wouldn’t be possible without optimizing our service operations.” Eickhoff knew that optimizing service management and then building upon that optimization to differentiate through service would be a journey. That journey began with looking to standardize on one service management system; to move to a “single source of truth.”

“We had more than 15 different applications we needed to replace with an integrated and intelligent system – a single source of truth – in order to streamline our daily business and provide us the potential for growth,” says Schmitz. “As I worked with our teams for around three months to scope the different, we determined more than 500 requirements for our project – a critical one of which was integration with our Infor ERP. We wanted a single system to support both business lines and bring all of our information into one place.”

Eickhoff shortlisted three companies before selecting IFS Field Service Management (FSM) based on its performance on the company’s matrix of user experience, IT, price, and compliance. “We wanted a solution that would meet our needs without requiring a dedicated IT staff of 10 experts to maintain,” says Schmitz. “IFS was the clear winner in the matrix evaluation and had functionality vast enough for our needs around asset intensive service.”

As the IFS FSM project kicked off, Eickhoff began to realize that the undertaking of consolidating, validating, and porting over its data was going to be quite complex. “As we dug in, we found a mess of data, product data, bill of materials of up to 10,000 entries and nine levels down, contact data, and so on. Because information was stored in so many separate systems, we found many redundancies and realized we needed to do a big clean up,” says Schmitz.

Not only was ensuring accuracy of the millions of entries of data put into the IFS FSM system key to building a strong foundation in optimizing the service operations, but as Schmitz says – service success lives in data from the past. “Service success lives in data from the past,” he explains. “The ability to provide good service relies on rich product history, assembly history, service history, operation history, and customer details – you may not need all of this information each time, but when you do need it, it must be there. Taking the time to clean and transfer this data properly was an investment in the long-term success of the project.”

Once this process was complete, Eickhoff began rollout of the FSM system and started with the back office. “Our thought process was that if the back office is not stable and comfortable with the solution, we don’t want technicians running around out in the field with access to the system and risk impacting the customer experience. We chose to phase back office first, then begin rollout to remaining users on the mining side of the business,” explains Schmitz. Once the mining side was deployed, Eickhoff began deployment on the gearbox side. Once IFS FSM was fully deployed companywide, Eickhoff worked to incorporate feedback and manage change.

“We had a lot of input from users directly after rollout, with feedback and new ideas for the system. It was important to put ample time into discussing the reasons for and benefits of the new technology as well as examining what feedback to incorporate,” says Schmitz. “We put effort into change management following the rollout to ensure user acceptance and proper use.”

STREAMLINE SERVICE MANAGEMENT, THEN BUILD SUCCESS

Eickhoff’s goal with the initial deployment of IFS FSM was to make the company more fit for the future of service. “With our initial rollout of FSM, we genuinely felt we were at a point in the business that to compete effectively it was simply a necessity,” Schmitz says. “We wouldn’t be able to progress into service of the future without this infrastructure in place.”

Not long after completing its initial project, Eickhoff had an opportunity to become an early adopter of IFS FSM 6 and completed the upgrade in January of 2019. In the new version, Eickhoff was able to eliminate system customizations, begin using FSM for all scheduling of technicians, move time and expense management into the system, and benefit from IFS Lobbies for reporting and data analysis. “Being a part of the FSM 6 early adopter program was a good experience because we gained some valuable capabilities, like saving immense amounts of time by eliminating paper-based reporting and manual data entry with time and expenses,” says Schmitz. “It also gave us an opportunity the help shape the future of the product.”

Present day, Eickhoff uses FSM to manage all assets including both product and software configuration in both mining and gearbox divisions. The system holds all history, including the immense asset detail, in a single source of truth, which Schmitz emphasizes is important when there can be multiple requests or tasks running in parallel for any given customer. The technician portal serves to provide everything an employee needs to get the job done on site. FSM schedules the right person, at the right time, to the right place. All invoicing, hours, and expenses are managed through FSM. IFS Lobbies allow for detailed reporting and data analysis. The company’s next area of focus with FSM is extending greater mobile capabilities to its field technicians – currently, they interact with FSM through the technician portal. This works well because it provides a high level of detail and access to extensive data – and while Schmitz doesn’t see this use decreasing, he sees value in expanding upon it with a rugged mobile device that technicians can also take into the mines to extract or exchange data with the machine, make software updates, and so on.

“IFS FSM has been instrumental in enabling us to differentiate on service and has prepared us for the future of service,” says Schmitz. “We’ve completely redefined our communication flow – our data accuracy and visibility from the back office to the field and back is excellent. Everyone has the information – the same information – they need at their fingertips to do their jobs well. This has enabled us to deliver faster service and improve customer uptime, eliminate massive amounts of administrative manual and busy work to maximize resource utilization, and have far tighter cost control.”

IoT OFFERS MASSIVE POTENTIAL

In building upon its success, Eickhoff is working to bring IoT data into IFS FSM. “IoT and data analysis are critical to Eickhoff’s evolution,” says Schmitz. “We have projects going on each side of the business – mining and gearbox – to expand our IoT capabilities and ultimately develop new service offerings for our customers.”

Schmitz notes that a modern machine reads 1,200 to 1,400 parameters of data each second and that the ability to collect and analyze relevant data points can not only help the company to operate more efficiently and move to predictive service, but can enable Eickhoff to develop insights that are very valuable to its customers. “Porting notable events from our IoT environment into FSM is helpful in terms of history and documentation, in detecting events that are worth alerting customers to take action on, and to schedule out and even predict service needs,” says Schmitz. “But moreover, the insights we can glean are a new line of customer value. Insights from the machines on use, productivity, and output in non-technical, easy to read reports help meet the needs from them of more information to help improve their own business operations. Their ultimate goal is uptime, so not only can we provide the machinery but also insights to help them achieve that goal.”

As mining customers streamline their own operations, they can have less employees working underground which means less money spent and improved safety. Furthermore, Eickhoff can feed the IoT data back into its own R&D operation to improve future product development.

“Delivering outcomes to your customers means you take on the onus of mastering service complexity, and you can’t do that without technology,” says Schmitz. “My biggest lesson from this journey we started a few years ago is you simply must start. As we often say: there is no alternative. You also need to understand that technology is not a barrier; it is an enabler. You cannot say let’s wait a few years and see how the business is going; you may not be in business. And so, start as soon as you can.”

Schmitz stresses the importance of looking at your journey through the eyes of your customers and knowing it will be a process. “Delivering outcomes is a process and you have to do this step-by-step. We knew that, to start, we needed to optimize our back-office processes. This is something customers don’t necessarily see, but it was critical in our ability to evolve,” he says. “Putting the customers view on your own eyes is imperative. If you don’t know how your customers use your equipment and what their business operations are like, you can’t design service offerings that will meet their needs.”

By Tom Paquin

This is part of an ongoing series on the state and standards of service management software in 2020. Here are the previous articles in the series:

So here’s the deal—we talk about servitization constantly on this site. To the point that we have a whole section devoted to our servitization stories and recommendations. For those of us in the world of service, servitization is simply entrenched knowledge. And its name does, to a point, allude to its definition. Nevertheless, the word isn’t even in my word processor’s dictionary.

There are a variety of reasons why one might not have encountered the word “servitization” before. One is the obvious—they’re new to service. Another, less obvious and arguably more prevalent, is that they’ve been raised on a different service orthodoxy. Perhaps they’ve referred to the concept as service transformation, or everything-as-a-service (the phrase I used much more frequently as an analyst). For those reasons, I wanted to take a minute and add to the record a formal definition of servitization. So…

What is servitization?

In short: Servitization is the act of restructuring traditionally product-oriented businesses towards service-oriented functions, including subscriptions, repair and maintenance contracts, and outcomes-oriented guarantees.

So within that, there’s obviously a lot of nuance, and a wide variety of topics that are worth breaking down. The primary consideration, and most important is to note that servitization is not merely the act of creating a warranty program. Servitization requires a forward-looking consideration of customer interactions, not reverting to the trappings of tradition.

Moreover, the delta between manufacturers, and, say, telecoms in adopting servitization is vast. Your business structure will naturally change—sometimes dramatically—how this definition is interpreted in practice. The good news is that we’re here to help you make the most out of servitization!

If you’re looking to see how businesses are employing servitization in practice, here are a few places that you can get started:

The Road to Servitization in Product-Oriented Businesses

COVID-19 Is Speeding Servitization Progress, But These 4 Barriers Will Hold You Back

What Aren’t You “Getting” About Servitization?

Overcoming the Barriers to Creating Servitization Revenue Streams

Tim Baines, Professor of Operations Strategy at Aston Business School and Executive Director of the Advanced Services Group, makes his third appearance on the podcast sharing with Sarah insights into one of the most-discussed aspects of servitization: how to create revenue.

Sarah Nicastro: Welcome to The Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about the business model blueprint for Servitization success. I am excited to welcome back to the podcast for a third time, Professor Tim Baines, who teaches operations strategy at Aston Business School and is the executive director of the Advanced Services Group. Tim, welcome back to The Future of Field Service Podcast.

Tim Baines: Thank you, Sarah. I'm pleased to be here.

Sarah Nicastro: We won't go into details but we had to work very, very hard to bring you this episode today. So, thanks to Tim for hanging in there with us, and I'm excited for today's conversation. I think the biggest question that comes up for me, when I'm talking with folks about the journey to Servitization is how do we monetize it? What are the revenue models? How do we use it to increase revenue? So that is a part of what we're going to be talking about with Tim today.

Sarah Nicastro: Tim was first on the podcast last year, talking about the forces behind Servitization and what that journey looks like for companies, so if you haven't listened to that episode, it's definitely worth revisiting. And in December we tackled some Servitization predictions for 2021 and some of the things that Tim expects to see this year. So today we are going to add on to our nice stretch of podcasts, by talking about business models and revenue models and how to make Servitization work for your business.

Sarah Nicastro: So Tim, to start, can we talk about how does Servitization represent a business model innovation?

Tim Baines: Thank you, Sarah. So the whole conversation about Servitization drags in this idea of the innovation of the business model of the firm. The innovation of the business model of the manufacturing firm. And as you know, this whole conversation is about moving from a world where the business model is largely about the design and the production of a product, and the transactional sale of that product, to a world where the business model is ultimately about ensuring the outcomes, the business outcomes for the customer. And for our business model, as a provider, as a manufacturer, to be based on receiving value, on the capture of value, as our customer consumes the service that we actually offer.

Tim Baines: So the conversation about Servitization naturally leads into conversation about business models. And when we look at business models, look at the business model framework. It's largely recognized as having four elements to it. One element is about the offering, what you put out there, what you give to the customer, the service, or the product, or the product and service. One element is about how you deliver that, so the systems, the technologies, the people. And the third element, and really the focus for our conversation upon revenue models, the third element is about this value capture.

Tim Baines: And I'll just mention for the moment, the fourth element is about the broader competitive landscape and our competencies to compete in that. Before, now I'm moving back to this third element and saying, okay, the processes of value capture, how we get value out of delivering the product or the products and service to our customer, is where we naturally go when we think about revenue models.

Tim Baines: And of course, if you think about an organization putting a service into a customer, they're going to receive value in a number of ways. Some of those ways are going to be very direct, ways in which we can monetize and other ways are going to be less direct. The learning that we get, for example, of working with a customer. That learning flowing back to us.

Tim Baines: But of course, when we talk about revenue models, we're talking really about that way in which we capture direct funding, how we get value, monetary value, out of our offering to the customer. And what becomes interesting, you can look at this area of revenue models and you can reflect upon it and think about the different revenue models which are actually out there. And there is, of course, the traditional revenue model that you associate with a product sale, that the manufacturer gets reimbursed directly and perhaps immediately, and perhaps in full for the sale of a product, right away across to these subscription type models, where we're paying for, on perhaps a monthly basis, for actually the provision of a product or a service.

Tim Baines: And ultimately when you get to the business, the revenue models that we're really interested in, which are associated with these more advanced services, these revenue models consist of a combination of different factors. They consist of a pay-per-use component but they also consist of a lower banding, where every month we will receive some revenue, no matter how much our customer uses our product or service and an upper banding, which is basically a point over which we're saying to the customer, you can't use our products and service any further because we need to have access to that to do some services with. So maintenance work.

Tim Baines: So I hope that's made sense, Sarah. There's an awful lot in this topic of revenue models and it starts with the business model and it starts with the fact that we are undergoing a move to different types of business models. And the revenue model innovation is a really important component of that move to these business models, which are based more around service, rather than the transactional sale of the product.

Tim Baines: So I'll stop there for the moment and just see whether my explanation resonates with what you were seeing, Sarah, what you're being asked when you speak to people.

Sarah Nicastro: Yeah. Tim, that explanation actually had me thinking about our first conversation and talking about some of the forces behind Servitization, Right? And so if you follow me for a moment, what I'm thinking about is the conversation is often led with revenue model, right?

Sarah Nicastro: So I don't have a lot of organizations leading the conversation with me and talking about the more holistic view of business model. They're pretty focused on the revenue model. And what it made me think about is that that's because ultimately that revenue model aspect of the business model is what's going to yield the payoff to them, right? So it's kind of, they're naturally focused there because they're most concerned with, if we're going to invest time and resources on this journey, what's the payoff to us? Does that make sense?

Tim Baines: It absolutely does. And I see that also.

Sarah Nicastro: Yeah. And it made me think about the conversation in the context of some of the external and internal forces around Servitization, right? So it's, to me, the focus on the revenue aspect only, is sort of an internal focus, where the business model focus is looking at it more holistically, with both, what's the ultimate pay-off to the company, in terms of revenue but also how are we going to deliver value to the customers, that they are in essence, willing to pay for? Does that make sense?

Tim Baines: It does Sarah. And I think there's three threads of conversation which intertwine. When we look at this area of Servitization, if we're not careful, we can just see them as one thing that's happening, revenue models. But of course, as you've just pointed out, you have A, the way in which the customer actually pays us, but B, how that rolls up to be the business case for the organization, the compelling financial argument for us to move forward with services. But also C, what that means in terms of our relationships with other financial organizations or the financial innovations, or the ways in which we might explore, to actually fund some of our own activities. And that third area is in itself, a whole area of conversation, which can take a deep dive into and can be fully immersive.

Tim Baines: But the first two points, I very much agree with it, when we speak to practitioners, we see the same thing. They are interested in, how is somebody going to pay me? How is that going to affect me? Am I going to receive a lump sum or am I going to receive monthly payments? What's it going to look like?

Tim Baines: And then secondly, how do I put together a compelling financial case to the business, which is an argument for us to either move into Servitization, to move forward with Servitization, to expand our Servitization activity. Those are those two levels.

Sarah Nicastro: Yeah. That makes sense. So you talked about one of the components of the revenue model being the value capture process. So can you talk a little bit about some of the different ways of capturing value?

Tim Baines: So, and this is where I understand this language here can seem a little bit, almost like conceptual and difficult to grasp for a practitioner. But this is the language that the scholars who are working on, on business model innovation, those scholars tend to use. And one of the challenges people like you and I have, Sarah, is to take this somewhat academic conceptual language and translate it into practical terms. And value capture is one of these academic terms.

Tim Baines: But when we bring it right the way down and say, "Well, what are we really talking about, the level of a manufacturing firm," we can simply say, the important bit for us is how do our customers pay us? How do customers pay us? Now, one of the challenges is that manufacturing firms, of course, are very familiar with the idea that our customers pay us when they buy a product. And of course, as we move into these services, which are more sophisticated, these more advanced, these outcome-based services, the way in which our customers pay us tends to change.

Tim Baines: So we're here as a manufacturing firm. We are made aware that when you look at the more sophisticated outcome-based contracts, customers tend to pay for that service as they consume it. And that can give a lot of concerns to the manufacturer because you take the example of a high value asset. Let's say it's a machine tool. Let's say it's a million dollar machine tool. The old world is that the manufacturer makes the machine tool, sells the machine tool, gets a million dollars for it and with that million dollars, has the funds then, to reinvest in the materials, pay for the workforce, et cetera, this sets about making the next machine tool.

Tim Baines: But of course, when we moved to these services and you hear people like myself, advocating it's going to be a pay-per-use, the manufacturer's sitting there and saying, "Right, I'm not going to get a million dollars. I might get more than a million dollars. I might get $2 million. But it's going to take me five years to get that $2 million."

Sarah Nicastro: Right.

Tim Baines: "Or three years or two years to get that $2 million." We're going to get more money back because ultimately I'm going to provide more services to go with the product. But I'm going to be getting back over a longer period of time and I'm not going to get it back as a lump sum. I'm going to get it back as a month by month payment. And that gives the manufacturer these alarm bells. And the manufacturer says, "I can't do this. How am I going to pay for all these raw materials that I've just consumed, in providing this machine tool. If all I'm going to get back as a monthly installment, which over two or three years, is going to build up towards this 2 million pounds, but from day one, I'm just going to get a small fraction of that back, how can I afford to do that?"

Tim Baines: Now there's an explanation of how you can do it, but I'll just pause for a second Sarah and say, does that resonate? Is that the type of conversation that people have come to you with?

Sarah Nicastro: Yes. That absolutely makes sense. And I think the implications of that level of change within a company are something that is just not simple, right? I mean, it's something that takes a lot of change management in thinking but also work to put into practice and sort out what that means and how to evolve into that type of model.

Tim Baines: And it's a topic which, when people first started looking at these more sophisticated services, these more sophisticated business model and there were outsiders to it. And they looked at these and said, "This is really concerning." And I always remember some of the very early research papers, that I read about Roll-Royce. And you would see the statement that says, Rolls-Royce no longer sell jet engines, they sell power by the hour. And of course, people took that literally and they said, "Oh, so they're not selling the gas turbine?"

Tim Baines: The answer is, they absolutely are selling the gas turbine, whether it's Rolls-Royce with a gas turbine, where there is a company like Alstom, or GE. Sorry, Alstom with a train system. Whether it's Caterpillar with a big quarry truck, the asset is being sold. So I think that's the first part of the message back to the manufacturer, exploring the Servitization space. They will still sell the asset.

Tim Baines: So back to our machine tool example. I will still sell the machine tool. And I will sell it and I will get that lump sum payment for the machine tool. It's just that the customer isn't necessarily buying the machine tool. And that's what people get confused with. With these more advanced services, I'm still selling the asset. I'm just not selling it to the customer.

Tim Baines: I'm selling it to a finance organization, which becomes an intermediary in this model. And remember, a couple moments ago, I spoke about the three strands. This is part of the third strand, which we could perhaps talk about in more detail at a separate time. But if you look at these organizations, whether it's Caterpillar or whether it's Rolls-Royce, whether it's GE, they all have a financial institution, a captive financial institution. So a financial function with inside their organization, which is taking on, when the product is made, when the machine tool is made, in effect, internally, they are buying that asset from the manufacturing part of the organization and putting it into the finance part of the organization.

Tim Baines: And now there's other businesses out there, which are much smaller than people, like Rolls or GE, who are using external banks to do the same thing. So it hasn't got to be a captive bank, but external bank. Well, that's what happens, is the asset is being sold.

Tim Baines: So the manufacturer actually, going back to our fictitious example of the machine tool manufacturer, what's actually happening, is here I am. I am selling my machine. I made my machine tool. I'm going to sell it. I'm going to sell it to the bank and it's going to go to the bank. So I'm getting a million dollars right away for the transactional sale. And then I've got a guaranteed income then, for the next two, three, four, five years, whatever the contract length is, of another million pounds, another million dollars for those services, which I'm going to provide for.

Tim Baines: And this is where this conversation then, about the revenue model and the compelling case for services get so intertwined because all of a sudden I've now got an income into my business of 2 million pounds, whereas previously, I would have only got a million pounds or two million dollars, where previously I'd only got a million dollars.

Tim Baines: Now that's a very compelling argument to move forward to Servitization. But the argument doesn't exist unless you get underneath the surface of it and start to tease out what the revenue model looks like in the way that you're doing. In the way that you're speaking to me about.

Sarah Nicastro: So Tim, can you walk us through, what are some of the established and emergent revenue models for advanced services?

Tim Baines: Okay. So understand the baseline. So the baseline is the traditional transactional sale of the product. I've made the product. I'm selling it to you, as the customer, and you're paying me directly one single installment for receiving that product.

Tim Baines: So moving away from that, what you tend to hear people talk about more and more is a subscription. A pay-per-use. And notionally, a subscription model is a model we're familiar with. It's the model that you might have on a mobile phone or with a gym membership, is each month, I will have a monthly payment.

Tim Baines: Now, based in the context of what we just spoke about a few moments ago, about the fact that I will still be having my transactional sale of the product to the finance house, which will give me a lump sum back inside my organization, to go and finance my manufacturing system, the customer just experiences their subscription charge. So as a provider, I am getting both a lump sum repaid and I'm also getting a subscription from the customer. The customer themselves is paying a subscription and that subscription comprises of two components. Part of it is going back to me, the manufacturer for my services and part of it is going back to the finance, as to pay for the loan, which they've taken on, in effect, has been taken on the machine. So the customer sees a subscription charge.

Tim Baines: Now, when you look at subscription charges, that is, a lot of people are looking at the moment in time at Servitization and seeing it as being a move to subscription charging for a combination of a product and a service. Now it's more sophisticated than that, of course, when you start to look at more complex machinery because the power by the hour model on a gas turbine isn't simply a subscription. It comprises of three components.

Tim Baines: It comprises of a baseline, which says that, look, even if the asset isn't being used, you will still pay me every month, a base fee. And by contrast, it comprises of an upper fee, that says, "Look, we don't expect you to ever pay more than this top level because we don't expect you to use the asset more than so many hours in a week, so many weeks in the year, type of thing because there's a maximum utilization we would expect this asset to actually have. And it might only be 85% because above that, we need to have access to the equipment to maintain the equipment.

Tim Baines: So you've got a lower band, a higher band and between the two, you've got a variable. And the variable will be based perhaps on the number of hours used or the outcome, the number of products produced, et cetera.

Tim Baines: So some practical examples. If you look at, we've talked about Rolls-Royce, in terms of power by the hour, the idea that the gas turbine thrust, that's an airline operating company buys from Rolls-Royce, is based upon the number of hours that that machine is running for them.

Tim Baines: If you go into food production, you go in the world of food production and you think about the idea of pay per pack. If you imagine a production line and the production line is producing potato crisps. And then you've got each item going through the machine, in effect it incurs a kind of a revenue flow back to the manufacturer of the machine. A pay per pack. And you have that happening with companies like Domino and companies like Ishida, and companies like Tetra Pak. Or people like that who are playing around with these ideas about pay per pack.

Tim Baines: And then you've got this idea of pay per good pack. And if you imagine in food production, you've got a difference between paying per item produced and paying per good item produced. And that's a different form of revenue model. And they're all bundle ups, Sarah. So you've got all these different revenue models, components of a revenue model.

Tim Baines: And one of the challenges when you're thinking about an advanced service offering, is to put together that construct of that revenue model so it works for the customer. So you've got these different components, as I've just talked through. So it's a revenue model, which comprises of those and works for the customer. And it's on the base of the revenue model that the justification, the business case, can then be put in place. And then we go from there.

Tim Baines: So I'm sorry, Sarah. There's an awful lot in the revenue model conversation and I'm mindful that I've spoken at length about it. But is it helping to clarify or am I just adding more fog to an already quite foggy topic?

Sarah Nicastro: No, I think it's definitely helpful. And I think, there are certainly areas where we could really dig in and that gives us an opportunity to have you back at some point and do that. But this is good.

Sarah Nicastro: I do want to ask a couple more questions. The next is around what do you think the future trends are for these revenue models for Servitization? How do you see this kind of evolving?

Tim Baines: Okay. So I see, what I feel I've witnessed over the past few years is people becoming much more aware of a subscription charging approach. So the customer paying a subscription. And you can think about it in terms of if you stream music, you pay a subscription.

Tim Baines: Now the subscription charge is simply a fee, which gives you an availability. And somebody like myself, who lives in a place where my mobile phone reception is poor, still pays the same, if you like, subscription fee that somebody who's living in the center of town would pay. I'm not paying a fee based upon me fully experiencing the outcome that I want. I'm paying a fee which is giving me access. I'm not paying a fee which is based upon the successful receipt of me receiving an outcome. Now, of course, there are, if I look at the contracts, there are terms and conditions about my mobile phone should work under these conditions, et cetera, et cetera, and I can get a refund if I don't get it.

Tim Baines: But without going into the depths of the contract, I think the trend will ultimately go towards charging for outcome. Charging for successful delivery of outcome. And go back to my point, a moment ago, imagine a piece of production machinery inside a food processing plant. And let's say that piece of production machinery is a bottling machine. And at the moment in time, we might talk about moving to a world where the manufacturer, the production machinery is being paid on the basis of the number of bottles which are being filled.

Tim Baines: Actually, the customer doesn't receive income based upon the number of the bottles. We receive income based upon the number of bottles which have been fully filled. Have been filled in a way that the contents remain sterile, let's say, et cetera. Paid per good fill. Okay.

Tim Baines: And that's part of that evolution. So that's where I think it'll go to, Sarah. I think most businesses are quite a way off that yet. They're really in the world of even this idea about moving to a subscription-based approach and partnering with a financial institution, to enable that subscription-based approach. That's where the bulk of business is, just to exploring that.

Sarah Nicastro: I agree. And I was going to point out, one of the things I see companies doing is almost tiptoeing toward subscription but not being fully comfortable with it yet. Meaning some companies I see are still trying to keep the two worlds separate, in the sense of selling the asset, but then trying to offer service on subscription after the fact. And I think that I see how you could feel as though you're kind of testing the waters in that approach but I think ultimately, what you've talked about today makes far more sense and is a truer representation of actual Servitization, If you understand what I mean. Does that make sense?

Tim Baines: I think Sarah... Go ahead. Sorry.

Sarah Nicastro: No go ahead.

Tim Baines: No, I was just going to add something in, which was, I think this move to subscription is a very valuable component of the Servitization journey but it isn't the Servitization journey in itself. And I think it's important to recognize that a customer can still buy a product on what feels like a subscription basis. I know Goodyear will sell a tire to a customer on the basis of a monthly payment of the number of miles or kilometers that tire has gone.

Sarah Nicastro: Right.

Tim Baines: Now that's still a traditional product sale. It's just really been paid for in installments. So the shift to subscription doesn't explain the whole Servitization journey. And it's important to recognize that because we have come across situations where, because the subscription model is difficult for the manufacturing organization to grasp, the whole Servitization initiative gets derailed. Of course, Servitization is fundamentally innovation in the customer value proposition.

Sarah Nicastro: Right.

Tim Baines: Doing more and more for our customers and of which a pay-per-use subscription model makes absolute sense. But the subscription model itself doesn't explain the Servitization. It's a component.

Sarah Nicastro: Right.

Tim Baines: It isn't the journey itself.

Sarah Nicastro: That makes perfect sense. So last question for you today, Tim. What you just said, I think is an important distinction. The Servitization journey is really one that is representative of evolving your customer value proposition. Determining how you monetize that and what the revenue model looks like is one component of that journey. It does seem to be one of the biggest struggles for a lot of people, or at least if not the biggest struggle, something on which they're putting the most emphasis. So for someone listening, that is struggling a bit with this conceptually, what's your best advice or synopsis for how to, as best they can, simplify and make progress in this area?

Tim Baines: I think I would suggest three steps, really. Sarah. I think the first step has to be, to be clear in your mind, exactly what this model actually looks like. And we've talked about it in the sense of this idea that what the customer receives is different than necessarily what the manufacturer offers. And that happens because in the loop now, where we've got this financial organization, whether it's incumbent in the manufacturer or it's independent to the manufacturer, being part of the equation. So being clear in your own mind about what is the structure of the financial flows, I think is my first step.

Tim Baines: And I'm not suggesting anybody goes into huge amounts of detail, but just sits down and sketches it out and says, "Yeah, okay. I understand what the customer's going to get and pay for. I understand what it is that I'm going to produce now. I'm going to receive funds. And I understand that if there is a financial organization in the loop, what they are going to get. What's their slice of the operation?

Tim Baines: I think my second piece of advice would be that I know that this is going... For an organization to invest in this, it's got to have this business case. But of course, the structure of that business case is both dependent upon this revenue model and also the stages of maturity of the Servitization journey. Because if we're at the stage earlier on and going back to our roadmap, where we're just exploring the ideas, then the business case is simply asking for permission to explore the idea further, whereas if we're much further down the road, the business case is about much more strategic investment.

Tim Baines: So I think my second point is really be clear about the basic business case that you need to form, on the basis of the revenue model. So understanding how detailed you need to go, in figuring out the revenue model, really is determined by what's the business case you have to create at this stage of the game? So if the business case is to just get permission to do some experimentation, then at this stage of the game, the revenue model only has to be fleshed out as what it might look like with one particular customer, whereas if we're looking for permission to make a big investment, then the revenue model has to be fleshed out in much more detail with multiple customers.

Tim Baines: So I think that's the second point is be clear about almost like the stage that you're actually at in your Servitization journey and particularly, therefore, what does the business case need to comprise of?

Tim Baines: And then the third piece of advice is, if at all possible, come up with just a prototype and just experiment with one very safe organization that you can use to mutually learn from the experience. Just pilot, to try it. And through that piloting and trying, then both organizations will develop their knowledge and their insights of what this can actually look like. And then that's the platform to move further forward.

Tim Baines: And so you've got these three components really, that are coming out of it. And the first one would be clear about what that structure could look like, think about where I am, in terms of a business case and the sophistication of a business case I need to produce. And thirdly, just think about a very basic pilot at this stage.

Sarah Nicastro: Excellent. Very good. Very good advice, Tim. And we're out of time for today but I could ask you so many more questions. So we'd love to have you back again soon and continue the conversation. As you said, there's plenty of areas here to dig into but thank you so much for joining us again and sharing your perspective. We really appreciate it.

Tim Baines: Now, Sarah, thank you. I've enjoyed the conversation today and yes. Thanks for your tenacity in ensuring I actually get to speak to you today. So thank you. Take care and I hope to speak to you again in the near future.

Sarah Nicastro: You can find more by visiting us at www.futureoffieldservice.com and you can also find us on LinkedIn as well as Twitter - @TheFutureofFS. The Future of Field Service podcast is published in partnership with IFS – you can learn more about IFS Service Management by visiting www.ifs.com. As always, thank you for listening.

By Sarah Nicastro, Creator, Future of Field Service

Like most of the major service trends, predictive capabilities come up in almost every conversation I have. Some organizations have already achieved this nirvana, but many are still at the point of recognizing the potential but not yet translating it into their reality. I expect we’ll see significant evolution in this area in 2021 and that’s because while there are challenges to overcome, as with any change, the opportunities are simply too immense to delay in pursuing.

IFS conducted a global study with 3,000 participants in the Spring of 2020 to examine digital transformation priorities, and as Bob De Caux discusses in this article, found that intelligent technologies (AI, machine learning, predictive analytics and cognitive services) lead the charge with 64 percent identifying investment in this area as important. This aligns with what we see within service, because the role intelligent technologies play in enabling the shift from reactive to predictive service is a natural progression for organizations that have mastered the basics of service management.

This natural progression makes perfect sense. We know that customers are demanding far more from the service experience than for an issue to be resolved when it occurs, regardless of how efficiently. Customers want peace of mind, they want guarantees, they want uptime. Intelligent technologies and the move to predictive service are how you deliver upon these expectations. We know that predictive models eliminate or at least minimize downtime, reduce costs for both company and customers, improve customer satisfaction, and enable you to expertly orchestrate both your resources and assets because you’re gaining insights into what will happen instead of reacting to what already has. In many instances, the superior level of predictive service can be monetized to create additional revenue.

So, with all this potential, why haven’t we seen more companies master predictive service already? Well, there are a number of reasons. First, before the progression to more advanced intelligent technologies you must master some foundational aspects of optimizing service. This simply takes time – companies have been hard at work standardizing, optimizing, and automating service in order to reach a point where they can successfully move to predictive. I see that time as now for more and more organizations. Second, the shift can be a bit overwhelming. The potential is vast and opportunity significant, which means the stakes are high and the change is big. One point to consider if this rings true to you is the idea of thinking big but starting small. Just because the opportunity of intelligent technologies is vast doesn’t mean you have to realize the whole of the opportunity at once. Moreover, as De Caux discusses in the article linked earlier, these technologies build their learning upon data, so the sooner you start, the more sophisticated you can become – when you’re ready.

In addition to “think big, act small,” here are a few points to consider as you chart your path to predictive service success:

Choose your intelligent technologies wisely. The idea here is to master complexity in order to delivery the ultimate simplicity to your customers – uptime. To do so, you need to choose technologies and technology providers that will streamline, simplify, and offer cohesiveness – not complicate matters. Doing as much as you can in one platform is helpful – which means finding a provider that can not only address your short-term objectives but build upon your success over time.
Be ready to feel uncomfortable. In a reactive service world, most everything is manual. In a predictive environment, you must begin to trust the technology. Using AI where you’ve previously used manpower can be an uncomfortable feeling, for you and for your employees. You have to remember why you’re introducing the technology and what it can do and fight the urge to step in and override out of habit.
This is because predictive tools learn over time, and if you don’t allow them the space to do that, they won’t achieve the optimal output they’re capable of. Give the tools time to learn and time to work and be ready to be in awe of what they can do.
Harness the wins. As you see success, shout it from the rooftops – internally to help manage change, and externally as you recreate the customer experience. Once you start down the path of leveraging intelligent technologies, you’ll be on a path of continual opportunity – once you achieve success, you can look for ways to build and expand. At first this may feel overwhelming, but once you experience those first wins, you’ll quickly transition from overwhelm to excitement at all the possibilities.

By Tom Paquin

As a college student, I had the decidedly unglamorous job of overseeing the launch of the Nintendo Wii as a shift manager at GameStop. Due to a variety of supply chain challenges at Nintendo, the Wii launch was notorious for a supply drought that lasted well past my tenure with the company. Several years at least. That first holiday season was brutal, as furious parents took every opportunity that they could to berate the twenty-year-old me behind the counter for not possessing the ability to generate a pile of Nintendo Wiis with the power of my mind.

This was not GameStop’s fault, but it represents the natural disadvantages that go along with being a third-party purveyor of in-demand consumer products, and one that is available to be verbally abused in the flesh. Now, nearly two decades later, on top of the natural challenges of retail, digital games downloads and online commerce has led GameStop to dramatically scale back its brick and mortar footprint.

This week, though, GameStop’s stock suddenly shot up on the news that they’d tapped Ryan Cohen of pet ecommerce site Chewy to help fortify their ecommerce business on the news that online sales had shot up by over 300% during the last holiday season.

I think this is a mistake.

Listen, digital sales are great, and the Chewy guy can certainly help GameStop increase digital sales, but there’s a reason why even Amazon is investing in brick and mortar operations. The infrastructure is there, it’s up to businesses like GameStop to use it appropriately.

GameStop is, at its heart, a boutique outfit for game sales (It should come as no surprise that their Canadian footprint still carries the name of one of their acquisitions, Electronic Boutique). While brute forcing a transition to ecommerce may seem like the most expedient way to generate funds, it ignores the fundamentals of its products.

When you buy something from GameStop (assuming you’re not buying a Mega Man keychain or something) you’re not buying a commodity, you’re buying an experience. You’re buying roughly 10-100 hours of entertainment in the form of a game, or a console. You are, ostensibly, purchasing a service. It’s tangible, it’s experiential, and it’s criminal that GameStop is not using its brick and mortar footprint to capitalize on that. Experience is just the tip of the iceberg, too! Here are some ways that GameStop could rebuild themselves as a service company:

Experience

So yes—in-store demo kiosks are not new to gaming stores. They’ve existed for years, typically installed by hardware reps that want to highlight a specific game or feature of their system. But in the land where the point of sale is so often online, a video game store should be about 70% kiosks—home-grown kiosks. Kids—being the primary consumers of games—should be compelled to come in, play around, and try before they buy. In a time of near-ubiquitous digital gaming, it’s easier than ever to have consoles ready to allow kids to play demos of whatever game they want. Smart companies (especially digitally-minded ones) would allow customers, once they reach the end of a demo, to purchase the game right from this interface.

There’s obviously a lot of back-end that would have to go in to building proprietary demo machines for a place like GameStop. You’d always want one employee manning the demo areas to keep an eye on kids, make recommendations, and answer questions. You’d likely want to tie playing to a GameStop membership, so kids wouldn’t be compelled to treat the store like an arcade. You’d also want to track plays and purchases (and services, which we’ll talk about in a minute) in a single place. With that in mind, you’ll need to consider a best-in-class customer experience tool. This, combined with some proprietary software, could completely reinvent how a company like Gamestop manages customers.

Subscription

When I was a Gamestop employee, we sold a card that got you 10% off of used games and a subscription to a magazine. Not very interesting. Today, that same card…gets you 10% off of used games and a subscription to a digital version of that magazine. Redefining the footprint of a Gamestop means redefining subscriptions, too. Perhaps the subscriptions allow extended play inside the store (Gamestop’s own pasta pass) or perhaps access to a digital library of games, similar to what Microsoft has built with its own Game Pass. This one will require careful thinking about value, but should ultimately focus on loyalty, experience, and retention.

Repair

An obviously large amount of product that accounts for GameStop’s sales would be video game consoles like the Xbox and PlayStation. These things break down periodically, as do all electronic devices. An in-store service that permitted repairs alongside the typical GameStop buy-back of used merchandise (one of the tenets of their business that we haven’t talked about). By taking that a step further and offering a service alongside the buy-back, you’re building in new revenue opportunities, and, crucially, getting people into the store. Is that difficult as a third-party retailer? Of course it is, but by hiring skilled laborers (the same ones that refurbish systems at depots, another thing that GameStop already does) the potential is there.

By doubling down on digital, GameStop might think that it’s solidifying its business position for the future, but cutting and running on brick and mortar is not the recipe to success, when you already have the infrastructure in place to build an industry-defining service business. Will it require institutional changes? Yes, absolutely, but getting it right might mean the difference between success and failure.

Sarah welcomes Bobby Lincoln, Supervisor of Customer Care Onboarding at Sysmex America, to discuss how to make onboarding personal – particularly in our now virtual world, how to train without creating overwhelm, and how to retain field service talent by offering career progression paths.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about tips for successful onboarding, training and retention. We know that with some of the challenges that exist in obtaining and training and retaining talent, these are topics that are very, very important to the vast majority of our listeners. I'm thrilled to be joined today by Bobby Lincoln, who is the supervisor of customer care onboarding at Sysmex America. Bobby, thank you so much for being here, and welcome to the Future of Field Service Podcast.

Bobby Lincoln: Well, thanks for having me, Sarah. It's a pleasure to be here.

Sarah Nicastro: Absolutely. So this is Bobby's area of expertise. And I'm excited to have him here with us today to give us some tactical advice on how to have effective onboarding and training. Onboarding is obviously the very first impression a new employee gets of your company. And with talent that today has many, many options on where they spend their time, it's a very important first impression. So Bobby, before we dig into some of the things we want to touch on today, just tell our listeners a bit about Sysmex, yourself and your role.

Bobby Lincoln: Well, thank you. Yes. My name is Bobby Lincoln, as Sarah said, I supervise customer care onboarding for Sysmex. I'm also responsible for managing a group of field service technicians, which we'll discuss those later on this conversation. In brief it's a national group of field service technicians that we hire to support districts as they get trained to do installations and eventually move into a permanent service engineer role. But I do supervise the onboarding process for everyone in the service organization, I've handled this responsibility for going on little over a year and a half. So pre-COVID and after COVID experience going on. I've been with Sysmex now in year 16, which I hear is unheard of in modern world, everybody switch jobs from every three or four years. But no, I'm a lifer as they say. Sysmex is a medical device company at its core. We're a Japanese based company.

Bobby Lincoln: We are the global leader in hematology diagnostics, we are now broadening our year analysis portfolio. And yeah, it's been a wild ride. When I started with Sysmex, we were... I don't know the exact market share number, but over the course of the last decade and a half, it feels really weird saying that by the way. We've become number one in the United States and the world.

Sarah Nicastro: Awesome. And I agree with you. I think after 2020 everyone should have survived and led through COVID on their resume. It's-

Bobby Lincoln: Absolutely.

Sarah Nicastro: It's a whole skill set in and of itself. All right, so we're going to talk today about onboarding, training and retention. And I kind of lumped them together in the introduction, but they are really three different and three very critical areas. So let's take them one by one. So we'll talk about onboarding first. So to start, just tell us a little bit about what your onboarding process looks like.

Bobby Lincoln: Well, I would like to discuss because it has morphed over the last year. Pre-COVID we would have... We'd spend interviewing. We spent a lot of time on the interview process, which I anticipate most other organizations do as well. We would come into the office, in our United States offices located... Well, there's a couple now actually. But we'd send everybody to Lincolnshire, Illinois, Northwest Chicago, and we'd come in and we'd spend day one just getting to know each other. And then throughout the course of the week, we'd have different presentations, discussions, we would do a tour of the building, we'd literally get to meet the CEO if he was in his office that week, which is pretty cool. A lot of people on day three don't get to meet the CEO of their organization. But really, the big thing about our onboarding process is, the goal is two things. We want to acclimate our new employees to our organizations or better yet our culture, ultras big from where we are.

Bobby Lincoln: Also, there is a few things that we have to hit, certain metrics that every employee needs to go through and all the corporate things, the human resources, presentations, all of those things that many, if not all corporations put their new employees through.

Sarah Nicastro: Mm-hmm (affirmative).

Bobby Lincoln: Yep.

Sarah Nicastro: Okay. So one of the big areas of emphasis for you is making the onboarding experience personal. So why is this something that's so heavily prioritized? And I guess, more importantly, what are some of the ways that you accomplish that?

Bobby Lincoln: As I was thinking about this, two quotes come to mind. I'm a big quote guy. It drives my wife crazy sometimes, but you think of the godfather quote, it's not personal, it's strictly business. Well, I like to subscribe to... He's a buffoon in many ways, but I'd like to subscribe to the Michael Scott version of business. And I wrote it down to make sure in case our listeners don't quote me saying it wrong. So I did write it down, where he says, "Business is always personal, it's the most personal thing in the world." And you fast forward a little bit in that episode and he goes, "People will never go out of business." And I really subscribe to that, we subscribe to that at Sysmex, we believe we are in the people business. Why wouldn't we make it personal?

Bobby Lincoln: We hire folks to come in as service engineers, we hire them to do a technical job, but at the end of the day, that's only part of it. Our customers are going to require some fixing as well. So we spend a lot of time on making it personal to welcome them to our family. Really a family. That's our view. That's how we approach it. And when you bring someone into your family, Sarah, you've probably had folks sit down at your dinner table before, and thought, "I don't know. I don't know." We spend a lot of time on the front end so that when we bring folks in, they fit into our family and we want to acclimate them to that culture.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So when they start the onboarding process, do you have any examples of things that you guys do to make it feel personal to them? So that it's not just employee one, two, three in onboarding session number whatever? What are some tips around creating a more personalized experience for those folks?

Bobby Lincoln: So much of this conversation, I'm going to tailor it more to where we are right now virtually, because in the office when I would host this onboarding process, it's similar, but it's different. So for example, we log in on day one, everybody comes in and I intentionally start our meetings about 15, 20 minutes before all the production starts, if you will. We get to know each other. One of the fun things that we do during this process, is every single class we challenge them with icebreaker questions. And it's no fancy science behind it. I literally Sarah, go to Google and type in icebreaker questions. For example, one of them was what superhero would you want to be and why? My personal favorite is if you could upload one skill to yourself via the Matrix, if you could become Neo about anything what would it be? And we challenge them and talk to them.

Bobby Lincoln: It just naturally generates conversation. And to make it personal, this might sound crazy to some out there, but I want to create the environment of we're sitting around the dinner table where you feel virtually comfortable talking to anyone at that table. That's the atmosphere that we hope to create in our onboarding process.

Sarah Nicastro: Yeah. Now I have to assume being successful at that is more challenging in a virtual environment than it is in person.

Bobby Lincoln: It is especially challenging for people like myself that when I give presentations, I feed off the room. I love the energy in the room, you can look and see it's harder I think, especially using certain platforms where now our new hire classes range anywhere from four to eight individuals. Seeing them on a screen, reading their faces for how they're receiving the information is way more difficult this way. Whereas when you're in the room, you can see it and feel it. This way, you kind of have to... I don't want to say put on more of a show, but make it a little more entertaining, if you will. And that's how I have... I've seen it work very well thus far.

Sarah Nicastro: Mm-hmm (affirmative). Yeah. And I think that not everyone can control, I guess, size of onboarding class, but when you're doing it virtual, I think considering how many people you have in a group is important, because if it's still not as easy as reading the room in person, but if you have to keep an eye on four, or six, or even eight individuals, energies and reactions on screen is one thing if you were doing a class of 20 or 25, or any more than that, it would become very difficult to give anyone that individualized attention.

Bobby Lincoln: Yeah. We had... This was right before COVID hit last year. The November prior we had a class of 18 people in our room. There's no way we can do that in this format. In fact, we have made the decision based on occupancy levels of the buildings of local in Illinois, of what they allow, our new hire classes can only be a certain size, because of the restrictions that we have at our training center down the line. We have more frequent classes, but they're smaller.

Sarah Nicastro: Yeah. Which in the process you walked us through in terms of how you try and create more of that dinner table dialogue and really get people engaged, if you have four, six people, that type of interaction is feasible and easy to encourage. You don't want them to be able to hide behind the numbers, I guess. Okay.

Bobby Lincoln: Yeah. And I have folks that work with me. We have people throughout the organization that come in and help. And we always have one of the new hires, one of their direct managers is tasked to assist with the process. And a lot of times, depending upon the presentation, or I've got two or three screens going and they get tasked with monitoring faces. That's their job. They got to make sure the room's awake, nobody's falling asleep.

Sarah Nicastro: Right.

Bobby Lincoln: Yep.

Sarah Nicastro: It's important.

Bobby Lincoln: It is.

Sarah Nicastro: Okay. So you mentioned this a little bit, but you have these folks come in and you... How long is the onboarding program?

Bobby Lincoln: We have it broken down into three segments. It's onboarding week, which they spend day one that first week, that's onboarding, that's where we have human resources, we briefly get into anything technical in week one, it's a lot of application building, giving them the tools. "Hey, this is what you use this for, this is what you use this for." That sort of thing. Week two is our foundational class where we dive deeper into various processes and then they get put into our technical training curriculum.

Sarah Nicastro: Okay. I like the one thing you said though, about the goal is an onboarding for them to have a foundational understanding, but not an overwhelming amount of detail.

Bobby Lincoln: Right.

Sarah Nicastro: So you want to give them the critical overview that they need to be able to move into the training program, but you don't want to overwhelm them with too much at once. So talk about why you think that that concept is important when it comes to onboarding?

Bobby Lincoln: Absolutely. Are you a sports fan? Do you like football?

Sarah Nicastro: Yes, I have given up watching football since I had children so that my husband can do so because it's one or the other not both.

Bobby Lincoln: Very nice. I get the television, I've got three children, and daddy gets TV on Sundays. That's it. Four months of the year, daddy gets TV on Sunday. But I like in our training program to... All right. On day one of training camp, if you were to give your quarterback the entire playbook on day one, there is no way we could have the expectation that they could accurately and precisely execute that playbook in its entirety after that day. Impossible. If I could upload a skill like I mentioned, I would do that. But we can't, we're human beings. We have to absorb information, learn it and implement it. And so I like how we approach training to that. We have a certain progression. Once you can do A, let's do B. Once you can do B, let's challenge you with C. That's The goal.

Bobby Lincoln: Because if we overwhelm individuals on the front end, they're going to get burnt out. We're all human beings, when we get burnt out, we don't like what we do. I don't want that, I never want anybody to feel that overwhelming burnt out where they just want to quit. Any manager, or anybody in charge of any program should not want that for their folks. But it's step by step. And I liken it to the NFL playbook, you cannot expect them to do everything on day one, you have to work in steps.

Sarah Nicastro: Now have you seen a difference, Bobby, in terms of, I guess, bandwidth for consumption? Is that different in person versus virtual? So pre and post-COVID? And how has that changed?

Bobby Lincoln: I think in person I can connect and get more information through in a shorter amount of time. This platform allows, it's just too much distraction. I'm looking outside my house right now, I've got my kitchen there, I've got to say no to all the snacks that are there, or the phone might ring or... I've had folks where their kids are home, my kids have been home. It's challenging right now. It really is.

Sarah Nicastro: Yeah. And you get the Zoom burnout, right? So when you're doing onboarding in a physical location, you can say, "Okay, we're going to do the first two hours in this room, and then we're going to move to this room." And you can change scenery, you can work in activities, or breaks, or what have you when it's, "Hey, show up for your eight hour day and we're going to spend the whole thing on Zoom, and I'm just going to crush you with information." You'll start to get blank stares after so long. So I would think you've had to be strategic about how you pace things so that you can keep people engaged as well.

Bobby Lincoln: Absolutely. We've had a certain strategy for onboarding for the last six, seven years, and it's just day one, day two, day three, and so on. With this format, we've rearranged it because we don't want to overload their brain on information on one day, because by three o'clock in the afternoon, you can see it, they're done. We only really schedule out of the five days for week one, we're on Zoom half days on three of those days. And so we give them more autonomy to do some of the corporate training stuff that's online and the virtual training that we have everyone do. We give them the time to do that and do it at their own pace, because this is tough. This is tough.

Sarah Nicastro: Yeah. The last thing I wanted to talk about in terms of the onboarding experience is the emphasis that Sysmex puts on teaching the human side of the business in addition to the technical stuff. So tell us a little bit about that conceptually and then in practice, how you balance that within the coursework.

Bobby Lincoln: Sure. We understand that our customers are... We're in medical devices, that's what we do. Our instrumentation or analyzers, they are what our doctors and our healthcare workers use to save lives. The end of the day, that's who our customer is. It could be me, I don't want it to be me anytime soon, but I know that I will be a customer per se. We work really hard to understand that the end result of our instrumentation is a human being. And you can't do this job effectively if you don't have a passion for people. You just can't. You can fix things, you can do a great job fixing that analyzer, but if you're not good with your customer, that personal side of it, that human side of it, it's just not going to work. And there's a reason why we win so many awards year in and year out. Is because we focus on that. One of my favorite moments in this whole onboarding journey that I've been on camera, and if you ever listened to this, I'm calling you out.

Bobby Lincoln: We were in training and going through what our customer service model and how we approach it. And he raised his hand and he's like, "I thought you hired me to fix instruments, all we've done is talk about people all day." Right, that's what we do. That's what we believe. We firmly believe that if we take care of our customers and teach how to fix instruments, as well as down the road, making sure our employees are happy, it's just a natural circle of success.

Sarah Nicastro: Mm-hmm (affirmative). So what are some of the topics that you touch on in onboarding specifically when it comes to the human side? So obviously, you're touching on the technical side, but on this human element, what are some of the things that you start the conversation on in the onboarding process?

Bobby Lincoln: We employ a model and I don't want to give away too many secrets. But we work on human interaction, specifically how to defuse negative situations, there's everybody listening to this that deals in service, most calls from customers are not happy once, there's something that we need to fix. Something we need to resolve. Sometimes it's the instrument, sometimes it's the person, it depends. And so we spend a full day learning, teaching and every time I've given this presentation, I've thought of something new or how to interact with people. You can use it in your personal life. And it really centers around listening to others and having empathy for their situation. And we have been doing this for many years, and we just believe that if we focus on the people and we listen, and we acknowledge them and we hear them out, we can get to a successful resolution on both the technical side and the personal side of things.

Sarah Nicastro: Yeah. Yeah. And it's interesting, this is a topic that comes up more and more in terms of the emphasis on soft skills and the need to focus on that in training and talent development, because we're really beyond a world in field service, where mechanical or technical skills are all it takes to do the job. So to your point, whether you're talking about a break fix type service situation, where you might have a customer who's frustrated or upset or stressed out because they need resolution on that, or whether you're talking about even more advanced services and what it takes in terms of relationship building and being consultative and being viewed as a trusted adviser.

Sarah Nicastro: On any end of that spectrum, it becomes critical to have really good soft skills and people skills and communication skills and relationship building skills, in addition to being able to fix whatever you're there to fix, right?. And I think that that trend in my opinion is only going to continue as we look at the automation of certain tasks using technology and just the changing world of what service is demanding. I think that those skills are only going to become more important.

Bobby Lincoln: Yep. And one of the things that's really neat too, and it took me a while to learn this when I was new in field service, my background is in clinical laboratory science. I worked in a hospital lab for a little over four years and then moved into field service. But you as someone in field service, drive future sales more than you ever imagined. I didn't realize that, I just thought, "Oh, our salesperson came in and did a fantastically good job." And they're like, "We sell because of our team." And we've had customers that have been competitive takeaways, they're... Let's give some props words too. Some of their engineers, they had such good relationships that they worried about what was going to happen to them and vice versa. We don't want to... If you're my service engineer, what would happen to Sarah, if we jumped ship? That's why relationships are so important. It's so important all the way down the line. And that's why we start off with that, because at the end of the day, business is the most personal thing in the world.

Sarah Nicastro: Yeah. Okay. So let's talk then about training. So the onboarding process happens and they go through the two weeks of initiation and then they transition into the training program, right?

Bobby Lincoln: Yep.

Sarah Nicastro: Okay. So tell us what the training process is like at Sysmex.

Bobby Lincoln: We spend a week on onboarding, they come in and we acclimate them to culture and build them up and talk a lot about the customer service side. That's week one. Week two, is a foundational training, a lot of the tools that we set up week one, we learn how to use. We get involved in them. We do some introductions to the various analyzers in our portfolio. What's really neat about that particular thing is it's used to be an onsite demonstration, or an onsite thing. Now it's virtual, we're doing this virtual. And what's neat is we've used our various tools and we've got a world class center for learning that does a live stream. So they can live stream this class. It's really neat to see. Then we mix in, it becomes a mix of technical training on site in the classroom style teaching and on the job. And so our philosophy is let's get them in the field, let's start learning who their customers are. Let's hook them up with folks on their team that we trust to be a good mentor and then keep teaching.

Bobby Lincoln: And it's a good six to eight-month process to get through all of the various training that we have. And even at that point, we're very upfront. We expect, you're not going to feel comfortable until you're about 18 months to two years in this job. That's just normal. That's normal. Now everything is a bell curve. So there's some on the front end, some on the back end, but for the majority, 18 months to two years is a fully functioning service engineer.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So I know you touched on this earlier when we talked about the football playbook analogy, but talk again about, within that six to eight month training program, how you phase in work. Because from what I'm understanding, you do that in an individualized way. So you expand on tasks as they become ready for more challenges. Am I understanding that correctly?

Bobby Lincoln: Yeah, that's correct. We don't want to take somebody two weeks into the job and say, "Here, go walk into the Mayo Clinic and fix their instrumentation." That's not fair. That's obviously not fair for our customer and it's not setting anyone up for success. It really is a... Now there's an unwritten number of time or a tenure with which we gauge. Like, okay, we have to take any job, we have to be able to check the boxes. Some people check them faster, some check them a little slower. But it's really a relationship. Training is absolutely a relationship between our center for learning that gives feedback on the individual. The individual has to take ownership and perform and then their direct manager has to navigate them through their journey of training to start saying, "Okay, you know what? Bob is ready to go out and do some preventative maintenance, let's give it a shot. Go ahead, you have all day to get that done." And we see how he does. Or an installation for example.

Bobby Lincoln: We know a certain analyzer takes a certain number of days on average to fix. Excuse me, to install. Let's see how they do. Get them out there in the real world. We can train, train, train, but eventually you've got to go out on the field and play the game. And so it's incremental for a reason because we want to build knowledge, we want to provide information and then start seeing how the performance is.

Sarah Nicastro: So you build from really simple tasks to harder tasks, both to build their knowledge and expertise, and also to protect the customer experience obviously. Like you said, not having someone brand new go into Mayo Clinic to do this job. And then you pair them with mentors. And how do you determine... Does everyone have a mentor? How does the mentor process work?

Bobby Lincoln: Oh, in a perfect world, we'd all have assigned mentors and that sort of thing. What's really neat about how our districts are structured is that we have entry level folks all the way up to high performing award winners. And each team within your own organization Sarah, you probably have somebody that doesn't have a mentor next to their job description, but you know that you would send someone to work with him. That's our mentality. We know if someone needs some technical training within our group, we know who to send them to. When I was in the field, I was what we call our lead service engineer, which was directly below our district service manager. And I focused a lot on customer skills, administration type things. Technically, I was never the best at it. I'm a solid B+, solid B+ technically. But I excelled where my... I was really high performing in the customer side of things.

Bobby Lincoln: So I would mentor our new folks in that regard. So it's more of a... In the world of unlimited budgets, we'd have this fancy mentoring program, I'm sure everyone listening would love to have that sort of thing. But the real world is we know who we can trust, we go to those people and just because of the type of culture we have, they want to see their teammates do well, because that makes their job easier, it makes the customers experience better. So it's a little bit of both.

Sarah Nicastro: Mm-hmm (affirmative). Okay. Now, how do you sort of monitor performance throughout training to determine, I guess, both when to add new duties to folks? And then also, when they're ready to graduate from training?

Bobby Lincoln: There are some official documents that we have that are designed to lead a manager to gauge their service engineer’s performance. So there are some boxes they have to check. But I can't look at a team in California and say, if I'm not working with them day to day. Like I focus on my team, I know what I should expect from people as they progress. I'm not dodging the question, that's just the honest answer, it's not something that's they have to do this, they have to do this. They have to obviously, but it's more of... You just know it. It's like watching your kid learn how to ride their bike. They go for a few feet, they go for a few feet, and all of a sudden, they're riding down the street and you're like, "Hey, where did you go?" They pick it up. You know. It's feeling.

Sarah Nicastro: Correct.

Bobby Lincoln: And that's the mentality that we have. We know when our service engineers are ready, you can just tell. And we introduced them based off of the maintenance tasks, to installations, to the full blown troubleshooting job that it is.

Sarah Nicastro: So when they're ready to graduate, what happens next?

Bobby Lincoln: Oh, we throw them a big party, we send them out to dinner, and the CEO gives them gift cards. We have this really neat... Well, it's like I said, pre-COVID, we had a full graduation week which was really neat. So they would come in and there would be specific, but we would bug the analyzers in the training department and they had to fix it, they had to go in and pretend that our technical trainer was the customer, we'd have to go through the entire experience. And they had to do it unsupervised, using only their team, their tools, the resources that they had. And at the end of the week, it was, you get a little certificate and we do... I wasn't joking, we would have a very nice dinner and celebrate. Because it really is a journey. It's something that we should celebrate. I just recently finished a master's degree not that long ago. And-

Sarah Nicastro: Congratulations.

Bobby Lincoln: Thank you. Thank you. I went out for Baltimore's best crab cake and celebrated. It's fantastic. So you should celebrate your successes.

Sarah Nicastro: Mm-hmm (affirmative). Absolutely. Yeah. And that makes them feel acknowledged for their hard work and appreciated. Now when they graduate from training, this is going to kind of segue us into what happens next but what sort of the path from training on?

Bobby Lincoln: Then you get... So on onboarding, we're going to acclimate you into the company culture. From there on out, it's a slow acclamation into your specific territory, your customer base, that sort of thing. Once training is done, then you're going to be on your own more, you're going to slowly get your own territory. And as you perform and as your successes begin to mount and you prove that you can indeed do this job, then we're going to continue to expand it until we get to where we consider a fully... Not fully functional, that's not the right word. We have a certain number of designated instruments that each engineer is expected to service and carry and maintain that sort of thing. So full work load, if you will.

Sarah Nicastro: Mm-hmm (affirmative). Okay. So after training, they come into your team as a field technician. That's what you referenced earlier in terms of the team that you manage?

Bobby Lincoln: Yeah. So we've got the entry... We have two levels of entry into our service organization. One is entry level position. It's what we call our field service technician, and I'll use the acronym FST. The other way is the service engineer, which I'll call the SE. So the FST, the field service technician is an entry level position. These are folks when I'm hiring for them, I'm looking for fresh out of college graduate, folks that want to get into field service. Like right now in my team, I've hired people that had previous experience, I had somebody that had no experience in field service, they had an electronics degree, clinical lab folks, shout out to all the med techs in the room. I have someone that went to college for sales that's on our service teams. So we really have a broad scope of individuals that we look at for the FST position. The next transition to that is service engineer. So I like to describe it to use another sports analogy.

Bobby Lincoln: The FST is almost like the minor leagues. When a service engineer position arises anywhere in the country, that my team, my pole of FSTs will be the first place that we look at for, "Hey, we've got an opening in Baltimore," which is right down the street from where I live. We have an opening in Baltimore, are there any FSTs? Before we look at... We obviously open up a job wreck, but we have folks that are trained, that are ready to go, that can graduate, if you will, into that promotion of a service engineer. But we also hired directly into that role based on experience.

Sarah Nicastro: Mm-hmm (affirmative). So it's like your farm team.

Bobby Lincoln: Yeah. I like-

Sarah Nicastro: Just trying to keep the sports analogies.

Bobby Lincoln: It works.

Sarah Nicastro: I'm doing my best, Bobby.

Bobby Lincoln: That's good. That's good, I like it.

Sarah Nicastro: Okay. All right. So I can see how that benefits Sysmex. So now we're kind of talking about a few different things. I think that if you listen back to some of the podcasts that we've recorded on the topics of retention and talent and things like that, we've had a number of conversations about the fact that if your only strategy is to hire based on experience, and you think that you can continue to do that indefinitely, you're mistaken, because you're just going to run out of it. So this idea of... I like the examples you gave of all of the different backgrounds you have in your pool of folks right now, right? So they don't have to have that experience, but they have an interest, they have an aptitude, they have some abilities to develop in this role. And you bring them on at that level and you work with them to develop all of the experience they would ultimately need to do that as a role.

Sarah Nicastro: So I think that's a really smart approach from the Sysmex perspective, because you're giving yourself a source of talent by working a step or two back in the value chain, rather than just expecting to be able to hire people that have done the job for X amount of time. But the flip side of that is, it gives an opportunity to foray into field service for folks that wouldn't have the opportunity to join Sysmex that they didn't have that experience. So as you're bringing these people into the fold, talk a little bit about how an organization can structure and offer that career progression and why that's important when you're hiring younger people.

Bobby Lincoln: Oh, gosh! My immediate response would be who wouldn't want to go to work for an organization where they didn't have the opportunity to advance? I certainly wouldn't want to go into a role that had no opportunity for growth or advancement, or there are people that do. God bless them, there are people that are looking for the seven to 3:30 punch in, punch out and that's okay. I think the younger workforce that we have coming out of college, there's a few things. They want to make an impact. Everyone wants to make an impact, how does what I do today affects somebody tomorrow? What's really cool about this particular job in field service in healthcare in general, especially now, is I've taken instruments out of laboratories that had somewhere in the neighborhood of five million cycles through them. That's five million people that I helped indirectly, but I helped them. That's cool. I like that. That was neat. What I really enjoy about what we do is we not only hire people that are ambitious and fit into that culture, it is a culture, we look for folks that want to do that.

Bobby Lincoln: One of my favorite questions asked on an interview is, "Are you looking for a job, or are you looking for a career?" And it's okay. I want career people. And we have various levels of hierarchy within the service organization. So you start out as an FST, or an SE and then the natural progression is to the next level and up. And what's really fun about working at Sysmex, it's in our mission statement by the way, is we challenge each other. We challenge each other. So my boss will sit down with me and he'll say, "What do you want to do? Where do you want to go?" You'd be reasonable, you don't say, "I want to be CEO next week," that's not going to happen. But I want to go here and here and here. And so we go, "Okay, well, here's how I can help you get there. Here's been my experience that got me to where I am."

Bobby Lincoln: And so I like to do that with the folks that work for me is, I ask them, "Where do you want to go? What do you want to do?" And that opportunity, just having the opportunity to work for an organization that provides that, that pushes it, that in some ways incentivizes that, along with the impact of knowing that my job every day is going to effectively save lives, what's not to love about it?

Sarah Nicastro: Right. And those are good points. I think that in the conversations I've had with people about managing an older generation versus managing the younger generation, those are a couple of key points. One is I get your point, I'm built the same way like, who would not want to progress in their career? But if you think about a lot of tenured field technicians historically, we're happy to do the same job for 20, 25, 30 years. And they didn't have that same... I'm over generalizing. Some people do, some people don't. But if you look as a group, at the older generation of field technicians, I think you had a greater likelihood of people being happy to just do their job if it was a good job and not necessarily have that burning desire for continual evolution. And I think that's something that the younger generation looks for in an employer. And then your other point about playing to the impact and communicating the difference that your employees are making in lives, is something else that has some real appeal for folks.

Bobby Lincoln: Yes. What I like also too that we do, and it's not just... Even I had a conversation with someone who will just leave it as they're a seasoned service engineer, the PC way, right? We were having a conversation a couple weeks ago about him playing out the string, if you will. "What do I want to do?" But yet, he also called me to talk about how can I improve this specific process that my team manages? So even though we have people on the twilight side of their career, it's still a constant... There's no way to describe it, other than you got to live it and feel it. It's an innovative group that we are. And whether you're day one, or year 35, it's really the same goal. And I think we do a good job of hiring the right people, but also protecting our culture of who we are, that fosters that type of environment.

Sarah Nicastro: Mm-hmm (affirmative). That makes sense. Okay. So in terms of your evolution from the medical lab, to field service, to heading up onboarding and managing a team of field service technicians, what's the biggest lesson you would say that you as a leader have learned?

Bobby Lincoln: Oh, good grief. Don't expect me from you.

Sarah Nicastro: Okay.

Bobby Lincoln: That was a tough thing to learn moving into management, if you will. I have a certain way of doing things, I have a long track record of performance of processes that I've particularly employed, ways I handle customers, way I talk to customers. Not everybody does that. And so I learned very early on that I can't have my own expectations for my team. I can set them, I can put the bar, "Here's where I want to be. Guys, here's where we are, here's how we're going to get there." But everybody is going to do it a little differently. And so for me personally, that was one of the toughest lessons to learn. And to step back, when you're in field service, you measure success very differently than you do in managing field service. Every day you walk in, "I fixed that, I did that." When you're working with people, it's different, it's a longer game. So that's my biggest piece of advice for any new leader, is don't expect you from other people.

Sarah Nicastro: That makes sense. I like that. Any final thoughts or closing words of wisdom for our listeners on the stuff we've talked about today, onboarding, training, retention, anything related?

Bobby Lincoln: The virtual nature of everything we do now, I have found the greatest success thus far has been a couple of things. And this might sound a little crazy, because we're in corporate world, but when I say make this process entertaining, make it entertaining. However, that needs to happen. Some things that we like to do is ask silly questions or play videos during... I've restructured half of the week with entertainment in it, click on YouTube things, that sort of thing. Just because, gosh-

Sarah Nicastro: I will say Bobby and I were exchanging some messages real quick this morning on LinkedIn in preparation for our recording today. And at the end, you sent me a meme and it was just such a little thing, but it made me laugh out loud. And it's a small example. But to me after what we've been through as a world in the last year, there's no reason to not introduce a bit more levity and just personal connection to exchanges. So, yeah.

Bobby Lincoln: Make it fun. Gosh, we're doing this for eight, nine, 10, 12 hours a day, some of us. Gosh, have fun. Life's too short. Have some fun with it.

Sarah Nicastro: Yes. That's a very good point. All right. Well, Bobby, thank you so much for joining today and for sharing. I really, really appreciate it and hope you will come back and visit us again soon.

Bobby Lincoln: I would love to. This has been a blast. Let's do it again.

Sarah Nicastro: Absolutely. You can check out more of our content by visiting us at www.futureoffieldservice.com, you can also find us on LinkedIn as well as Twitter @thefutureoffs. The Future of Field Service Podcast is published in partnership with IFS, you can learn more about IFS service management by visiting www.ifs.com. As always, thank you for listening.

Dr. Ahmad Beltagui

We take it almost for granted now that devices, from mobile phones to industrial equipment, evolve through software updates long after they are released, in order to meet changing needs. Yet while the software can be customised and updated, the hardware stays the same. Manufacturers continue to sell the same products to all customers for many years. What if not only the software, but also the hardware could be updated, to keep products relevant long after they leave the factory? By combining Servitization with additive manufacturing, this could soon be in reach.

Servitization is the transformation of an organisation from transactional sales to long-term relationships with customers that deliver outcomes. These outcomes are achieved by aligning the incentives of customers, suppliers, and manufacturers around long term, sustainable value creation. Achieving Servitization requires a manufacturer to update its design capabilities and how it develops new products.

New products typically take years to reach market. Designers start by examining previous models, competing products, and alternative technologies to understand what works and what is missing. They listen to what customers say and try to figure out what customers don’t say. They feed technical and market data into design iterations, using drawings, computer models and physical prototypes, before preparing for manufacturing. And then they start to think about the service…

Compare this with software products, created using agile methods. Developers may start by understanding customers, examining how they interact with products, and often drawing on data from customer interactions with previous products. They create prototypes, or minimum viable products, to get continuous feedback. And they prioritise features, even after launch. For example companies as diverse as Microsoft and Fitbit ask customers to suggest new features and vote for which ones to launch next. In short, the product is never finished, the design does not have to be frozen, and the service can come first.

Here is where additive manufacturing (AM – also known as 3D printing, or rapid prototyping) comes in. This is a set of technologies that produce physical objects, in layers, directly from a digital design model. For large volumes of standard parts and products, AM is not useful. Yet the possibility to produce customised and high-value parts, in a few hours, anywhere in the world, with very little waste, means that updates can be launched during the lifetime of the product. Consider a long-term agreement that gives the manufacturer responsibility for maintaining performance and an incentive to improve the outcome delivered. The manufacturer monitors product performance, using data to allow preventive maintenance and, once a year, performs a full service on the product. Now consider using the data to design a new component that would optimise performance, based on this particular customer’s usage patterns, to be installed at the annual service. Since manufacturing typically depends on economies of scale, the cost would traditionally be prohibitive. With AM, however, the benefits could outweigh the costs. Variations in customer usage patterns can mean a customised design for critical components which might reduce energy consumption, prolong product life, or improve output. And if the manufacturer is paid for helping the customer improve output, or reduce downtime, then this could enable a new, more competitive value proposition to be created.

AM offers four key benefits, which can form the basis of an innovative value proposition.

Designers benefit from the possibilities to make more complex shapes that are harder to make by traditional means. A part that would typically be assembled from components made by 10 to 15 suppliers, is now made in a single part by General Electric – making it 40% lighter and 60% cheaper.
Since one-offs are possible, products can be made that better meet the individual requirements of customers. For example, Align Technology receives scans from dentists, and produces over 200,000 customised dental braces per day.
AM can also help make product innovation and servicing faster. While refurbishing aeroplane cabins, Airbus found that printing plastic panels, although more expensive than injection moulding, saved a lot of time – an additional benefit is weight savings, which are critical for applications including aerospace.
Finally, as COVID has shown, supply chain disruption is always a possibility – lockdowns closed factories, leaving customers waiting months for products. Across the world, AM was used to produce protective equipment for local use, rather than waiting for delayed deliveries. AM allows production to be nearer to the demand, helping to offer a better service.

While many have focused on the implications of AM for logistics, and spare parts in particular, evidence suggests that for spare parts, AM is more costly than storing inventory. The true value of AM comes in the ability to make product design flexible. Manufacturers can keep a step ahead of competitors by evolving their product designs even after production. For customers, this means products can be updated through physical design changes as well as software updates, as new requirements emerge. To make all this possible you need two things: Servitization, to create the incentives for continuous improvement of products in use – and AM, to offer the means.

About the author:

Dr. Ahmad Beltagui is a lecturer at Aston Business School and a member of its research centre The Advanced Services Group. His current research interests include design, innovation and supply chain management, with a particular emphasis on Additive Manufacturing (also known as 3D Printing) and its innovation potential. In this blog he looks at how product manufacturers can adopt the principles of updating and innovating in-use products, that we see much more commonly with software, and how Additive Manufacturing can achieve this, in order to better serve customer needs and support Servitization.

By Tom Paquin

Service businesses and mobile devices are not in any way strangers—I’ve written many articles about the relative maturity of the mobile service market, across a variety of industries. I’ve also spent quite a bit of time recently discussing the various business changes impacting manufacturers, whether they be industrial, medical, or high-tech (and yes, I know that these three groups don’t represent all manufacturers). So let’s smoosh those two things together and think about the unique case of mobile service for manufacturers!

There are two main things that set mobile apart for manufacturers. The first is the fact that for businesses that are just now embracing servitization, mobile service might not be very mature for them at all. In fact, the utilization of mobile devices for any business process might be a completely new process. The other element at play is the gigantic scope of what manufacturers might be servicing. A company servicing an exercise bike is beholden to different physical requirements than industrial kitchen equipment. So let’s outline some of the major considerations:

Interface
I’ve been a broken record on this for many years now, but any sort of mobile device that is used for service activities needs to have full 1:1 parity with its desktop counterpart. This is especially important for businesses embracing servitization. If service managers are accessing, say, inventory systems that reach outside of service departments, it’s important to ensure that while on a job site, they can access everything in real-time. Not having that information either increases the time from ticket to invoice as the tech shuffles back to a computer, or, more troublingly, creates inconsistencies between systems. Best-in-class service software will have that complete parity right out of the box, and it’s incredibly important.

Knowledge Management

Mobile devices have already gobbled up some of the physical libraries of our lives, whether it be our CD collection, or movies, or books. They should obviously, then, be able to do the same for the reams of reference materials that technicians often need access to. Mobility also offers an opportunity to approach and access knowledge management in ways that take fuller advantage of the form-factor. Simplistically, this can mean things like universal search. Forward-thinking companies use cameras and other mobile-specific goodies to enhance the experience through remote assistance, AR-powered step-by-step instructions, and other similar utilities. To that point…

Wearables

Please excuse me for this: Be wary of wearables. Does that mean don’t use them? No! But they’re often heavy and take up space. If a technician is only going to pull them out once a week, then what is the value? With any technology, whether it be hardware, software, or wetware, there’s no excuse for not properly vetting solutions for practicality, usability, and return-on-investment. For industrial manufacturers, wearables (especially when paired with remote assistance) may be an invaluable asset. For other types of manufacturers, the cons may end up outweighing the pros (and maybe by only a small margin!). I love a good wearable, but unless it’s deliberately deployed, it’s hard to recommend. The bottom line is this: Don’t grab every shiny object that is dangled in front of you. Not unless you can make the case for your business.

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