Embrace Your Competition: A Critical Success Factor

A client was recently the target of negative advertising by one of his competitors. The two-page ad depicted a cartoon image of a shark in business attire wearing a Rolex watch with the caption “Some Suppliers need a Vice President of Service because they depend on Parts and Service Dollars…”  The second page described how the advertisers’ product engineers are measured on customers use of their parts and services including a 5-year warranty,

From my perspective, these types of claims are troubling for several reasons:

  1. These type of advertisements “trash the competition”.   Sales and marketing professionals understand that going negative is not good for business.  Most manufacturers would not use this approach when it comes to selling their equipment in their primary market. Yet some believe anything is fair game in the Aftermarket.
  2. It demonstrates negativity on the advertiser’s part with respect to the role and value of service to the customer.  Their claim overlooks the importance of service to KPIs like First Time Fix rate or Customer Satisfaction.  This implies that service is not necessarily needed and not strategic to the customer or the manufacturer.  This is just flat out misleading.

I have also seen negative advertisements and claims made against Third Party Maintainers (TPMs) and generic parts manufacturers, and I don’t like it either.  Trashing the competition is just wrong.  The quality and reliability of products and services from these third party suppliers can be just as good or better as those form the OEM.   Furthermore, many OEMs also market and sell 3rd party services of their own.

The bigger issue is not about whether OEMs are better than TPMs, or if genuine parts are better than generic, or even if creating a VP of Service and/or operating service as a profit center is good for business.  Rather, the issue is competition is good for both business and in the Aftermarket for several reasons:

  • Legitimizes the market– Markets are defined by the presence of competition. To win business, competitors must actively market their products and services. As a result, customers are aware of options available to them.
  • Creates choice– Competition offers customers the freedom of choice. The theories of capitalism and free trade are built on this basic premise.
  • Improves quality & efficiency– Competition in the Aftermarket forces third parties and OEMs to continue to find ways of improving the quality of products and services offered while at the same time finding ways to cut costs and improve efficiency.   In other words, competition raises the bar and results in better prices for customers.
  • Leads to innovation– In addition to raising quality and improving costs, competition drives service providers to become innovative. Without competition, it is hard to know whether service providers would focus on finding ways to add value. Would service providers be just as compelled to invest in new systems and technology like SaaS, Mobility, and IoT if not for the impact that competition has on innovation?
  • Leads to greater cooperation– OEMs have the choice to subcontract service to TPMs/ISOs. This helps them improve their cost structure, service delivery and obtain capabilities that they may not otherwise be able to build themselves. Under this scenario, OEMs and ISOs can gain knowledge from each other and use this towards driving innovation, reducing costs, and improving quality

In summary, competition provides benefits for the customers, OEMs and third-party providers. Technology vendors can also benefit from competition in the Aftermarket.  Based on my perspective, if a company resorts to trashing their competition, they are probably troubled in some way.  On the other hand, if a company is concerned about their competition, they should probably focus within their organization to find ways to leverage forces to their strategic advantage and develop a higher value proposition.

Post your comments or questions below!  

The Field Service Trickle-Down Effect

Why SMBs Should Be Embracing The Service Evolution

The following first appeared on June 25 and was written by Sarah Nicastro, publisher/editor in chief, Field Technologies

This column is for those of you out there in the SMB category that might be reading about how large Field Service Organizations (FSOs) have transformed their business thinking, “that’s nice, but not practical for me.” You’ve got that wrong! There has always been a trickle-down effect at play. The largest service companies are early adopters of a trend, shift, or technology – they lead the charge on embracing change and adopting new business processes and tools. Then that change trickles down through tier after tier of service organization, to even some of the smallest. Just because you’re running a small service business doesn’t mean you can’t – or shouldn’t – be innovative.

In fact, research illustrates the degree to which SMBs will embrace technology in the coming years. IDC reports that by 2021, SMBs are expected to spend an estimated $676 billion on IT, with business services and software spend growing the most rapidly from 2017 to 2021. This means that now is the time for you to be really looking at how you can use the innovation that’s occurring in the field service space to your advantage. Let me give you three compelling reasons why you should be embracing field service transformation now:

#1: The Technology Is Attainable

It used to be a valid concern that SMBs couldn’t have access to the same types of technologies to positively impact their businesses that a large company could. But present day, this just isn’t true. Software has moved to the cloud and there are a number of solutions geared specifically toward SMBs that provide real business value without breaking the bank. And unless your field service operation occurs in a rugged environment, you can use said software on an iPhone or Android phone with a protective case. Even more advanced technologies like IoT, AR, and AI are becoming more attainable for SMBs.

#2: The Business Case Is Clear

If you’re still running a paper-based service business, the ROI on automation is incredible. From efficiency and productivity gains to a much more professional presentation to your customers, it’s a bulletproof business case. If you’ve gone electronic but your system is aging or not overly effective, think about researching what else is out there – the software industry has come a long way even in the last two years. You have more options at your fingertips than ever before. Keep in mind, too, that as this trickle-down effect occurs, more and more businesses your size will be adopting the technologies available. This means that acting now could give you a leg up on your competition.

#3: You Have The Benefit Of Learning From Those That Have Gone Before You

If you have a team of 15 field technicians, you’re not going to have as involved of a transformation as a FSO with 500 field technicians.  However. there’s a lot of valuable insight to glean from the experiences of those larger, leading service organizations even if their businesses aren’t the same industry, size, or scope as yours.  Research and benchmark  their strategies, methods, and lessons learned and choose what you think could be useful for your situation. It’s important to keep in mind that the real transformation that’s happening in field service reaches farther than just investing in or upgrading your software – it’s more of a business process transformation that typically involves revisiting how you deliver service and making improvements, training up and re-energizing your people, as well as investing in new tools.

In summary, the message here is that further innovation of service as a whole is inevitable – so it behooves you to embrace that fact and start determining how, as a small business, you can make changes to stay on pace.

Field Service: A Mid Year Review

Opportunities, challenges, and what lies ahead

Now that we are half way through 2018, I wanted to take some time to look at where the Field Service industry is right now.  Here are some of my thoughts on the biggest struggles facing Field Service Organizations (FSO), where some of the greatest opportunities lie, and what trends to look for in the coming months and years.

Field Service Organizations must continuously strive to maintain customer satisfaction while operating within various business constraints (e.g., cost reduction, revenue targets, labor shortages, etc.).  The challenge is these objectives are often in conflict. On one hand, companies must keep customers happy; on the other, they must find ways to lower costs and do more with less. In addition, they must keep up with innovations in technology and find ways to deliver an exceptional customer experience. At the same time, they must find ways to monetize technology investments without gauging the customer on price. Meanwhile, field service leaders in these companies are bombarded by data and information about where to invest their time, effort, and resources. This of course presents a challenge of its own.

In broad terms, FSOs should be seizing opportunities that make the highest and best use of their most expensive resources, namely talent and capital. What does this mean exactly? The answer is investments that simultaneously fulfill multiple objectives such as cost reduction, quality and productivity improvements, revenue generation, and profit enhancement. While this may seem like a tall order, FSOs can achieve this outcome by leveraging technology and being more effective in creating offers that customers value. For many FSOs this also means seizing on trends like digitization, servitization, and Uberization.

Digital Transformation has been a hot topic and big buzz phrase especially in Field Service.  I think it is one of the most important topics for FSOs. Companies who do not embrace digital transformation will become laggards at best or irrelevant at worst. Digital transformation is how companies develop innovations that lead to a better customer experience, improved operating efficiency, and increased financial value (e.g., revenue, profits, earnings, etc.) in the marketplace.   Digital transformation is what makes servitization and Uberization possible.

Many in our industry talk about IoT but the question is how does it fit into a successful FSO. As with many disruptive technologies, a small segment of field service is far along the adoption curve, while the majority is either in the early stage of adoption or just now beginning to consider it. At issue, IoT adoption in field service is a function of market penetration in the product/technology market. Adoption is the highest among large, Fortune 1000 companies and innovative start-ups in industrial automation, building automation, and home automation because these are the companies who are the furthest along in terms of integrating IoT into their product solution sets.

Many FSOs think that IoT is the answer to all their problems. They think it will solve all their labor, cost, quality, and revenue generation challenges. They need to understand that a great deal of planning is required to effectively roll-out IoT solutions. FSOs need to develop a vision, strategy, business plan, and road map that considers when, where, why, and how IoT will be implemented. They must consider which technology platform to use, what type of applications and analytics will be performed, what problems it will solve, and how to price and package it.

I have been talking and writing about Augmented Reality and Artificial Intelligence a lot because I feel that these technologies are a perfect fit for the field service space. I first became aware of them over twenty years ago and have patiently awaited their maturity and commercialization. I am bullish on them because they solve very real problems that FSOs face like labor shortage, first time fix challenges, requirements to reduce costs while improving productivity, etc. They also enable new possibilities. For example, the ability to anticipate, resolve, or avoid service events. I also like the fact they permit the creation of new income streams for service providers.

Other important trends that Field Service leaders should watch would be service marketing and sales, cognitive and predictive analytics, 3D printing, and drones. There are of course many more including the use of block chain technology which lies out on the horizon.

Stay up to date and catch more of my insights by visiting Field Service Insights, a subscription-based, community site bringing you thought provoking perspectives on industry trends and best practices.

The Impact Of Impending Labor Shortages On Field Service:

Three practical solutions for the labor shortage problem

One of the most pressing concerns among field service executives is the impending shortage of skilled workers. These concerns are well-founded. The U.S. labor market is expected to face a shortage of approximately 8.2 million workers by 2027, reports Thomas Lee, head of research at Fundstrat Global Advisors.

This shortage is fueled by two trends. The first trend is referred to as the “Silver Tsunami.” This is a term that describes the enormous number of employees who are reaching retirement age over the next 10 years due to population demographics. Within the manufacturing industry alone, nearly 2.5 million will have retired between 2015 and 2025, resulting in a 2-million worker shortage by 2025, according to the Manufacturing Institute, an arm of the National Association of Manufacturers.

The second trend is due to that fact that millions of people have dropped out of the U.S. workforce due to factors such as disability and opioid addiction or because of prison records that make it difficult for them to find jobs. In fact, the percentage of the adult population that are working or seeking employment has dropped by 4 percent since 2000.

Meanwhile, the U.S. population and gross domestic product (GDP) continues to grow while the unemployment rate remains at a 17-year low. The net impact is that the demand for labor is outstripping the supply of labor in the United States. What will this mean for field service?

Blumberg Advisory Group and Field Service Insights recently conducted an economic analysis of the U.S. field service industry. The study examined the demand for field service labor in 16 different vertical market segments. Currently, these segments employ approximately 12.6 million field workers. However, an additional 2 million workers will be required by the year 2021 to meet market demand for service and support.

Considering every industry sector is facing a labor shortage, field service organizations (FSOs) will need to adopt creative and innovative solutions to overcome this gap. Fortunately, several viable solutions exist.

Using A Blended/Variable Workforce Model
FSOs can turn towards freelancers as a strategy for responding to labor shortages. Many millennials prefer freelance work because of the flexibility and autonomy it provides them, while retired baby boomers also appreciate the ability to generate additional income by working freelance. In a recent study, we found that 77 percent of FSOs are utilizing a variable workforce to handle shortages, and two out of three are using a freelancer management system (FMS) to source and manage talent. Users of FMS platforms boast that greater agility, reduced costs, faster time to market, and improved efficiency are the benefits of this strategy.

Reengineer Service Delivery Processes
FSOs will need to learn how to accomplish better results with fewer workers. One way to do this is by reengineering the way in which service is delivered. For example, the typical way that most FSOs handle field service activities is by assigning new hires to a telephone technical support capacity and dispatching the more experienced field service engineer (FSE) to resolve on-site issues. This is counterintuitive when you consider that more experienced FSEs are the ones who are best qualified to provide remote support and guided technical assistance to new hires. By switching these roles, FSOs can leverage their workforce for better results (i.e., remote resolution, first time fix, etc.) and improve the customer experience.

Utilize Advanced Technology
Many FSOs are realizing that digital technology can play a significant role in resolving the labor shortages. For example, IoT enables an FSE to save time in anticipating and preventing problems. AR provides a platform that new FSE hires and end-customers can utilize to troubleshoot and resolve problems on their own or through the help of guided troubleshooting. Initial pilots have found that FSOs can experience up to a 20 percent improvement in first-time fix rate after deploying AR. Lastly, artificial intelligence and predictive analytics can be utilized to diagnose problems, isolate the faults, and recommend and implement corrective actions. In short, digital technologies enable companies to reduce and eliminate the need for human involvement in the field service process, permitting FSOs to do more with less.

The impending labor shortage is not a myth. FSOs must be prepared to deal with it. Within every challenge lies an opportunity. This situation is no different. With a little planning and innovation combined with effective execution, FSOs can achieve remarkable results with fewer people.

Preparing for the Fourth Industrial Revolution

Antonia Kay gives a preview of WBR's upcoming event in St. Louis

Worldwide Business Research (WBR) will be hosting the Connected Manufacturing Forum on June 19-20, 2018 in St Louis, MO. I recently had the chance to talk to Antonia Kay, the Program Director, about a few emerging trends impacting the Manufacturing Industry.

1. What are the biggest challenges facing the Manufacturing Industry today, specifically when it comes to Industry 4.0?

We are at the beginning of the Fourth Industrial Revolution, which will fundamentally change our lives. Things that we deemed impossible or futuristic as children – artificial intelligence, human-like robots, drones, self-driving cars – are quickly becoming an everyday reality. As fascinating as it may sound, these technological advancements translate into a lot of uncertainty and hard work for industrial leaders tasked with “giving a facelift” to their manufacturing ecosystems.

The biggest challenge most executives are facing today is mapping out their digitalization journey, making first steps towards connectivity and automation, and adapting their company culture to the drastic change that comes with the digital transformation. As of today, there is no one-size-fits-all approach to connected manufacturing, but top global industrials are investing in IoT, cloud computing, advanced analytics, robotic process automation, and 3D printing in order to capture opportunities early on and secure their competitive edge in future.

2. What do you see as the most important trends and opportunities with respect to Industry 4.0?

The Industrial Internet of Things (IIoT) is the word of the day.

Global manufacturing organizations are investing in predictive maintenance and condition monitoring – the move from don’t fix what’s not broken to making sure things don’t break through continuous, smart monitoring and maintenance of the factory equipment.

Augmented reality (AR) and virtual reality (VR) are big too, as they can drive equipment optimization and productivity on the factory floor and beyond.

And, of course, there is an ever-present talk about Big Data and advanced analytics – how do you collect and secure your data assets, how do you leverage it for informed decision making, product/service innovation and, eventually, improved customer satisfaction?

The opportunities that come with connecting people, processes, and assets are endless. The question is, how do you do it?

3. What is the Connected Manufacturing Forum and why should people attend?

Connected Manufacturing Forum is a networking and learning platform for Industry 4.0 frontrunners who are ready to move past fear of the unknown and revolutionize their business, one step at a time.

4. Can you give an overview of what people will get?

Connected Manufacturing Forum will offer a comprehensive coverage of the main Industry 4.0 trends and will help manufacturing leaders find answers to their toughest digitalization questions.

We have a good number of real-life case studies focused on Industry 4.0 blueprint development and implementation, projects that have helped companies like Johnson & Johnson, LEGO, Intel, Boeing, Coca-Cola and more start their connected manufacturing transformation, align teams around the same goals and prepare for future industry advancements.

Cultural change and workforce management is a big topic this year – executive leaders from Georg Fischer, Kuhn Krause, Subaru, Nature’s Variety will share best practices in preparing your organization for the Industry 4.0 revolution, delivering required training to your existing employees and expanding your talent pool by attracting new, highly skilled workers who will drive the future of your company.

Lastly, we will be discussing innovative technologies – IoT, augmented reality (AR), 3D printing, robotics, sensor technologies, human machine interface (HMI), predictive analytics – that can help companies improve processes and optimize efficiencies.

5. Why did WBR choose to produce the event, and how will it be different from other events focused on Industry 4.0?

Our in-depth market research indicated that there was a high need for an Industry 4.0 conference that would help industry leaders benchmark their connected manufacturing strategies and find solutions to the toughest digitalization challenges.

While there are many smart manufacturing events out there, the quality of our content and the seniority and experience of our topnotch speakers by far outweigh competition and what other events have to offer. Our program was developed through in-depth interviews with Fortune 500 executive leaders and is packed with case studies, panels, roundtable discussions, and interactive workshops focused on real-life challenges that manufacturing executives are trying to overcome on a daily basis. Our goal is to help them do just that and progress to the next digitalization level.

6. What will people be missing if they do not attend?

They’ll miss out on top-quality, real-life content and outstanding industry networking opportunities. If your company is going through a digital transformation, you simply can’t miss Connected Manufacturing Forum!

7. If they must come up with one reason why to attend, what should it be?

Connected Manufacturing Forum is your one stop shop for all things Industry 4.0. Have questions about digitalization? Don’t know how to roll out an IoT initiative and deliver on it? Want to learn from the best in the industry and meet the most innovative solution providers? Then hurry up and register today!

Register to join 150+ executives in a collaborative debate on the emerging Industry 4.0 trends in Manufacturing, Technology, Operations, and Advanced Engineering.

And as a bonus to my readers, use code CM18BLUMBERG to save 25% on your ticket!

REGISTER NOW

Value and Price: Understanding the Forces that Influence Service Revenue

This article was first published at Field Service News.

I am often asked by clients to help them implement strategies to grow their service revenue.

Often these engagements occur because a client perceives that they are not getting their fair share of revenue and it’s impacting the profitability of their company.

Developing new revenue streams does not happen by magic, a consultant doesn’t just waive his wand and suddenly sales take off. Increasing top line service revenue takes a little work but the results of this effort can pay off  handsomely.

All too often, Field Service management teams attempt to solve their revenue woes without first understanding their root cause.

They assume that the reason why more customers are not purchasing services from their company is that they price is too high. After all, that’s what their customers are telling them, so it must be true.

Companies that get caught up in this line of reasoning often find themselves implementing sales strategies based on some form of price concession, discount, or gimmick.

For example, charging the customer a small upfront contract fee for the right to purchase Time & Materials (T &M) service at a discounted rate, or treating service contracts as though they were a paid-up T & M retainer and allowing customers to carry unused portion of the retainer into the next year.

The assumption behind these pricing strategies is that more customers are likely to purchase the service because it is more affordable.

Unfortunately, the logic behind this line of reasoning is a bit flawed. Sure, the company may be able to secure more equipment under contracts through price adjustments. However, they will more than likely need to sell more service contracts to achieve the same gross margins as before the increase.

A company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

For example, a company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

At issue, price may not necessarily be the only reason why companies don’t buy service. This assumption would hold true if all customers are price sensitive. The truth is all customers are not. It typically a small percentage.

More importantly, customers will always point to price as their primary reason for not buying services if they are not presented with other compelling reasons to buy.

The reason many customers do not purchase service is because of the perceived lack of value.

Customers think prices are too high when they do not recognise or understand the value they will receive from the service provided.

The problem is that it is difficult to articulate the value of service.

Most companies, particularly manufacturers, don’t know where to begin.

The more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

As consumers, we’ve all become accustomed to describing value in terms of the tangible aspects of a product. For example, its size, colour, workmanship, reliability and price. However, service is an intangible. How does one describe the value of something that is intangible?

The answer is by making distinctions about it. In other words, by describing the service in terms of the problems it solves, the outcomes or results it create, and/or the time it takes to complete.

Indeed, time is usually one of the biggest value drivers in field service.

Consider this, the more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

Assuming no difference in price, which service offering sounds more appealing?

  • A) a service contract that simply provides parts and labour or,
  • B) one that provides 7-day by 24- hour coverage, parts, labor, same day onsite response time, remote support, and guaranteed uptime.

My hunch is that you picked B. This offering provides more value. Don’t you agree?

Unfortunately, most companies are not making these types of distinctions about their service offering.

It is should comes as no surprise that customers think the price is too high and don’t buy service contracts, and instead choose to take their chances and purchase service when needed on a Time & Materials basis.

Don’t misunderstand me, I am not urging field service companies to sell service features or outcomes they can’t deliver.

On the other hand, I am recommending those companies who are struggling with selling service contracts consider whether their service offerings or portfolios are defined with the customers’ perception of value in mind.

For the service to have value, it must be described in terms of the experience or outcome provided.

Does it save time or money? Does it increase machine utilization? Does it improve the quality or cost of operations?

By defining the portfolio in this way, Field Service companies can test different offerings through competitive analysis, survey research, and conjoint (i.e., trade-off) analysis.

They would, of course, need to ensure they can deliver on the promise of the portfolio prior to offering it to the customers.

Conducting this type of research, also allows companies to determine which service offerings are most optimal or in demand by their customer base.

All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions

In addition, distinctions provide the basis for differentiation and creating a competitive advantage. All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions then one that does not.

Some segments of the market may even pay a higher price for high value services particularly if they cannot purchase them elsewhere.

With the trend towards offering anything (e.g., products) as a service (XaaS) and Smart (i.e., IoT) Services, Field Service companies will need to become more adept at selling outcomes.

To do so they must be able to describe distinctions and articulate value. XaaS and Smart Services will not just sell themselves.

Field Service Executives are advised to start developing these skills now with service offered on existing equipment so they learn to be proficient at selling service contract when their XaaS and Smart Service programs are actually launched.

Walk Before You Can Run

A Blue Print for Creating an IoT Enabled Field Service Organization

Despite the enormous benefits of IoT, field service leaders face many challenges to implementing IoT platforms.   First, many of these leaders have not defined a clear outcome for IoT projects.   In other words, they haven’t created solid use case or achieved clarity around what types of actions, decisions, or benefits they can obtain from IoT.  The possibilities are endless and often overwhelming.   Second, these leaders need to create a clear road map with respect to when, how, and where they will implement IoT.  Questions often exist as to whether they should implement IoT on their existing installed base or roll-out with new product releases.   Applying IoT to an existing installed base may seem like a time-consuming and arduous task.  However, the benefits that a FSO can achieve when a large segment of their installed base is IoT enabled is significant.  Third, IoT produces a vast volume of data.  FSOs are often not sure how they will make sense of all the data or how they will ensure that actionable and measurable results will be achieved from this information.   Fourth and most importantly, many field service leaders are concerned that they must overhaul their entire service delivery processes prior to taking advantage of IoT.  This seems like an impossible order when they may have millions of dollars invested in the current ways of doing things.

Implementing IoT does not have to be this challenging or complex.  Ultimately, field service leaders desire a solution that helps them achieve actionable and measurable results in a reasonable time frame.  More importantly, they want a solution that does not bog them down with tons and tons of meaningless data and one that enables them to work with their existing service delivery processes and systems infrastructure.

Quite often, corporations that implement IoT solutions do so within the context of a Digital Transformation (DX) initiatives.  These initiatives typically involve a complete re-design of the service model.  While they have positive impact on the customer experience and share-holder value in the long run, they maybe counter-productive to the near term objectives of field service leaders to support their customers’ installed base on an efficient and productive basis.  This is because DX initiatives require corporate buy-in, multi function coordination, dedicated investment capital, and considerable time to implement, whereas field service leaders are more pragmatic and want results now.

The best approach for field service leaders is one that enables them to implement IoT in parallel to larger, corporate DX initiatives. By doing so, FSOs can realize short term gains within the context of serving their current installed base using the FSO’s existing infrastructure and service business model.  This approach reduces the requirement to re-design the entire business model and postpone the realization of results that are possible through IoT.

Field service leaders can think of this transformation as “a walk before you run” approach to implementing IoT.  It requires field service leaders to think of IoT in terms of moving from a reactive service model, to conditional, to prescriptive and finally to a predictive service model.  Reactive service is the modus operandi of most of today’s FSOs.  Service is provided when the customer acknowledges they have a problem and request a solution.  Conditional service represents the next phase in the transition to IoT.  It uses IoT technology to monitor the customers’ installed base and provide alerts to the FSO that service is required. This enables the FSO to be more responsive to customer issues, ensure first time fix, and minimize downtime.  A prescriptive model is one in which the alert includes a recommendation or instruction about what action the FSO should take next.  Predictive service goes one step further. It monitors the customer’s installed base to anticipate service events and take corrective action before they occur thus avoiding downtime altogether and eliminate operating costs and overhead from the service operation.

The time for FSOs to think about implementing IoT is when they are replacing or upgrading their Field Service Management Software.  Perhaps the requirement for IoT alone is the primary reason why a FSO would want to upgrade or replace now.  Assuming this is the case, FSOs are advised to seek out software vendors who offer IoT feature functionality as part of a complete solution. This will minimize the number of moving parts (e.g., vendors, applications) that need to be included in the solution.  This in turn will lead to reduced implementation costs, an efficient process, and less headaches for the FSO.  In addition, it will ensure that the IoT solution works within the context of existing service delivery processes and procedures as opposed to the other way around.  In this way, FSOs can walk before they run.

 

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Data – The DNA to Developing Your X-Factor in Business

If in the past you interviewed any great business leader about what it took to build a great business, they would probably have pointed to three (3) basic elements:

  1. People – Comprised of all layers of personnel, from C-suite executives to the warehouse clerks, who bring vision, creativity, leadership, and passion to bringing products and service to market, and pleasing customers.
  2. Process – The structured and disciplined series of actions, steps, and procedures personnel must complete to perform the work of the company. These processes are only as good the people who design, manage, and perform them.
  3. Technology – Systemic infrastructure that automates processes, tracks and controls transactions, and reports on the company’s operational and financial performance.

This statement is no longer complete to model modern day businesses, especially those involved in service.   Why not?  The statement doesn’t include the most crucial elements of managing a service business; data.

Data enables service companies to forecast and anticipate when, where, and how often service will be required.  This in turn enables the provider to ramp up or scale down service resources (e.g., people, parts) based on demand patterns. In addition, it provides service providers with the business intelligence they need to guarantee specific levels of service to their customers.  Furthermore, data forms the basis of a service company’s research and development efforts.  By examining trends and patterns in the data, a service company can identify opportunities to help their customers in new and better ways.  More importantly, data allows a service company to optimize (i.e., make the highest and best use of) service resources, improve service productivity, maximize efficiency, and enhance the customer experience.

Typically, when service businesses face financial troubles it is because they do not appreciate the importance of data to their business.  Without the ability to utilize data to manage service capability, service quality (i.e., performance) suffers, customers become dissatisfied and eventually leave.   In addition, service providers miss the opportunity to offer high margin, value-added services to their customers, such as 4-hour response time, remote telephone resolution, or overnight delivery of spare parts.

Data becomes ever more important as we consider one of the most significant trends impacting the Technology Industry, “Servitization”.  This trend describes the transformation that many companies are undertaking as they move from primarily selling products to generating a sizable portion of revenue and profits from services.   Ultimately, the path toward Servitization leads companies toward offering anything as a service (XaaS).

To deliver on this outcome in the high-tech industry (e.g., copiers), the provider of the XaaS solution must ensure the machine is available and running at optimal performance when the customer needs to use it.  Otherwise, the provider cannot deliver on its promise.  Neither the provider nor customer can afford extended periods of equipment downtime, or else they lose money since their revenue is tied to outcomes.   This means the provider must be able to anticipate problems before they occur and avoid them, or quickly mitigate or resolve them once they do occur.   With this data in hand, the provider can ensure resources are available when needed and that the customer receives the outcome it purchased.

Given the crucial aspect of data to managing a field service business, it is no wonder that Artificial Intelligence (AI) is becoming so popular in Field Service.  These tools enable service providers to quickly and efficiency analyze large pools of data to diagnose, anticipate, and predict service events.  Data, leveraged by AI, provides field service companies with the unique X-factor they need to achieve achieve exponential growth, exceed customer requirements, and maximize financial returns.

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Paying For Field Service With Bitcoin – Is That Even Possible?

This article was originally posted in February, 2018 on Field Technologies Online.

There has been a lot of buzz lately over Bitcoin.   With the tremendous volatility in the price of cryptocurrencies over the past 12 months, the emergence of new cryptocurrencies almost every day, and threats of government regulation, it’s hard not to take notice. Chances are you either think Bitcoin it is the next biggest thing since the Gold Rush or you think it’s the worlds’ biggest Ponzi scheme.

Regardless of your opinion of Bitcoin, you are probably wondering “What in the world does Bitcoin have to do with field service?”  In a word, “everything”.  Why? Bitcoin and cryptocurrencies are based on a powerful technology called the blockchain, a decentralized and distributed digital ledger that is used to permanently record transactions across a network of computers.  Each transaction is securely packaged together with other transactions in a block.   The data on the blockchain cannot be altered or duplicated, and no single entity owns the blockchain since its stored in a network of computers. Furthermore, the data is both anonymous and public. Anyone can view the transactions in the blockchain while the identities of the sender and receiver remain anonymous.

Another aspect of the blockchain is a “smart contract’.  This is a computer program that controls the transfer of digital currencies or digit assets between parties under certain conditions.  In other words, the smart contract provides “if”, “then” instructions regarding the sequence of events or transactions that are to occur.  The digital assets that are part of the transaction maybe in the form of data, video, audio file or text.

The blockchain provides an optimal platform for managing diverse types of transactions on low-cost/no-cost basis given the smart contract feature, the fact that no single entity controls the blockchain and that it is highly scalable and secure.  There are also several use cases for blockchain technology in the field service industry including but not limited to:

  • Managing Smart Devices and IoT –  the blockchain offers a low-cost, highly scalable, and decentralized network for managing IoT enabled assets and related transactions.  The blockchain ledger provides an objective and verifiable record of what has occurred on the IoT platform making it possible for stakeholders to verify activities that occur on the network or on connected devices
  • Asset Tracking – using blockchain addresses, a service provider can track all assets (e.g., sensors, devices, equipment, etc.) on the network. It provides an efficient and fast way of collecting information.
  • E-Commerce –  the blockchain and cryptocurrency provide an optimal mechanism for monetizing IoT related service activities (e.g., monitoring, alerts, actions, etc.).
  • SLA Management –  smart contracts can be used to operationalize and monetize SLAs and maintenance procedures related to specific events observed on the network.
  •  Spare Parts Management –  the blockchain ledger provides an effective method for tracking the history and authenticity of spare parts.  For example, the ledger can provide details of failure rates, refurbishment dates, and whether it’s an original/genuine part or generic/imitation part.

While the probability of Bitcoin reaching $1,000,000 anytime soon may seem like a pipe dream, it is highly likely that we will see commercial applications of blockchain and cryptocurrency applied to the field service industry within the 1-2 years.   In fact, there are several start-ups and Fortune 500 companies who have invested in or developed applications for field service and related industries.  For example:

  • Intel earlier this year invested in Filament a provider of blockchain solutions for Internet of Things (IoT) and the enterprise.  Filament’s blockchain technology is designed to facilitate data and e-commerce transactions on industrial and enterprise machines and sensors.
  • IOTA, whose partners include Microsoft and PricewaterhouseCoopers, is a cryptocurrency that provides IoT participants an easy, fast and safe way to exchange, buy and trade datasets.
  • IBM and Lufthansa Industry Solutions have launched the Blockchain for Aviation (BC4A) project, which concerns the use of blockchain for reliable and transparent maintenance operations.  It creates a digital ledger that allows industry participants (i.e., airlines, MRO teams, and OEMs)  to record flight events, operations conditions and scheduled aircraft maintenance checks, and cross reference these data sets against each other.
  • Engineers at GE Global Research have developed a blockchain application for the renewal energy market.  It uses smart contracts to manage how much money a consumer wants to spend on electricity, how many kilowatts they want to buy, and at what price. Energy can be purchased in real-time when it is needed based on the capacity required any given time.

It remains to be seen whether cryptocurrency will replace flat currency (cash) as the preferred medium of exchange among the world’s economies. However, blockchain technology is certainly gaining traction as a lower cost and more democratic alternative for managing transactions than centralized data networks.   While I wouldn’t recommend converting your entire stock portfolio into cryptocurrency, I do suggest we keep an open mind about how blockchain technology and cryptocurrency will revolutionize field service. In a few years, it will be used everywhere around the world for field service applications in some capacity or other.

What’s in Store at Field Service USA 2018?

Location for Field Service USA 2018

This month I interview Sara Mueller, Executive Program Director, Field Service Events at Worldwide Business Research (WBR) about challenges and opportunities facing the Field Services Industry, and why Field Service executives should attend Field Service USA 2018 in Palm Desert, California from April 17-20, 2018.

BLUMBERG: What are the Biggest challenges in the Field service industry?

MUELLER: In talking with our attendees, speakers, and people who I speak to when researching topics for our conference, I’ve found that one of the challenges that field services executives have is finding ways to do more with less.   Basically, they want to leverage technology to make things faster and efficient.   The challenge for our conference participants is deciding where to invest by determining which technologies will move the needle on service.

BLUMBERG: In your opinion, what is the most important trend in Field Service?

MUELLER: By far, its “Next Generation IoT”!   For leading edge organizations who have been using IoT for years and years, the question has now become “What do we do with all the data?”  Field Service companies are now using data to make better business decisions about Field Service operations. The conversation has moved onto the topic of using Artificial Intelligence in predictive maintenance scenarios and reducing the dependency on Field Service engineers.

BLUMBERG: One of the most anticipated annual events in Field Service is Field Service USA.  What is it and why should people attend?

MUELLER: Field Service USA is an event created by World Business Research (WBR) in 2003.  It brings together cross industry service & support executives to network, benchmark, and share best practices and strategies for advancing service operations.  The event features big forward-looking keynote speakers as well as smaller group, niche discussions so that attendees can learn and network from the wealth of people who will be at the conference.

BLUMBERG: Field Service USA seems like a more intimate event than the large industry conferences and exhibitions with hundreds of vendors and thousands of participants that business executives often attend.  Was this format created by design?

MUELLER: While we have experienced growth in the number of participants and always looking for more, WBR events have always been a small intimate gathering.  We are interested in building relationships among  executive director positions and above.  Our objective is to have the appropriate number of participants so it’s easier for them to talk to their peers.  We strive to have a balance of peer to peer exchange with participation from the best of the best vendors at our conference.

BLUMBERG: Can you provide me with an overview of they key topics that will be presented at Field Service USA 2018?

MUELLER:

  1. Transitioning to XaaS – selling a product to selling an outcome or service; it needs to be a company-wide, cultural shift
  2. Using AI to move toward autonomous service
  3. Leveraging big data
  4. Generating more service revenue
  5. Team building – recruiting, retaining, and engagement. The higher level of employee engagement the higher levels of customer satisfaction.

BLUMBERG: What is going to be different about Field Service USA this year?

MUELLER: We attempt to build on the success of previous years by keeping what works and getting ride of what doesn’t.  This year we will have more talks around to topics of Machine Learning, AI, and AR.  We are also adding discussions on the topic of service revenue and team building, and this year we’ve added “industry board rooms” which are industry focused board rooms, on the first afternoon of the main day of the conference.  Of course, we are still offering the same interactive formats that get people talking to people who have been in their shoes before. We are also keeping things fresh by bringing in new speakers from Otis Elevator, Robert Bosch, Nokia, BP, Comcast Business, Haier America, Dish Network, Jacobs Engineering, and NCR to name a few.

BLUMBERG: Why did you choose to make these changes?

MUELLER: This event has grown. Its the largest event that WBR produces.  We want to give people the big conference feeling by having key notes but will also want to bring people together talking.  I found that when I was doing my research, every business executives brought up some aspect of team building, recruiting, training, and employee engagement. Given the fact the service revenue generation is one of our main themes and more of our attendees are responsible for this, we’ve added it to our agenda. It ties back to the shift in the business model from cost center to profit center.   We see the attendees are positioning themselves that way (e.g., as profit centers) and more and more of our attendees are focused on marketing issues.

BLUMBERG: What is one thing that people will miss if they do not attend Field Service USA this year?

MUELLER: We all get so caught up in the day to day of our jobs and group think within our own companies that we lose sight of the big picture.  Its good to get other perspectives.  People attending Field Service USA consistently have been leaders in the markets they serve, and I think its because they attend.

BLUMBERG: If someone needed come up with one reason why to attend, what should it be?

MUELLER: People will benefit no matter what their objective is for the next 12 months to 3 to 5 years.  We have small group discussions and lots of carefully planned out network events and parties.  There are lots of ways to build relationships, have fun, network and find new answers.

Does Field Service USA 2018  sounds like an event you would like to attend? Register using code: FS18BLUM to instantly save 20%* on your ticket! Book online at www.fieldserviceusa.com or call 1-888-482-6012.