I remember attending a conference in the early days of my career, circa 1987, where service executives from leading computer manufacturers at that time (e.g., Digital, Control Data Corporation, Burroughs, Univac, etc.) were predicting that field service would become extinct by the beginning of the 21st century. Their prognosis was based on an observable trend that the equipment was becoming more reliable and easier to support remotely. Thirty (30) years later Field Service is a booming industry.
Indeed, many of these predications have come true. Technology has become cheaper and more reliable. Product life cycles are shorter, making it more affordable to replace older systems. M2M and remote support make it possible for many companies to resolve an issue remotely and avoid dispatching a field service engineer. Self-service options also make it possible for the consumer to manage the repair process themselves. It has also become an accepted fact that field service is a low margin business and extremely competitive in selected markets (e.g., IT).
Do these trends support the argument that field service is going the way of the dinosaur? Market data points to a different conclusion. According to the research firm Markets and Markets, the Global market for Field Service Management (FSM) software is expected to grow from $1.58 billion in 2014 to $3.52 billion by 2019, at a Compound Annual Growth Rate (CAGR) of 17.3%. Certainly these figures do not suggest that field service is going to disappear anytime soon.
Although the High-Tech Industry has experienced a number of trends which challenge the need for field service, there have been a number of trends which will allow field service to continue to survive and prosper:
- Increased use of advanced technologies: Tools such as dynamic scheduling, mobility, knowledge management, and spare parts planning software enable Field Service Organizations (FSOs) to optimize the coordination of resources (e.g., parts, labor) required to support the field service delivery process resulting in more satisfied customers, increased revenue, reduced cost and higher profits. Furthermore, disruptive technologies like IoT and Big Data provide FSOs with the tools to expand their service offerings and be more proactive in managing service delivery. As a result, customers are more dependent on FSOs than ever before for continued support.
- The advent of on-demand platforms: On-demand and SaaS based applications enable FSOs to obtain critical service applications required to manage the field service dispatch on a subscription basis. This permits FSOs to quickly acquire and deploy state-of-the art Field Service Management Systems (FSMS), which at one time required a considerable capital outlay. This means that FSOs can expense the costs associated with the new system into their operating budgets and profits and avoid building elaborate ROI justification models. As result, the economics associated with maintaining a Field Service workforce have improved.
- Greater complexity and convergence of technology: Every major technology sector ranging from information technology, to telecommunications, to plant automation and building controls, has experienced a trend of equipment becoming increasingly more integrated with microprocessors, hardware and network operating system software, broadband communications, and network connectivity equipment. This complexity has led to new requirements for fast, reliable, and high quality field service in many segments.
- Acceptance of trade-off between remote support and field service: Manufacturers now accept the fact that there are trade-offs in cost and customer satisfaction in attempting to resolve all service requests through remote support tactics. Although remote support can be very effective in lowering operating costs, and eliminating the need for field service dispatch, there is a point in every service call, where it becomes more effective to dispatch a Field Engineer. The greater the complexity of the service problem, the longer it will take to resolve remotely resulting in longer downtime for the customer and higher support cost for the service provider. Field service dispatch can mitigate these costs and help to resolve the issue sooner.
- Growth in Servitization: Manufacturers continue to look for opportunities to generate income through the provision of value added services such as installation, integration, configuration management, training and process improvement. Field Service Engineers represent the most likely resource for delivering these services. Furthermore, many Servitization business models have their foundation in IoT and connected devices. Manufacturers are of course turning to their FSOs to roll-out and deploy these solutions.
Why were the service executives in the late 1980s so far off in their predictions? I think it was because they could not anticipate how innovations in software and technology could go on creating new revenue opportunities. Conventional wisdom at that time viewed innovation as a way of cutting costs, and of course, the biggest cost, was people (e.g.., Field Service Engineers). More importantly, most companies viewed Field Service as a cost center, not as a profit center. As a result, they were not thinking strategically about innovation. It is amazing how things have changed. To quote the old Virginia Slims commercial, “we’ve come a long way baby.”
Now it is your turn. Please share with me your ideas on the future of field service. Let me know if you remember any predications from the past that are no longer true today. Tell me about your vision of the future. Will field service continue to thrive or will field service engineers become irrelevant? I’d love to get your thoughts on this important topic.