7 Strategies To Build A Powerful Technical Support Team

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In this week’s blog post I am sharing an article written by Alice Methew. Alice is a professional writer and has written articles for many different sites. She is committed to the pursuit of excellence through writing and has a passion for technology.

What are the roles and responsibilities of a technical support team? First of all, you need to realize that the technical support team is the flag bearer of a business’ goodwill and reputation. Of course, this team has to play a big role in the process of client retention. Unfortunately, many business owners have not yet realized the true significance of a technical support team, because the benefits that this team offers are not tangible. On the other hand; smart business owners give utmost importance to technical support team and they continuously monitor the performance of this team to maintain the productivity of the business at an optimal level. Here are the 7 strategies to build a powerful technical support team based on lessons learned from Enterprise Systems, a leading IT Support Organization in Houston, TX.

1) Hire technicians who have the potential to maintain a harmonious balance between technology and humans

If you want to build a good technical service team, you have to appoint the right people. It is a well-known fact that there should always be smooth coordination between various departments within your organization to ensure optimal productivity. If you want to minimize the number of issues that the technicians have to tackle, your technical support team should have the potential to coordinate efforts with other company business departments. That is exactly why you need to hire support engineers with adequate technical knowledge and they should also have a proper customer support background. If a technically accomplished professional does not have the patience and ability to listen, he can never be a good member of a technical support team. In such a situation, you may have to deal with a lot of problems.

2) Proper documentation of problems and their solutions

Many tech support teams often get stuck on problems even if they had dealt with similar issues earlier. This situation occurs mainly because of the fact that the technical support team does not have a clear cut list of standard procedures to address frequent problems. Whenever the team gets a call, the members keep on re-inventing the wheel and this situation does not help you build a strong team. You have to make sure that the technicians are preparing notes on how they resolve each problem. These notes must also be handed over to other team members as cheat sheets. Then, a list can be compiled to form a quick reference guide. This approach can reduce the problem resolution period from hours to a few minutes.

3) Show the team members the correct career path

When it comes to highest turnover rates, technical support field stands tall. Many company owners complain that their technical support team members are leaving the company too often. Within the IT Industry, most members of the support team become developers or programmers after a short period. You must understand that there is no point in holding them back. You have to provide continuous training and flexible work hours so that they can learn faster and keep them updated. Business managers must meet them frequently to talk about the career path and goals. You have to give them opportunities to move up in your own organization. In such a situation, they are not going to leave your organization like many people do.

4) Ask the team to focus on satisfying the customer

All dynamic technical support teams strive hard to track measure and analyze the operations. In such a situation, the teams clearly understand what is working and what areas demand improvement. When a support team prepares these critical data points, they can easily improve the existing processes. If you want to build a good technical support team, you have to realize that all metrics should be geared towards achieving satisfied customers. The bottom line is that you must ask the support engineers to focus on one metric; customer satisfaction.

5) Get curious and passionate people

You can hire people who have a natural curiosity to find out how things work and progress. People, who come with this attitude, are excellent options for placing in the technical support team. Human resource managers must identify candidates who are passionate towards assembling things, tinkering with equipment and solving puzzles. These types of people possess the right frame of mind and they also have the patience to address ever emerging complex problems.

6) Do some simple calculations

When you do some simple calculations, you can come to know how your technical support team is performing. First of all, you need to check how many cases your support team is handling every week. Then, you also have to analyze how many cases are being handled by other departments and how many of them are being solved completely. This data can be used to analyze the existing performance of your technical support team in a realistic manner.

7) Set up different types of goals

When you have the existing performance data on hand, you can understand where you are heading and rebuilding process can be done by setting short, medium and long-term goals. The short term goals are for rebuilding your technical support team and they also allow you to choose the right tools that are being used to accomplish this rebuilding process. Short goals also allow you to put them in place to make the rebuilding process highly effective. Medium term goals can be set up to handle all calls within the team before the customers become really annoyed. Long term goals are primarily meant for reducing support costs. These goals can be materialized by lowering costs per product line, customer attribute, and product launch. This systematic three-step method of approach is going to deliver excellent results.

Many companies follow a wrong philosophy of maintaining cold vibes with customers. Quite often, they end up making a lot of mistakes. You cannot build a good technical support team by undermining the importance of customer requirements. You must try to develop a culture within the team that focuses on customer satisfaction and in such a situation, your customers will start noticing and appreciating it with immense satisfaction. The bottom line is that if you follow these 7 strategies, you can build a powerful technical support team in an uncomplicated manner.

Got a question? Click here to schedule a free consultation

The Fine Art of Selling Services

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Managing a Field Service Organization (FSO) as a profit center has become a strategic imperative for many companies.  In order to carry out this mission, field service executives must continually focus on top-line revenue growth.  Yet, research indicates that nearly three-quarters of FSOs are struggling to achieve this objective. My personal observation is that they haven’t mastered the fine art of service sales and marketing.  At issue, field service executives often confuse marketing with selling, and selling with marketing.   While there is some overlap, the two functions are significantly different.

Marketing is Not Selling

Marketing is a set of processes, activities, and/or instructions a company utilizes to create value and customer demand for the products and services it offers.  Basically, this is about turning a need into a want through promotional activities.  According to Jon Janstch, of Duct Tape Marketing fame, marketing is getting someone who has a need to know, like and trust you.

In contrast, selling involves the fine art of persuasion.  It requires that the salesperson utilize a planned, personalized communication to influence a customer’s purchase decision.  Not only must a salesperson uncover a customer’s needs and wants, they must persuade the customer as to the merits of buying their product or service.

Telling is Not Selling

A common sales strategy that FSOs utilize is to involve field service technicians and managers in the sales process. The conventional wisdom is that since these people deal with customers every day, they are perceived as individuals the customer can trust for advice. As a result, they are in the best position to advise the customer on additional products and services they may need to purchase from the company.

This strategy is based on the premise that the field service technician/manager functions as a brand ambassador. Their focus is on building a relationship by solving problems, uncovering new opportunities, and telling the customer how their company can help.  This seems more like marketing than selling.  Indeed, the problem with this approach is that it often results in free consulting. In essence, the customers may not buy but instead rely on information their brand ambassador shared with them and seek competitive bids, or simply choose to do nothing at all.  It also assumes that that service salesperson can spot opportunities and effectively open up a sales dialogue with their customer.

A Structured Sales Process

Field-service leaders can avoid free consulting, increase their prospects, and improve their team’s sales closing rate by implementing a structured sales process and training their service-sales people on this process.  The sales process consists of three basic steps:

  1. Relationship Building: There are two critical aspects here. The first is bonding and rapport. This is how a salesperson gets a customer to know, like, and trust them.   A sale cannot be made without bonding and rapport.   The second aspect is known as an upfront agreement. This requires mutual consent between the salesperson and customer that each is open and willing to participate in a sales conversation. It also requires that when asked about moving to the next stage of the sales process, the prospect can provide a yes or no answer.  Upfront agreements help salespeople know where they are in a sales process with a customer and keep the sales process from stalling or falling apart.
  1. Qualifying: Sales processes may break down if the salesperson hasn’t done a good job of qualifying the prospect.  Qualification is more than just determining if the client has a need and budget.  It’s really about understanding their pain (i.e. problems).  The truth is that people don’t buy just because they like something; they buy to alleviate a pain they are currently experiencing or will experience if they don’t own the product or service. The greater the pain, the more likely they will buy.  It’s the job of the salesperson to uncover this pain.  Once done, the salesperson can discuss the budget that is required to resolve this pain.  In other words, the “pain conversation” puts the budget discussion into context for the customer.  Of course, understanding how decisions are made within customers’ organizations is also part of the qualifying process.
  1. Closing:  The closing step involves two parts, fulfillment and post sell.  Once you understand the customer’s pain, budget, and decision process then you can have a conversation about how your service will solve their pain, what the investment will be, and what it will be like to work with you after they accept your proposal.  That’s basically what fulfillment is about.  Post sell means confirming they are happy with the decision they’ve made.

Iterative Process

It is important to understand that the sale process may involve multiple, iterative conversations. This is because very few products and services can be sold in the first conversation.  The failure of the salesperson to effectively address one step of the process may impact their ability to address the next stage and thus jeopardize the sale.   If this happens, the salesperson must go back and repeat the sales process from where it failed.  This may mean they have to review or revisit previous steps with the customer to get the sale back on track.   It’s also important that understand that “speed kills” when it comes to the sales process. In other words, rush the sales process and you may lose a customer.

Think about your last conversation with a salesperson.  If you purchased from them, chances are they effectively addressed every stage in the sales process.  If not, it was probably because the sales process broke down.  Also, evaluate your own company’s selling process and closing rate.  Does your company follow a structured sales process or are service salespeople simply winging it?   If you follow a process like the one outlined here, do you know which steps are working well and which require improvement? If you’d like to learn more, schedule your free service sales strategy session today.

Turbocharge Your Service Business

Maximize Revenue through Market Research

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In my last series of blog posts I wrote about what it takes to build a Successful Service Marketing™ program.  To review, I described the strategic concepts of service marketing and introduced you to the 7 Ps. These are of course very important concepts. However, there are a few more concepts you’ll need to master if you are going to win at service marketing. If you’re going to be successful at service marketing or any kind of marketing, even if it is product marketing, you have to have good knowledge of your market.  You get that knowledge through market research. If you know who buys, what they buy, and why they buy then you can sell more to them and get them to buy more often.

Market research also provides the insight needed to communicate effectively with your current and prospective customers. It helps determine what messages, what images, what ideas will resonate with them and get their interest to want to buy from you.  Marketing is about taking a need and converting it into a want. You may need a watch to tell time but you want a Rolex because of the status and prestige associated with owning one.  So when you have really good market research of who buys, what they buy and why buy, then you can construct your message in such a way that you turn a need to a want.   In the field service world, you customers may need to know that they can get service on their equipment when it is down but what they really want is a guaranteed Service Level Agreement with a 4-hour response time.

Good market research not only helps in creating a service portfolio your customers really want but it helps in developing an optimal pricing strategy for that portfolio.  Chances are that you are familiar with cost plus and competitive pricing strategies. With cost plus pricing, you calculate what it costs to deliver service and then mark it up by an amount to cover you profit.  With competitive pricing strategies, you conduct market research to find out what your competitors are charging and then price your services at a lower amount.

A third type of pricing strategy is called value-in-use pricing. It basically involves measuring the economic value or loss to the customer of not having the service available in a timely manner.  This can be significant.  For example, a manufacturing facility may lose millions of dollars every hour its machines are down.  Therefore, they may be willing to a pay premium for faster service.  Market research can help you understand your customers’ value-in-use and determine whether or not you should pursue a cost plus, competitive, or value-in-use pricing strategy.   You’ll need to understand all three pricing strategies and how to effectively leverage market research to maximize service revenue and optimize profits.

The final aspect that you have to master to win service marketing is called ‘‘Invisible Selling”. This is based on the premise that you win business not by pushing your offers onto prospects, but by pulling customers towards you. One of the ways you pull customers to you is through indirect marketing as opposed to direct selling.  What’s an example of indirect marketing?  It’s an article or white paper that demonstrates that your company understands the problems that companies in your market are experiencing and that you have solutions to these problems.  It’s about using social media and public speaking opportunities to influence others to want have a conversation with you to learn more about what you do, and how you can help them.   It’s about positioning you and your company as experts and trusted business partners.   By the way, seeding your thought-leadership content with market-research data is a sure-fire way to build credibility with current and prospective customers.  Once you establish credibility they follow you and then it’s only a matter of time until they become your customers.

When you put all the elements of a Successful Service Marketing™  program together, when you fully understand the strategic concepts of service marketing, when you effectively apply the seven principles of service marketing, when you learn how to optimally price your services, when you use market research effectively, and implement an invisible selling strategy, you’re going to experience incredible results.  Your marketing program will be extremely successful, your sales will take off, and your business will skyrocket.

If you are really interested in achieving extraordinary results, then check out my online training course where you will learn strategies, tactics, and insights for Successful Service Marketing ™. As a starter, I’ve put together a brief video that describes the course content. You can access it here

Got a question? Click to schedule  a consultation.

The Service Marketing Mix

Understanding the 7 Principles

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One of the reasons service executives struggle when attempting to grow their businesses is they try to apply product-marketing concepts to service marketing. This is like trying to hammer a square peg into a round hole.  The 4 P’s marketing mix is one such concept that works great for products but not for services.  It’s based on the theory that the success of a company’s marketing program is based on how well the company manages strategies and tactics related to product (i.e., design, form/factor, etc.), price, promotion (e.g., sales, advertising, etc.), and place (i.e., distribution).

The problem is that these 4 P’s do not apply to services. First, service products are intangible and difficult to describe.  This begs the question, how can you promote something that is difficult to describe?  Another problem for service marketers is that place has a very fuzzy connotation in service marketing because there are multiple entities involved in service distribution. Sometimes they cooperate, other times they collaborate, and still other times they compete.  Services can be offered by one entity, ordered through another, and delivered by a third.  Without well-defined product, promotion and place strategies, all that is left is price and that becomes a slippery slope for service marketing.  Sales and marketing can never be just about prices because customers will always find a way to negotiate price.  In product marketing, the 4 P’s makes it possible for a seller to justify the price.

For the past 20 years, I’ve devoted a great deal of time and resources to understanding this dilemma, in the process developing my own theory about service marketing.  I determined that a Successful Service Marketing™ mix is actually based not on 4 but on 7 key principles.  These principles are:

  1. PORTFOLIO: Often described in terms of a service-level commitment, such as 24/7 with a four-hour response time. The more distinctions you can make to define your service portfolio, the more likely you will be to fulfill the needs of prospective customers.
  2.  PROVIDER: Tangible elements of your service infrastructure, such as your call center, self-service portals, enterprise systems and service technology that make it possible to deliver on the promise of your service portfolio.
  3. PROCESS: The steps your customer must take to request the service, and the tasks that occur to deliver the service. For example, performing front-end call screening and diagnostics before dispatching a field technician.
  4. PERFORMANCE: Evidence that you can deliver on your promise, such as KPIs, customer satisfaction results and customer testimonials.
  5. PERCEPTION: Your ability to win business and retain satisfied customers is based on your ability to influence their perception of you. This goes beyond simply promotion through advertising, branding, and communications. It gets to the essence of who you are, what you stand for, and how you portray yourself in the market.
  6. PLACE: Services distribution channels can be complex.   Quite often, consumers can purchase service from one place, order or request it from another place, and have it delivered to them at a third place (e.g., onsite, depot, remote, etc.).  Sometimes it’s the same company delivering this service. Other times it’s not.  Regardless, the service marketing mix must deal with these complexities.
  7. PRICE: Of course, there is always the issue of price. The important thing to remember is that price is a function of value in use and perception that consumers have about your company (i.e., expertise, experience, capability).

Many people have asked me why I haven’t included “People” as one of the Ps in my service marketing mix.  While people are important to the success of any endeavor, I feel very strongly that their ability to deliver exceptional results is a function of the 7 Ps that I’ve identified above and not the other way around.  Ordinary people can achieve extraordinary results when there are great strategies and tools in place.

Please let me know what you liked about this blog and your key takeaways.  If you’ve found this blog of value and think your colleagues or business associates could benefit from it, kindly share it with them.

If you are really interested in achieving extraordinary results, then check out my online training course where you will learn strategies, tactics, and insights for Successful Service Marketing™.As a starter, I’ve put together a brief video that describes the course content. You can access it here

 

Keys to Successful Service Marketing

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Service Marketing was a relatively new concept when I began my consulting career back in the 1980s.   High-tech service companies were just starting to run as profit centers and focus on marketing their services.  As a result, there was very little attention placed on service marketing in business schools at that time. The emphasis was on product marketing.  All the marketing literature and textbooks, all the courses, and all the conventional wisdom on the topic of marketing were centered on products.  I learned very early in my career that it is extremely difficult to market services using product-marketing ideas.  It was like trying to hammer a square peg into a round hole!

I really wanted to help my clients solve their service-marketing challenges so I began an amazing journey of helping these clients discover, develop, and implement best practices for successful service marketing.  First, I learned as much as I could about product marketing and then looked at which aspects applied to service marketing and which didn’t.  Basically, I reverse engineered product marketing to determine lessons I could learn when it came to a different kind of marketing altogether.

Second, I identified companies who already were doing a good job at service marketing. In other words, they had already gone a long way to crack the code of service marketing.  I researched what they were doing well and advised clients to model their success on these early exemplars.  In essence, I bench-marked the best practices in service marketing and then showed my clients how to implement them.

Third, I found in one individual a great teacher, mentor, and coach who helped me excel at service marketing.  That person was my late father, Donald Blumberg.  A prolific author and speaker on the subject of service strategy, he taught me what it takes to build a profitable service business and guided me in establishing my own perspectives on service marketing.

As a result of our collaboration, I developed my own understandings about successful service marketing.  I started to write articles and give speeches on service marketing, which led to more consulting work, which in turn led to greater learning on my part.  Over time, I became an expert at service marketing as I helped my clients increase revenues, boost profit margins, and improve market share.

I’m sharing this information because I want you to know that you can achieve these results, too.  More importantly, you can accomplish them in a fraction of the time it took me.  You don’t need to spend years reverse engineering product marketing or bench-marking best practices.  Instead, I’ve created a new online training course that will provide you with strategies, tactics, and insights for Successful Service Marketing. ™ As a starter, I’ve put together a brief video that describes the course content. You can access it here.  I am also providing a $100 discount on the purchase of this course during the month of May.  To take advantage of this discount, enter code SMK100 when you register.

Please let me know what you liked about this blog and your key takeaways.  If you’ve found this blog of value and think your colleagues or business associates could benefit from it, then kindly share it with them.

 

Big Data & Analytics – A Transformational Journey

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Last month I had the good fortune to attend the Reverse Logistics Sustainability Council (RLSC) and Warranty Chain Management (WCM) conferences.   Big Data & Analytics was a topic that gained much prominence at both of these conferences.  Indeed, this is a subject that is gaining much attention in business and academic circles these days.  Interestingly, there is a general consensus among academics and industry thought leaders that Big Data Analytics is one of the most misunderstood and misused terms in the business world.  For some business professionals, the term analytics applies specifically to performance metrics, for others it has to do with unstructured data sets and data lakes, while still others think it relates to predicting the future.

Big Data refers to the volume, velocity, and variety of data that a company has at their disposal. Analytics applies to the discovery, interpretation, and communication of meaningful patterns in data.  The truth is that there are actually four (4) different types of Big Data Analytics that firms can rely on to make business decisions.

  • Descriptive Analytics: This type of Analytics answers the question “What is happening?”  In a field service organization (FSO) this may be as simple as KPIs like SLA compliance or First Time Fix rate.  The exact measurement tells an FSO how well it is doing when it comes to fixing problems right the first time and meeting customer obligations for response time.
  • Diagnostic Analytics: Understanding what is happening is important, but it is even more important to understand why something is happening.  This is how managers and executives can identify and resolve problems before they get out of hand. Diagnostic Analytics provides this level of insight, for example by pin-pointing why First Time Fix Rate is low.  Maybe it’s because the company is making poor decisions about which Field Engineers (FEs) are dispatched to the customers’ sites.  Or, perhaps selected Field Engineers do not have access to the right parts when they arrive on site and must return for a second visit.
  • Predictive Analytics: Ok, so now we know why something is happening. Wouldn’t it also be good to know what is likely to happen next?  Predictive Analytics provides this level of insight. In other words, it provides a forecast about what may happen if a company continues to experience a low first time fix rate.  For example, it could show the specific impact on customer satisfaction or the measurable effect on service costs and/or gross margins.   In this case, Predictive Analytics helps a company understand with a high level of statistical confidence how long it may continue to maintain the status quo before financial problems may arise.
  • Prescriptive Analytics: The final component of analytics is Prescriptive A This level of information helps a company understand at a granular level of certainty exactly what it should do to resolve a current situation and avoid future problems.  For example, Prescriptive Analytics may reveal that a company must ensure the field engineer has the right parts on hand prior to being dispatched to arriving at the customer site.  The Analytics can show which parts must be available and where they should be located.

In summary, Analytics takes the guesswork out of decision-making.  Instead of relying on intuition or prior experience, service executives can make sound business decisions based on objective analysis of data.  As a result, the probability of making the right decision increases.   Relying on Analytics to drive business decisions involves a transformational journey.  As innovative as it seems, a company cannot just start using Predictive or Prescriptive Analytics. It must first become proficient with Descriptive Analytics before it can leverage the power of more advanced analytic models.    This journey is not just about the data.  Many managers mistakenly believe that they must have enough of the right data to make Analytics work.  The truth is that we all have a wealth of data at our disposal.  Our challenge is finding the tools and technology to process the data, making Analytics a winning business proposition.  This begs the question: does your service organization have an optimal system in place to harness the power of Analytics?  If you are not certain, it may be time to conduct an audit and assessment of your infrastructure.  To learn more, schedule a free consultation today.

Strategies for Reducing Warranty Costs

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Warranty obligations represent both an expense and a liability to Original Equipment Manufacturers (OEMs). As a result, anything that an OEM can do to minimize warranty expenses and liabilities will have a significant impact on the balance sheet and bottom line. In the high-tech industry, warranty coverage often includes repairing defective products as opposed to crediting or replacing them. Warranties of this nature involve three (3) cost components: 1) Warranty Terms & Conditions, 2) Service Delivery, and 3) Product Reliability and Maintainability.

Service Delivery represents the largest of these three components and comprises approximately two-thirds of warranty costs. Approximately 55% of service delivery costs are attributed to repair activities. The remaining 45% of costs are evenly distributed between parts, logistics, and overhead (e.g., customer service, IT, etc.).

Among the three (3) different categories of warranty costs, service¬–delivery costs are the most difficult to manage and improve. By comparison, costs associated with warranty terms and conditions and product reliability and maintainability are easier to manage. OEMs can reduce warranty expense and liabilities by adjusting terms and conditions to make them more favorable from a cost-burden perspective. OEMs can also design and engineer better products thus reducing product reliability and maintainability costs. In addition, the time frame and investment required to plan and implement these types of improvements are smaller when compared to service delivery. On the other hand, these improvements may have a limited life span. In other words, an OEM needs to revisit terms and conditions as well as product reliability and maintainability issues with every new product release.

In contrast, a significant amount of time and investment is required to improve costs associated with service delivery. For example, it may take months or years of planning and hundreds of thousands of dollars of investment to realize service-delivery cost savings. However, the improvements are sustainable over a longer period of time because they don’t just affect costs associated with one-time product launches. Instead, they benefit subsequent product launches over a multi-year period.

The reason it takes more time to implement and greater investment to achieve cost savings in the area of service delivery is because it typically requires improvements in processes, infrastructure, and people (i.e., training). Examples of the types of strategies for reducing service delivery costs include but are not limited to:
Automating warranty claims-management processes to reduce warranty processing costs
Improving call management procedures to validate entitlement, troubleshoot and diagnose calls remotely, and avoid costly field service visits
Implementing dynamic scheduling software to improve field-engineer productivity and reduce travel costs
Adopting a Variable Workforce (VWF) model to lower field-service and associated overhead labor costs
Utilizing knowledge-management tools to improve resolution times, reduce No Fault Found rates, increase first time fix rate, and improve labor efficiency
Implementing advanced planning and forecasting tools to optimize spare parts stock levels and reduce inventory costs
Making it easier for field engineers to identify, locate and order spare parts thereby improving service efficiency and avoiding repeat calls due to lack of parts

In summary, the challenges associated with reducing service-delivery costs should not prevent a company from making the necessary systemic and procedural improvements since the gains in cost savings, service productivity, operating efficiency, and customer experience can be significant.

The Five Most Important Trends Impacting the ITAD Market

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In my last blog post, I provided a high level summary of key findings from the recent market research study we conducted for Arrow Electronics on the topic of IT Asset Disposition Trends.   Now that I’ve piqued your interest, I thought I’d share five important data points from the survey results:

  1. 9 out of 10 companies in 2014 have a formal end-of-life ITAD strategy
  2. Nearly 2 out of 3 companies surveyed choose to have a 3rd party service provider manage their end-of-life assets
  3. The most important factors in selecting a 3rd party service provider are adoption of compliance standards, well documented chain of custody, and high quality reporting
  4. 95% of companies feel that R2 and/or e-Stewards are the most important environmental standards related to ITAD
  5. Nearly 9 out of 10 companies feel that R2 and e-Stewards should be combined into a single standard

 

These findings validate the fact the ITAD has gained increased attention among not only IT Managers but C-suite executives as well.  However, these findings reveal that most companies do not view ITAD as a core competency.  Instead they choose to outsource it to 3rd Party Service providers.  This explains the increased level of competition within the ITAD market as more and more companies enter this space.  It is not just start-up specialized ITAD vendors that are pursing this opportunity but well established IT Service providers and distributors like Arrow Electronics who view ITAD as a natural extension of their product and service offerings.

Given the large playing field of competitors, end-customers are becoming increasingly selective about who they choose to conduct business with.  Among the most important factors are compliance standards, documented chain of custody, and IT reporting and analytics.  It is interesting that while R2 and e-Stewards are perceived as the most important environmental standards, an overwhelming majority of end-customers believe that they should be combined into one, single standard. This suggests that these standards are used interchangeably by end-customers.  Possessing one or both of these industry standards is simply not enough for an ITAD service provider to differentiate itself in the marketplace. While many companies can lay claim to a well-documented chain of custody and superior reporting capabilities, we believe that its additional industry standards such as RIOS, ADISA, NIST, and knowledge of best practices to minimize risk, reduce waste, and maximize recovery values that set one ITAD vendor apart from one another.  If you haven’t read the Arrow IT Asset Disposition Trends Report, we suggest you obtain a copy, click here.    To discuss the implications of this report on your company or business, feel free to schedule a free 30-minute strategy session with us today.

The Impact of IoT on Enterprise Service Management – Part II

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As follow-up to last week’s blog post, I wanted to share some more answers to Frequently Asked Questions (FAQs) about the impact on IoT on Enterprise Service Management (ESM):

  1. What new skills sets are required to support an IoT environment?   IoT generates an extensive amount of real time data, some of which of is unstructured. In order to make use of this data in any meaningful way, a service provider will need to employ “data scientists”. These are individuals skilled at analyzing and interpreting data through predictive analytics.
  2. What impact will IoT have on Call Center personnel? The always on nature of IoT and its ability to send automatic alerts to the service organization will reduce the demand for personnel that handle basic call handling and dispatching procedures. However, there will be a greater need for remote support personnel with the ability to monitor service events in real-time, apply predictive analytics, and initiate corrective action.
  3. What will be the role for Field Service Engineers (FSE)? IoT has the ability to improve the percentage of service events that are resolved remotely without dispatching a FSE.   This does not necessarily equate to a diminished role for FSEs. In fact, the need for FSEs will increase. First, FSEs will be required to deploy IoT solutions. Second, FSEs will be needed to provide onsite diagnostics and troubleshooting when remote resolutions prove ineffective. Third, FSEs will function in the role of onsite consultant in helping the customer obtain maximum benefit from the technology operating at their site.
  4. How will IoT impact the Supply Chain?  Most people agree that IoT will enable Supply Chain personnel to proactively ship a replacement part or consumable to the end-customer before the customer is even aware of their need. The reverse logistics supply chain will also benefit from IoT in the sense that it will gain better visibility into events occurring at the field level that impact demand on return center and depot repair operations.

I know that these answers barely scratch the surface of the questions people have about the impact of IoT on Enterprise Service Management (ESM).  In the weeks and months ahead, I will continue to share my insights on IoT and ESM.  As always, I am interested in other people’s perspectives on this subject.  Please feel free to post any comments, thoughts, or fun facts that could help advance the body of knowledge around this subject.

The building blocks to Servitization

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The “Servitization” of Manufacturing is taking the High-Tech Industry by storm!  By definition, Servitization is a transformation from selling products to delivering services.  It typically involves two components:

  1. The idea of a product-service system – an integrated product and service offering that delivers value in use.
  2. A “Servitized” organization which designs, builds and delivers an integrated product and service offering that delivers value in use

In more practical terms Servitization turns the product–service offering into a “utility” that the customer pays for on a subscription basis.   Under this model, the customer pays a monthly or annual fee equal to the amortized cost of the equipment plus the value of services provided for a specified period of time.

The concept of Servitization is nothing new. As early as the 1950’s, manufacturers provided their customers with the option to lease equipment with services attached to the lease agreement.  In the late 1990s and early 2000s, companies like ABB and GE begin to offer tperformance based service contracts to their customers.

Servitization is more than just a pricing strategy.  It is an overall business model that attempts to maximize and monetize value in use to the end-customer. This requires a manufacturer to proactively identify all the services that an end-customer may require over the lifecycle of equipment operation, understand the value that the customer assigns to these services, build this value into the subscription pricing model, and then deliver on that promise.

The trend toward Servitization has picked up steam in recent years for a number of reasons. First, market participants (i.e., OEMs and End-customers) have a greater appreciation of the strategic value of service to their overall business models.  Second, manufacturers recognize that service can generate more revenue over the lifecycle of the equipment than the actual purchase price of the equipment itself.  Third, the Great Recession forced many manufacturers to rethink the economics associated with how their customers justify the acquisition of new equipment.  Fourth, service tools and technology are now available that facilitates the design and operation of an integrated product-service system in a cost effective and real-time basis.

Ultimately, it’s the technology that is having the greatest impact on advancing Servitization business models.  There are some basic building blocks that any company will need to implement in order to deliver on the promise of Servitization. First, they’ll need a state-of-the-art service management system. It needs to perform the basic activities involved in managing a service organization (e.g., dispatch, scheduling, parts management, etc.). Second, they’ll need to have a way to connect with and monitor the condition of equipment within their serviceable installed base.  They will also need to integrate this information into to their back-end service management system. The third step is a mobility solution to communicate with people in the field. Finally, analytics are needed to evaluate what’s happening. Most companies will probably benefit by using a big data solution, as well, so they can look at unstructured data from their installed base and the customer’s environment at large, and start to analyze, predict and forecast.

In summary, Servitization is a transformational process that requires manufacturers to rethink all aspects of their business from marketing and sales, to pricing and financial management, to service delivery infrastructure.  The benefits of Servitization are great including the ability to build a multiyear annuity stream, gain account control, and create deeper and longer lasting relationships with customers.

I’d love to get your thoughts on Servitization.  Let me know if your company is pursuing Servitization.  What benefits do you expect to achieve? What obstacles remain in the way to realizing these benefits?   Last but not least, if feel free to schedule a strategy session with me if you want to discuss how Servitization could impact your business.