The Secret to Selling More Service Contracts

This article first appeared in Field Service News on May 28, 2018

Field service executives often face challenges when it comes to generating additional service revenue for their companies.

They often face resistance from customers as evidenced by low contract attachment rates. The natural tendency is to blame the price as the reasons why customers aren’t purchasing more services contracts.

After all, this is the feedback they received from their sales teams and from the customers.

Being logical and rational business people, field service executives try to solve the problem by lowering the price, after all, if the customer says that the price is too high, it must be the reason why they are not buying, right?

To quote, the popular song by George and Ira Gershwin, “It ain’t necessarily so!”. While price may be a factor in the purchase decision, seldom is price the only reason why customers don’t purchase service contracts.

In market research studies that I have conducted for clients in a wide array of technology service markets, I have found that price is often low on the list of criteria that end-users consider when selecting and evaluating service providers. Criteria such as quality of service, knowledge and skill of service personnel, breadth of service offering, and vendor’s knowledge of their business are perceived by customers to have higher importance than price alone.

The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract.

This is because they have no way of logically defending the value of the service being purchased. Stated another way; they are not able to differentiate the benefits of service contracts from time and materials service. The problem is that Field Service Organizations (FSOs) often attempt to sell service contracts without providing justification about why a service contract is better than simply paying for service on a time and materials basis.

A common saying among sales professionals is that customers buy emotionally and then defend their purchases logically. All too often, FSOs provide little emotional reason why a customer should purchase as service contract as opposed to T & M and even less logical supporting evidence about why a service contract is more valuable.

To achieve high attachment rates, FSOs must be able to articulate the value of their service offerings to customers as well as to their own salespeople. The value proposition must impact customers’ emotionally by addressing their fears, worries, doubts, and concerns about the impact of service or the lack thereof on their operations.

For example, fear of excessive equipment downtime, lost revenue, low machine utilization levels, or the possibility of quality defects. Of course, the FSO needs to provide logical supporting evidence why their service offering will eliminate these issues.

FSOs achieve this results by articulating, either through a sales conversation or marketing collateral, what’s included in a service contract that is not included in time & materials. This requires they do an effective job in defining the coverage, entitlements and resources available to the customer through a service contract.

They must be able to answer the customer primary question “What’s in it for me?”. If the only difference between a service contract and time & materials is that the customer can prepay for service, then there is no emotional value or logical contrast. However, if the service contract provides a preferred level of service (e.g., 4-hour response time, 99.9% uptime guarantee, 7 by 24-hour coverage, parts, etc.) or preferred price structure then the customer is presented with some real value and contrast.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They do this by offering more value in a service contract than the customer could possibly receive through time and materials services.

Fundamentally, FSOs can deliver better service to customers under contract.

This is because the contacts provide data about the installed base and service demand requirements. As a result, FSOS can anticipate service events and be more effective at planning and allocating service resources. This, in turn, makes it possible for FSOs to provide a guaranteed level of service to their customers.

Honesty is always the best policy especially when it is supported by a guarantee and exceptional service!

Do you have any comments or questions?  Let us know by posting below !!

Is Now The Right Time To Replace Your Field Service Management Software?

 This article first appeared in August 20, 2018 online issue of Field Technologies Online 

The market for field service management (FSM) software market is large and growing. In 2017, the market for cloud- based applications was valued at $1.2 billion by Blumberg Advisory Group, and we anticipate that the market will experience a five-year compound annual growth of 22.8 percent. In other words, it will more than double by 2022.  

Given the size and growth of this market, it is no wonder that dozens of software vendors are vying for share. Each vendor claims that their software will help field service organizations (FSOs) transform operations, keep up with industry trends, adhere to best practices, increase profits, and maximize customer satisfaction.

These claims are prompting many field service leaders to evaluate if now might be the right time to replace their existing FSM solution.  Being rational business managers, field service leaders need logical reasons to upgrade or replace their software. Of course, there are many reasons but some are good and some are not so very good. With more than three decades of experience with this topic, let me share with you five good reasons why NOW might be the right time to make a change:

  1. Your current system is costly to operate and maintain. Lets’ face it, if you are spending too much to operate and maintain your existing system, then it is probably time to replace it. Typically, companies that operate antiquated, disjointed, and/or fragmented systems experience higher IT operating expenses than those who do not. I worked with one client whose IT operating expense were 12 percent of revenue (while best in class is 4 percent). The cost savings alone was enough to justify the purchase of a new system.  
     
  2. Your existing FSM software is hindering growth. Depending on its feature functionality, your FSM software can either facilitate or limit your company’s growth. A few years ago, I helped a client expand into a new service business. Unfortunately, their existing systems did not have the required functionality to manage the transactions and workflow of this new business. As a result, my client had to postpone the launch of the new business until they could replace their system.
     
  3. You can’t get good data from your current software. This is one of the most frequently cited reasons for replacing software. If you can’t obtain good data on your installed base, equipment service histories, field service engineer skill sets, cost of service, failure rates, etc., then your company is at a disadvantage because it lacks the business intelligence to effectively plan and manage resources. 
     
  4. Your current solution is impacting KPIs. Ultimately, the success of your FSO’s ability to meet financial targets and keep customers happy depends on its ability to manage service processes against KPIs. For example, first-time fix, SLA/response time compliance, MTTR (mean time to repair), etc. If your company’s performance trails significantly from industry average or best in class, then it is possible your FSM is to blame. Perhaps its time to consider replacing your current system with one that does a better job and drives performance gains?
     
  5. Your current solution lacks flexibility and scalability. It is important that your FSM software can scale up or down without a massive investment in capital or labor. In addition, it should offer flexibility in terms of how workers can share and access data as well as flexibility or openness in terms of the ability to add on third party applications.     

There will always be software vendors who offer new and innovative applications to the field service market. The desire to keep up with industry trends and best practices will also drive purchasing decisions. Implementing a new solution can be costly and time consuming, even if the ROI exists. Therefore, the decision to switch should not be made lightly. You can use these five reasons to provide an objective framework for decision making.  

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.

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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What Makes Successful Digital Transformation? – Podcast

Field Service — FMS

Michael Blumberg (President & CEO of Blumberg Advisory Group) sat down with Todd Stewart of In the Know to discuss why digital transformation is one of the hottest topics within the field service space. 

Digital Transformation occurs when an organization leverages the use of  advanced technology to change the way they conducting business. By doing so, these companies can run a  more responsive business operation and gain greater market share.

This is especially true in the Field Service Industry. One example of this positive impact is the use of Internet of Things (IoT) to remotely monitor equipment performance. By continuously monitoring sensors related to a particular piece of machinery, a Field Service Organization(FSO) can predict when service is needed or know as soon as there is a failure. At that point, the FSO can contact the customer to provide information to fix the problem, analyze what personnel or parts need to be sent onsite to resolve the issue, or provide information to the customer to avoid the impending problem all together.

Learn more about Digital Transformation by listening to this podcast.

 

 

Sales and The Field Service Engineer

Questions from Kris Oldland, Publisher of Field Service News

The following is a compilation of a 4 part series from Field Service News called ‘The Big Discussion’ All four questions with the answers from Michael Blumberg appear here to give you a clear picture on his views of the role of Field Service Engineers in sales to existing customers.

“In the Big Discussion we will take one topic, bring together three leading experts on that topic and put four key questions to them to help us better understand its potential impact on the field service sector…”

It is often said service technicians are the greatest salesmen – what are your views on this?

Service technicians bring a perspective and outlook that makes them great at sales in certain situations. For example, where the sale solves a critical problem for the customer.

Basically, customers appreciate the fact that service technicians are problem solvers and place the customer’s need first. As a result, the service technician has trust and credibility with the customer.

In turn, the customer is highly likely to act on the service technician’s recommendations. Sometimes, the only way a technician can solve the customer’s problem is by having them buy something new like a spare part, new piece of equipment, or value-added service offering.

In these situations, the sale is not viewed as a sale at all by the customer but merely as an attempt by the technician to solve the customer’s problem

Is there a difference between selling service and selling products?

Yes, there is an enormous difference.

Selling products requires the salesperson to focus on the form, fit, and function of the product and how it meets the customer’s needs. Selling products is about selling the tangible.

Selling services requires the salesperson to focus on how the service can help the customer solve a problem, improve their situation, or achieve a better outcome.

More importantly, it is about selling the intangible.

Is incentivising service technicians to “sell” opening up new revenue streams or putting their “trusted advisor” status at risk?

Technicians represent a ready and available channel for generating incremental service revenues.

After all, they are at the customer site almost every day.

However, service technicians may become over-zealous or pushy about selling, and jeopardize their “trusted advice” status, if they lack proper sales training or if their performance measurement system and company culture are too focused on sales.

What impact does the rising uptake in outcome based services have on the relationship between service and sales?

Selling outcome based services requires greater collaboration and communication between service and sales than ever before. Service needs to understand and support the solution that the sales force crafts for the customer.

The sales force needs to have a clear understanding of the capabilities of the service team to craft the right solution.

Basically, service and sales must work as a team. In addition, the service organization must be proficient at sales so they can add-on additional services to better meet outcomes as these opportunities present themselves.

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Digital Transformation Trend: Changing “Business as Usual”

The following is an excerpt from an article we wrote for XM Reality.  You can get a copy of the full article here http://resources.xmreality.com/blumberg-new-reality/

customer service

Perhaps the trend that is having the greatest influence on the adoption of AR/VR/MR platforms is not the affordability or stability of the technology but the commitment by today’s leading corporations to embrace Digital Transformation (DX). Rather than utilizing technologies simply to streamline and automate existing business processes and transactions, digital transformation means utilizing technological innovation such AR/VR/MR to change the very way business is conducted, resulting in new business models and cultures.

DX has had an overwhelmingly positive impact on the performance of companies that have pursued this strategy. In fact, in some instances it has resulted in a winner take all scenario. According to Constellation Research Founder and Principal Analyst Ray Wang, “digital leaders in almost every industry are taking 40% to 70% of the overall market share and 23% to 57% of profits. In some markets, if there are one or two major players, they are taking up to 77% of the profits”.

These findings suggest that DX could lead to a “zero-sum” game for selected field service providers. Therefore, it should come as no surprise that businesses across a wide range of industry segments are investing heavily in DX technologies. Indeed, worldwide spending on DX is estimated to approach $1.2 trillion by 2017 year-end, according to International Data Corporation, an increase of 17.8% over 2016. IDC predicts this market will continue to grow at a steady rate of 17.9% over the next three years, reaching $2.0 trillion by 2020.

Most business experts and industry pundits agree that DX investments have the greatest impact on a company’s performance when they achieve two major objectives. First, they make business operations more responsive by leveraging digitally connected product-service offerings, people, and assets. Second, they lead to innovations that transform how customers, partners, employees, and things communicate with each other. For field service organizations, the outcome of meeting these objectives incudes a more enabled workforce, enhanced customer experience, and improved overall collaboration and performance.

Clearly, AR/VR/MR technology is well suited to meet these objectives and deliver outcomes. At a macro level, it changes the way field service business is conducted, by bringing a problem to the expert rather than the other way around. As a result, it shortens the time it takes to resolve a customer’s issue and avoids the high costs associated with sending a technician to the customer site. In addition, it helps FSOs overcome resource constraints. For example, utilizing this technology, a technician at a customer site can simultaneously offer remote support to a second customer at another location. Furthermore, the technology facilitates greater collaboration and performance among technicians. A “top-gun” technician with deep domain knowledge and expertise can provide remote guidance to a less experienced, “novice” engineer. Technicians can also use annotations as part of AR sessions to overcome language barriers that may exist between people in different geographic regions. Lastly, AR/VR/MR provides an immersive experience to the customer, enhancing their experience and enabling them to be self-reliant when it comes to resolving basic issues.

In many ways, AR/VR/MR pushes the boundaries of possibilities when it comes to providing high quality and efficient services and support to end customers. By overcoming limitations, FSOs experience improved performance in the areas of first time fix, remote call resolution rates, mean time to repair, and cost per service call. While effective field service leaders have always been committed to continuously improving performance in these areas, AR/VR/MR provides the technology to make step-wise (e.g., exponential) improvements as opposed to only incremental gains.

AR/VR/MR brings additional value in its ability to positively influence and enhance customer satisfaction as well as generate new and profitable sources of revenue for FSOs. For example, many early FSO adopters have been able to monetize their investment in this technology by offering AR/VR/MR enabled remote support sessions as a value-added, fee-based service to customers. These examples clearly demonstrate why FSOs should give serious consideration to deploying an AR/VR/MR solution today.

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IoT’s surprising impact on revolutionizing inventory management

Sarah Hatfield directs OnProcess Technology’s strategy for products and core service offerings, including the OPTvision platform. She brings more than 15 years of leadership expertise from previous roles in supply chain, product and program management for Comcast, Asurion and ADT.

You know disruptive technologies have reached the tipping point when non-IT pros build business plans around them. This is exactly what’s happening with IoT. Because of its ability to drive wide-ranging, game-changing improvements, IoT is starting to be used across all aspects of business operations. One of the newest, and most impactful, areas is spare parts inventory management, a key aspect of the post-sale supply chain.

Maintaining the right level of spare parts is critical. As you can probably guess, carrying excessive inventory can be prohibitively expensive. But if you have too little, you’ll slow product repairs, hurt customer experience and end up spending more money purchasing new parts for stock replenishment. The problem is, traditional best practices for managing spare parts — using time-series algorithms combined with sales forecasting, seasonality, gut instincts and simple rules of thumb to determine how many parts to stock — are woefully inaccurate because:

  • They’re static, “review-and-stock” endeavors based largely on historical demand data
  • The algorithms don’t account for variables resulting from failed parts in the field

Knowing this, many companies hedge their bets by purposefully overstocking. Others think they’re maintaining the right levels, but unknowingly overstock. In either case, they’re wasting a lot of money.

New IoT-driven inventory planning

The key to accurately stocking parts is knowing which ones are likely to fail and when they’ll need to be replaced. Some businesses have attempted to use IoT data to understand product failure impacts on inventory planning. However, most of the IoT monitoring programs are designed to respond to signal failures. Plus, IoT data collection is often haphazard and emphasizes the few pieces of equipment that are starting to fail, rather than the whole. This makes it impossible to generate a sound baseline for analyzing product performance and predicting failures — which, in turn, makes it impossible to accurately forecast spare parts needs.

The good news is there’s a new inventory planning algorithm that builds IoT-based failure data directly into the equation. Developed at Massachusetts Institute of Technology Center for Transportation and Logistics, it enables businesses to accurately forecast needs. By using this methodology and analyzing historical failure data on the entire installed base, businesses can predict the exact spare parts they’re likely to need, when and in what quantity.

The better news is that it doesn’t take a huge team to capture IoT data because not much data is needed…. Read More

Are Freelancers the Future of Field Service Staffing?

This interview by Derek Korte, editor at Field Service Digital and a senior editor at Original9 Media. It first appeared at  http://fsd.servicemax.com

Field service leaders have a lot to manage on any given day. But there’s one responsibility that’s often lost while  keeping the work orders flowing and vetting the latest technologies — talent. Sure, the IoT continues to reshape the service industry, but field service is still a people business. When something breaks, customers expect a skilled professional to show up and fix the problem quickly — hopefully the first time.

But it’s a challenge to maintain a trained, knowledgable service team. Experienced techs retire and are difficult to replace, and new technologies require new skill sets. As a result, service organizations are turning to freelancers to supplement their full-time workforce, while ensuring customers get a consistent level of service. We asked Michael Blumberg, president of Blumberg Advisory Group, to explain the most surprising takeaways from his latest research into the freelance phenomenon in field service.

You found that service organizations rely on freelance platforms to improve geographic coverage? Why did that surprise you?

I was surprised to learn that organizations are using freelance management platforms (FMS) for more than just handling a temporary surge in demand, or providing coverage in remote geographic areas. A significant percentage (61 percent) use freelancer platforms to expand their geographic coverage. They are using these platforms to facilitate strategic growth, not just to cut costs or solve a tactical problem.

You also found that organizations increasingly use freelancers to respond to emergency service requests — why?

The conventional wisdom is that freelancers are best suited to handle project work, such as installations and scheduled maintenance. Our research suggests otherwise. In fact, 53 percent of the respondents indicate they utilize freelancers to handle all types of work, including projects and emergency repairs. By relying on freelancers, service managers can ensure they have the right coverage when and where they need it.

What’s unique about a FMS is the crowdsourcing element, which leads to situations where technicians are often competing for the same service request. As a result, technicians know they have to be very responsive because their income depends on it. I’m not suggesting that company-employed technicians are lazy, but sometimes there’s no incentive to take on more calls. There’s no incentive for them to respond faster or get more calls done.

How are service managers using freelance platforms to improve recruitment and onboarding?

Even when organizations use freelance techs, whether for a long-term project or on-demand emergency work, they still have to spend time recruiting, training and onboarding those technicians. The crowdsourcing element of FMS platforms means that managers can find these techs quickly, so they can spend less time recruiting. And the digital nature of these platforms means that managers can train them, share work orders and outline what’s expected. A majority (59 percent) of companies using freelance platforms are able to recruit and hire new technicians in 14 days or fewer, while only 11 percent of non-FMS users are able to achieve this goal.

How do service managers integrate these freelancers into their regular workflows and explain service expectations?

They can be very selective about which freelancers they choose to work with, and they can request technicians who have certain qualifications and skills. Managers can also describe the procedures that the techs must follow when they go out on a call, which is something companies are already doing with full-time technicians. Lastly, some managers administer short quizzes and exams that the freelancers must pass before they’re assigned work.

Your research suggests that agility is the most important factor when deciding to use a FMS. Why?

Nearly two-thirds (64 percent) of respondents indicated that their need for agility is the number one reason why their companies turned to a variable workforce. While cost savings might be the reason why these companies considered this alternative in the first place, agility is why they continue to use it. In today’s dynamic service environment, service organizations need to respond quickly to surges in demand and constantly changing technical skill set requirements. They can’t afford to spend a lot of time staffing up to meet demand because it is likely to change quickly.

And relying on freelance platforms can also improve service productivity and quality? How?

Freelancers are often more engaged with the service organizations that hire them because they see themselves as independent contractors. They’re running their own business.

Freelancers want to demonstrate that they’re responsive and effective so they will be given more jobs. There’s also a snowball effect — the more calls freelancers take, the more income they’ll have, which creates a productivity mindset.

Are there any quality and productivity tradeoffs?

Our survey results indicate that 65 percent of companies using a FMS model have experienced improvement in field service productivity. Furthermore, first-time fix rate is 18 percent higher among top-performing FSM users than the industry average, while SLA compliance is 16 percent higher.

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