26 Apr Field Service Expert Interview – Bill Pollock
As part of our Field Service Management Expert Interview Series, we ask industry experts for their views on the market and what the future of field service management holds. We recently talked to Bill Pollock, president and principal consulting analyst at Strategies For Growth℠, a research analyst and consulting firm. Bill has consulted to more than 300 client organizations around the globe. These engagements have involved strategic services planning, market research and customer surveys, customer satisfaction measurement and tracking, competitive market positioning and awareness, vertical market segmentation and the development of strategies for improving service performance and customer satisfaction. In the past, Bill has also served as president and chief research officer (CRO) at The Service Council, vice president and principal analyst for Aberdeen Research Group, and managing analyst for Gartner, having authored more than 200 research reports.
You’ve seen field service evolve over the years in your various roles. In what ways is field service management changing now?
I’ve seen the field service segment evolve several times over the years, from break/fix to network services to software support and such. However, the introduction of the Internet of Things, or IoT, is going to have a much greater and profound impact on the global services community than anything else that has preceded it. In fact, it already is. For years, services managers have been talking about ways to reduce a “truck roll” in order to save money and repair the customer’s equipment remotely — first by phone or assisted self-help and now via remote diagnostics and even predictive diagnostics. Truck rolls aren’t necessarily a thing of the past; however, they have greatly diminished in frequency as a result of the integration of IoT data and devices into field service management systems.
Improvements in business analytics have also assisted field service managers in their ability to manage their entire business operations — and not just the field service aspects of the business. There are more analytical tools available now than ever before and most managers are actively engaging their dashboards so they can intelligently manage their field service operations. Through the use of augmented reality (AR) apps, now actively being combined with virtual reality (VR) to form a more complex and robust “mixed reality” (MR) capability, we are likely to see even more advances in the types of technology that will ultimately reduce the cost of performing service — for both on-site and remote repairs — over time.
With technology visionaries like Elon Musk, who started out with his Tesla business then branched into solar panels and SpaceX, we are likely to see more technological advances coming down the pike. For example, Musk’s new venture, Neuralink, has set its goals on attaining the ability to “merge” the power of the human brain with the power of IoT in order to upload and download “human thoughts” onto chips and vice versa. Imagine the impact that new ventures like this will have on all aspects of business. All of a sudden, veteran field services technicians will become just as important as the influx of computer-savvy millennials with respect to their experiential value to the field service organization (FSO). The process goes on and on, and field service management will continue to evolve over time.
What broader role do you see the Internet of Things playing in field service management?
The Internet of Things is becoming an integral component of any FSO’s desire to be able to improve its services processes, streamline its services processes, collect and share business analytic data, and serve the customer better. It’s already here. FSOs will be greatly behind the technology curve if they do not have existing IoT-powered FSM capabilities – or at least a primary FSM solution provider that does. IoT is quickly becoming the chief differentiator that divides those FSOs that can meet the challenges of the present, let alone the future, from those that cannot.
Without IoT, there can be no predictive diagnostics; there could be no AR, VR or MR; and there could be no chance of being able to compete directly against those FSOs that do have these capabilities. Just as cloud-based FSM solutions normalized the playing field across all services industry segments, IoT is now doing the same – only to a much greater degree. In the past, falling behind the technological curve still gave the FSO an opportunity to catch up in another year or so. However, there is not that much time available for catching up. Falling behind for just a few months may represent too much of a gap to make up. IoT allows all FSOs to keep pace with the market leaders, regardless of their size, reach or reputation.
What are the strategic opportunities you’re seeing for field service organizations?
The greatest strategic opportunities for FSOs will be to gain additional efficiencies as they use IoT to power their field service operations. Of course, the converse is equally true, in that those FSOs that do not step up to the challenge will ultimately find themselves falling further and further behind the technology curve, their customers’ expectations for quality of service delivery, and their ability to compete head-to-head against not only the market leaders, but any small, medium or enterprise size services organization that has already embraced the new technologies. However, regardless of the organization’s size, vertical industry segment or geographic coverage, there are ample opportunities for all services organizations to take advantage of IoT and cloud-based FSM solutions to take their operations to the next level.
From our most recent Field Service Management Benchmark Survey Update, conducted in December ’16/January ’17, we find that the top two drivers influencing the global services community are customer demand for quicker response time, and the need to improve workforce utilization and productivity. The question arises, then, “How can the services organization adequately address these two key issues without the strategic advantage of an IoT-powered FSM solution?” The answer, of course, is “It can’t!”
Other strategic opportunities can also come through strategic partnering with complementary technology solution providers. PTC is doing this with ServiceMax and their respective relationships with GE Digital (ServiceMax’s parent company). And many smaller FSOs are involved in supporting partnerships with either Microsoft, for its CRM capabilities, and/or Salesforce, for its sales and marketing management tools, etc. Customers want what they want, and in most cases, they don’t care whether their primary FSM solution vendor is offering its services directly or indirectly through strategic partnerships. In fact, many customers like the fact that their FSM vendor is linked in some way to GE Digital, Microsoft, Salesforce or other industry giants.
What features in field service platforms are critical now and what will be necessary for the future?
For many FSOs, a standard scheduling functionality is simply not doing the job anymore and many have set their sights on solution providers that can offer optimized scheduling. The same applies to standard business analytics versus advanced analytics, as well as for the various components of spare parts and inventory management. In fact, what used to be passable in the past now looks a little bit dusty and, as such, some FSOs have elected to move forward with more robust functionalities made possible through the integration of the IoT into their FSM systems.
Nowadays, legacy platforms may not be able to accommodate such new technology apps as AR, VR and MR, and, as a result, newer platforms need to be implemented to power these new capabilities. The same goes for implementing predictive diagnostics and remote diagnostics capabilities for most FSOs. Mobility is also important, particularly with respect to real-time data collection, sharing and transmission to relevant parties within the organization. Can the organization’s existing platform handle all of these new technologies? Probably not. Therefore, newer platforms will need to be implemented, and they will need to be state-of-the-art.
How are mobile technologies changing the way field service organizations interact with and serve customers?
Mobile technologies are of critical importance to FSOs. Without a full complement of mobility, it would be as if you’ve got all this technology “hidden” in your office, but you can’t share the benefits with your field force or customers. This is particularly true with respect to customer engagement activities and business analytics. For example, competitors may already have the capability to generate customer contracts, invoices and other types of paperwork right at the customer site. They can obtain a customer’s signature immediately and, by doing so, eliminate much of the “float” that has been historically associated with paper-based forms management and snail mail.
Mobile technologies can also make an FSO’s business analytics capabilities much more vibrant. What good does it do to collect real-time data if you can’t share it in real time? In other words, a full-bodied mobility platform can improve any FSOs velocity of service by shaving off days, if not weeks, of delays and potential paper-based mistakes. Having the IoT generate data in real time, but not getting relevant data and information out to the field in real time, is a big mistake. The combination of IoT and mobility can help FSOs avoid this opportunity cost.
How are you seeing field service organizations use mobile technologies to drive revenue and maintain a competitive advantage?
The float issue is only one small component of how mobile technologies can assist in driving revenue and maintaining a competitive advantage. There are many others as well. However, it’s important to note that if all you’re doing is automating bad processes then you’ll only be doing all of the wrong things faster – not better. That’s why it’s so important to use the tools of a cloud-based FSM solution, powered by IoT, to improve your processes first; empower your field techs with real-time data, information and analytics; empower your customers through customer portals and self-help platforms; and generally perform all of your services activities better. Then you can see additional benefits by doing it all faster – that is, through the functionalities of IoT.
By doing so, customers will recognize the improvements you have made and, therefore, will be more reliant on the organization for future services needs and requirements, upsells and cross-sells. This will have the combined impact of reducing the cost of customer acquisition while simultaneously increasing the existing revenue stream. Then, increases in customer satisfaction metrics can be used to promote the organization’s competitive advantage, which can also benefit from the fruits of social media coverage and word of mouth. But, it all starts with making improvements to the processes.
How can field service organizations better capitalize on sales opportunities?
One area where many services organizations do not do a good enough job is in the area of contract and warranty management. It’s so simple, but it’s not sexy or glitzy enough. However, by using an FSM solution that has a contract management and warranty management capability built into it, or by finding a reputable warranty management solution provider, an FSO can focus directly on contract attachments, contract renewals and contract management, all of which can contribute to generating not only an increased revenue stream, but one that is also more predictable.
The increased use of business and customer analytics can also provide the organization with increased insight into which customers may require an expanded services agreement based on anything from surpassing their throughput limits for existing equipment, repetitive failures for the same problems, or to make adjustments for an expansion of the business, a recent acquisition or merger, or the increase in the number of daily shifts using the equipment. This is something that the organization’s field techs can recognize either through the customer analytics they have access to or simply by being at the customer site on a recurring basis. Many FSOs also do not have the expertise for upselling and/or cross-selling their existing customers. This is a critical component for any business, not just for field services. If you do not already have these capabilities, you may need a new, highly-trained salesperson or a process for ensuring that no sales opportunity goes unrecognized.
How is the broader economy affecting field service management?
The broader economy affects businesses of all types, including field services. However, field services has one thing going for it that many other industry segments don’t, particularly manufacturing and product sales. That is, while not entirely recession-proof, businesses will always need their systems, equipment and devices to be up and running for the duration — in many cases, in spite of what it may cost to do so.
Even at reduced capacity, factories will need their production lines to continue to operate, hospitals will need their medical devices to be readily available, banks will need their transaction-related systems to run continuously, and so on. However, B2C-focused services organizations may feel the full brunt of any economic downturn, as a majority of consumers may opt to wait until they can afford to have their home electronics serviced until they can better afford to pay for those services.
A broadly robust economy can stimulate increased product sales, which in turn, can stimulate increased services opportunities. Conversely, a poor economy can dampen everything, including the field services segment. However, the sign of a truly progressive services organization is one that has already taken into account the effects of a weakened economy and planned on how to best deal with a temporarily reduced workforce through the use of a freelance management system, temporarily diminished service call activity or the like. If these types of economic-influenced events occur, those FSOs that have already taken measures to address these temporary downturns can more effectively roll with the punches.
How is the role of Chief Service Officer evolving?
The role of the chief service officer (CSO) has evolved significantly over the past several years.The days of simply managing a staff of dispatchers, field technicians and administrative assistants are long over. In many cases, today’s CSO must also be a chief data officer willing and able to manage the data and business analytics that drive the operations of the services business. He or she must also be a chief customer officer, once again willing and able to interface with the customer directly when customer problems need to be escalated. As you can imagine, the role of the CSO can also be expanded to be the chief operations officer or chief business development officer. Regardless of how the role’s trajectory, all CSOs must be accomplished and experienced in a much larger variety of customer-facing, analytics, business development, sales, marketing and social media functions.
What are the top three KPIs that you recommend FSM organizations focus on? How might those KPIs change five years from now?
The rule of thumb is that you should be measuring all of the metrics that focus on areas where you are underperforming or have recognized (or suspected) problems in service delivery. For example, if your customer satisfaction ratings are lower than desired, then you will need to measure and track customer satisfaction ratings. If your on-site response time is deficient, then you will need to measure things such as on-site response, providing an ETA, etc. There are several KPIs that a majority of FSOs measure, based on the results of our 2017 Field Service Management Benchmark Survey. For example, the top KPIs currently being measured by a majority of FSOs are:
- (62%) Total service revenue
- (61%) Total service cost
- (53%) Field technician utilization
- (50%) On-site response time
- (49%) First-time fix rate
It should be noted that a majority of best practice FSOs (i.e., those that are attaining both 90%+ CSAT and 30%+ services profitability) typically measure twice as many KPIs as the average FSOs.
Five years from now – actually, even sooner – there will also be an entirely new way of collecting data and reporting KPIs as a result of remote diagnostics, AR, and the growing influence of IoT. It will be analogous to keeping two sets of books. That is one set of KPIs like mean time to repair (MTTR), elapsed time from problem identification to correction, for the way service has historically been performed (i.e., having a field tech dispatched on site) versus the “new” way via remote diagnostics and repair. Combining the two will not make sense and will need to be measured, monitored and tracked separately.
To learn more about Bill and his work, visit Strategies for Growth. You can also follow him on LinkedIn.