COVID-19 Is Hastening The Evolution From Cost Center To Profit Center, And Timeframe For Technology Adoption
By Bill Pollock, Strategies for Growth
Every year, Strategies For GrowthSM (SFGSM) conducts a series of Benchmark Tracking Surveys among its outreach community of more than 21,000 global services professionals. Total responses for the 2020 Field Service Management (FSM) Tracking Survey Update, conducted in March 2020, are 135, and it is among this respondent base upon which the survey analysis is based.
Overall, survey respondents continue to focus on “clusters” of customer-focused, productivity and process improvement-focused, and financials-focused market factors that are driving their respective organizations to improve existing levels of field service management performance. Overall, the top drivers cited are:
- 51 percent Customer demand for quicker response time
- 38 percent Need to improve service process efficiencies
- 33 percent Customer demand for more accurate service call scheduling
- 32 percent Need to improve workforce utilization and productivity
- 26 percent Customer demand for improved asset availability
- 22 percent Internal mandate to drive increased service revenue
- 21 percent Escalating field service operations costs
- 18 percent Internal mandate to drive increased service profitability
- 17 percent Need to incorporate remote expertise capabilities
However, to effectively address these factors – and strive to attain best practices, respondents then cite the following as the most needed strategic actions to be taken:
- 51 percent Develop/improve metrics, or KPIs, to measure field service performance
- 38 percent Invest in mobile tools to support field technicians
- 30 percent Integrate new technologies into existing field service operations
- 25 percent Provide enterprise-wide access to important field-collected data
- 24 percent Automate existing manual field service processes and activities
The survey results also reveal that nearly three-quarters (73 percent) of respondent field Services Organizations (FSOs) are now operating service as an independent profit center (or as a pure, third-party service company) – up from 63 percent, only one year earlier. However, it is noted that there are still more than one-quarter (27 percent) operating as cost centers.
It is also noted, that while the percentage of services organizations currently running as profit centers reflects a major uptick from the 63 percent as reflected in SFGSM’s 2019 annual FSM survey, there is still 19 percent, or almost one-in-five, that are managing their services operations via a series of manual, rather than automated, processes. This represents a slight increase from 17 percent, as reported, just a year earlier.
Currently, just over one-quarter (27 percent) of services organizations are using Augmented Reality/Merged Reality (AR/MR) in support of their field service operations. However, this percentage could be in the 30 percent+ range, as roughly one-sixth (16 percent) cite that they do not know whether their FSO is presently using these technologies.
Whatever the current percent usage is, it is expected to grow significantly over the next five years, as virtually half (49 percent) indicate they are at least “very likely” to build AR/MR into their field service operations during that time. As such, within this five-year period, the percent of FSOs incorporating AR/MR into their services operations is expected to increase to more than 50 percent, or more than twice the existing reported level.
Similarly, just over one-quarter (28 percent) of services organizations are currently using Artificial Intelligence (AI)/Machine Learning (ML) in support of their field service operations. Again, however, this percentage could easily be in the 30 percent+ range, as nearly one-sixth (15 percent) also cite that they do not know whether their FSO is presently using these technologies.
As such, regardless of the current percent usage, use of these technologies are also expected to grow significantly over the next five years, as virtually half (49 percent) indicate they are at least “very likely” to build AI/ML into their field service operations during that time. Accordingly, the percent of FSOs incorporating AI/ML into their services operations is also expected to increase to more than 50 percent, or more than twice the existing reported level.
However, the percent use of Predictive Diagnostics/Predictive Maintenance in support of field service operations is increasing at a much faster rate, as a majority of services organizations (51 percent) are currently using these technologies. In fact, this percentage could easily be approaching the ±60 percent range, as roughly 11 percent cite that they do not know whether their FSO is presently using these technologies. Nonetheless, the current percent usage is expected to grow substantially over the next five years, as nearly two-thirds (64 percent) indicate they are at least “very likely” to build Predictive Diagnostics/Predictive Maintenance into their field service operations during that time – with a final projection within an estimated ±85 percent range.
Finally, a majority (55 percent) of services organizations are using Remote Expertise capabilities in support of their field service operations, with another 21 percent planning to do so within the next five years. As such, within this five-year period, the percent of FSOs incorporating Remote Expertise into their services operations is expected to increase to at least 76 percent, or more than three-quarters. However, by re-allocating that roughly one-in-eight who indicate they either “don’t know” or are “unsure” about their organization’s future plans, the total percent of FSOs using Remote Expertise in the next five years could also easily be as high as 85 percent.
Among those organizations that are presently planning to build Remote Expertise into their services operations, there is likely to be a fairly strong push to implement within the next 12 months (54 percent), to 24 months (77 percent). These percents, again, may also actually be somewhat higher as one-in-six respondents (16 percent) are uncertain as to the exact time frame for implementation – plus – the COVID-19 pandemic is likely to serve as a compelling force leading to even further automation and technology adoption. In any event, these respondent-provided forecasts reflect a much faster time frame than what we are normally accustomed to seeing in surveys of this nature.
When you think about it, everything that we do in the services industry still needs to get done – especially in these turbulent times. In many ways, we are all doing the same things as we did pre-COVID-19 – although now, there is an extra measure of importance in everything we do, every step we take, and every customer we support. It’s just going to be different! And remain different!