Magazine Article | September 25, 2012

How Service Lifecycle Management Pulls It All Together

Source: Field Technologies Magazine

By Brian Albright, Field Technologies magazine

SLM provides a holistic approach to service management, touching every aspect of customer service.

As service operations have become more complex, and more important to the enterprise bottom line, field service automation systems have evolved into more complex offerings — service lifecycle management (SLM) solutions. “Historically, companies have focused on operational efficiencies and viewed service functions separately,” says Kevin Wrenn, divisional general manager, SLM segment, at PTC. “Today, more companies are looking at their service functions as a whole and addressing their broader business challenges around reducing cost and increasing profitability, revenue, and customer value. Strategic companies are moving away from using ad hoc or in-house-built solutions that cannot scale or support the role service plays in meeting these business goals.”

SLM is bigger than just field service. “Service organizations desire to know the total capabilities and costs of their service operations,” says Dave Duncan, VP of product portfolio management at Servigistics. “What margin can I achieve if I promise these assets to be 97% available with these mission profiles and with these downtime penalties? Where can I make further service improvements to availability, costs, and margins? To answer questions like these requires the field operation’s integration with dealer and depot level functions, with coordination back into R&D to get better, faster.”

Companies also seek ways to manage information captured in their SLM solutions to drive ongoing improvements and more quickly adapt to the dynamic needs of their customers. That means finding better ways to monitor KPIs (key performance indicators) in real time and making those performance measurements available to larger groups of people within the organization.

What Is An SLM Solution?
Different vendors promote different types of systems as “SLM,” although not all of them do the same things. Traditional ERP (enterprise resource planning) and CRM solutions, even those with service-oriented modules, do not fit the bill, however. “ERP systems have been built from a product’s manufacturing perspective, and CRM systems have been built from a sales force automation perspective, and often these solutions just add on services functionality,” says Jerry Edinger, president and CEO of Customer Service Delivery Platform (CSDP). “Managing the service lifecycle is inherently different from managing products or sales.”

Simply augmenting an ERP system with point solutions also won’t deliver the same value as an integrated SLM system, since companies taking this approach may wind up with disparate dispatching, warranty, knowledge management, inventory, pricing, and other solutions. “A sounder strategy is to assess the SLM ecosystem as a complementary function of ERP,” Duncan says. “ERP can communicate to SLM with relative simplicity, and SLM components can then interconnect in many necessary ways.”

According to Deb Geiger, VP of marketing at Astea International, SLM supports the complete service lifecycle “from lead generation and project quotation, to service and billing, through asset retirement. From the initial customer call to the closing of work orders, customer invoicing, and product replacement, every step in the service lifecycle process represents an opportunity for improving customer satisfaction, reducing costs, and increasing revenues.”

The SLM process encompasses the contact center, contract management, entitlement management, field service operations, depot repair, logistics, professional services, and even sales and marketing. Service companies are also emphasizing service-specific analytics that are integrated directly into the various service applications.

With access to these analytics, a company can understand how service is performing against a service plan and how a product is performing against warranty entitlements. Wrenn says, “Analytics capabilities can be a game changer for a company in that they enable problems to be detected and corrected more quickly.”

Increasingly, companies want to see customer satisfaction data integrated into SLM systems as well. “Customer feedback data needs to be directly tied to the operations side of the business and not just in the back office,” Edinger says. “By tying this data to operations, immediate process changes can be made to improve performance of the business process and delight customers.”

SLM Boosts Revenue Potential
The benefits of SLM mirror many of the traditional field service automation benefits: improved scheduling, improved service parts management, improved first-time fix rates, more accurate schedules, streamlined billing, and improved upsell/cross-sell opportunities. Where SLM takes service to the next level is by using information gathered in the field to improve higher-level operations like warranty management, parts planning, resource planning, reverse logistics, and pricing. The upshot: improved revenue and more profitable service contracts.

“When you have a true integrated SLM solution, especially in the area of warranty entitlement/service contract entitlement, revenue will increase as visibility into contracts, warranties, and entitlements is increased, so you get paid for what you actually deliver,” Edinger says. “Customer satisfaction is improved when SLM solutions provide a complete view of the customer and service details and offer the ability to deliver proactive service and to respond quickly to environmental changes and customer feedback.”

With a greater store of knowledge about the service operation and actual customer activity, companies can retool their service offerings in ways that both increase utility to the customer and maximize revenue. “To increase revenue, the focus is on being able to differentiate the company’s service offerings based on the customer or dealer conditions,” Wrenn says. “They want to know the current state of a service contract, whether there are upgrades or premium service offerings available, for example, and how to capture a higher percentage of the total service parts revenue throughout the service lifecycle, and how to renew a warranty at a higher rate. Once a company can capture and analyze service performance using SLM technology, there is an immediate ability to capitalize on revenue opportunities.”

While SLM solutions can be large and complex, companies just beginning to develop an SLM strategy should consider it as an end state, have a multiyear strategy in place that can be realized in phases. “An end-to-end SLM solution does not have to be implemented all at one time,” Geiger says. “Many organizations start with key business areas and then look to expand over time. It does not have to be an all-ornothing option. Once an organization has the right SLM platform in place, it can gradually bring other areas of its organization onto the platform according to its own schedule and budgets. An SLM solution must also be able to grow with the organization by providing additional modular solutions, as needed, to support that growth.”

Tying SLM To PLM
Another consideration is the relationship between SLM and product lifecycle management (PLM), at least for companies that manufacture goods in addition to servicing them. PLM solutions can feed data to SLM and vice versa. Detailed product specifications from PLM systems can be made available to field technicians, and product issues uncovered by those technicians can in turn help the engineering team make design improvements. “SLM provides product performance feedback to PLM because it enables the ability to understand product structures in the context of service,” says Wrenn of PTC, who recently purchased Servigistics to help enable exactly that type of integration.

With this type of feedback loop in place connecting the design, manufacturing, and service organizations, important product data can be shared with external customers, suppliers, and other stakeholders. “This will save both the customers and the service providers time and money by having access to the updated product documentation,” Edinger says. “It will also improve customer satisfaction and reduce repair time and warranty repair costs.”

To be effective, SLM must be embraced across an organization, Geiger adds. “While SLM is software, it is a tool to enable business resources to perform their roles better, faster, and on a more informed basis,” she says. “Because of this, companies implementing SLM solutions need to ensure that the right business resources are available throughout the implementation process.”

By having the information generated by SLM solutions readily available and not just looking at specific outcomes (like mean-time to repair or cost reductions), companies can find ways to identify the root causes of their service problems and develop process improvements, as well as enlighten other areas of the organization. “Through increased visibility, companies can gain better control, find bottlenecks, and make better management decisions,” Geiger adds. “They can switch to proactive management through alerts and real-time information, as opposed to reactive management. Better management results in higher revenue and reduced costs, improving profitability from both income and expense directions.”