By Alastair Clifford-Jones, CEO, Leadent
The holy grail for field service managers has been to reduce costs while maintaining customer service levels; effectively meeting SLAs at the lowest possible cost. This is still important, but the focus is changing. Field service is moving into a space of key importance, driving strategy rather than being a recipient of it.
All markets are now impacted by this change. Looking at the consumer market there is so much information for consumers; independent websites that not only compare products but also services, and these naturally impact buyer decisions.
It’s now easy in the UK, with the deregulations of the utilities market, for consumers to switch suppliers. Research has shown that many customers won’t switch until they have had a bad service experience. On the other hand, customers will switch if the price differential is greater than 20 percent.
The cost of bad service really impacts an organisation’s profits. In a recent HBR report, a 5 percent increase in customer retention results in a 25 percent to 95 percent increase in profits. This becomes more important to the service organization as products become less differentiated on functionality.
In light of new technology, and the change in consumer behaviour, we have developed a maturity model which not only measures where organizations are positioned currently, but what they should aim for. This model demonstrates the key characteristics an organization needs to be successful in today’s field service landscape. While it’s an organizational model, technology and processes still need to be implemented, and cultural change cannot be under estimated. There are three phases of the maturity model: chaotic survival, supply-led, and demand-led.
This is the embryonic phase. Everything is reactionary, heroes in the business are the people that get things done. Someone that fixes a water leak at three in the morning gets the company award. All the processes are disparate, and much of the knowledge about how to do things is in people’s heads.
The level of ‘chaotic survival’ can often be measured by the noise in the dispatch office and the number of calls made to the field and customers.
Initially the workforce is seen as a cost, and any case for change is usually based on a cost reduction program by streamlining processes and the introduction of scheduling, albeit a manual tool.
While many companies have moved beyond this stage, it is surprising how many organizations have not. Moving out of this phase is probably the most challenging in terms of people. Field teams need to be managed and dispatchers need to allow technology to make decisions. The world is littered with organizations that have failed to develop — that have implemented a technology solution but not the new processes, organization, and skills required to make this step.
This phase starts building the ground work for excellence. The technology both in scheduling and mobility starts to connect the organization together. Silos, which were in the previous phase, are dismantled and the organization becomes more collaborative. From a business perspective, this is when customer service and field operations often become part of the same entity.
Rather than responding to customer needs in a reactive fashion, the company can start to become more proactive. Planned maintenance, if applicable, gets built into the schedule. Customer service levels can be monitored and informed decisions made in terms of minimizing costs but maximizing the customer service levels.
The field force, hitherto considered as a cost, now has more flexibility and starts to drive a competitive advantage. While we see these organisations becoming more collaborative internally they are still not working with customers and suppliers in a truly collaborative manner and this is a huge missed opportunity.
This is the holy grail. This is the phase where technology and the right organization can really disrupt the industry and companies can leap frog their competitors. Field service starts to drive the agenda, drive the strategy. The organization no longer is a recipient of customer demand and fulfils needs in an optimum manner. Processes are no longer just contained within the confines of the enterprise but are built to include customers and suppliers.
By putting the customer first, they have control. They can book appointments through multiple channels and based around their preferred choice. They have full visibility of the processes, and in many cases, can actually solve the problem themselves.
The suppliers are able to understand how their products perform in the field and feed this back to the manufacturing processes.
This is the new ‘battle ground’ for field service and technology has made it possible. IoT is a reality and no longer a pipe dream of visionary consultants, and it enables organizations to truly predict failures, determine preventative maintenance schedules, and offer a level of service which exceeds customer expectations at a substantially lower cost.
This does however require a very different way of thinking and a true cultural shift. To be in this phase you need to have an organization which thinks differently, embraces technology, and one that really understands the customer.
In summary, the new world is exciting. It’s even making field service seem ‘sexy’, but most of all digital service (an often misused term) is truly disrupting the industry. It is technology driven, but the companies that will be able to exploit this will think differently. They will think about the end to end processes from manufacturing and the whole customer journey; from making the purchase decision to disposal. This means an organization must not only break down internal barriers but also external ones.
Given that each phase of maturity requires changes in culture, it would be very hard from an organization to move from being ‘adhoc’ to ‘predict and engage’ in an instant as each phase is a building block for the next. However new entrants to the market can start at the demand-led phase, and this is where organizations which don’t develop along this continuum will lose out.