Practical Advice For Digital Transformation In Field Service
By Michael Blumberg, President, Blumberg Advisory Group
Digital transformation (DX) is the profound transformation that occurs when companies leverage digital technologies to change the very way business is conducted, resulting in new business models and cultures. It results in more responsive business operations and leads to innovations that transform how customers, partners, employees, and things communicate with each other. DX is a hot topic because it a very positive impact on the performance of companies that have pursued this strategy.
According to Constellation Research founder, "digital leaders in almost every industry are taking 40 percent to 70 percent of the overall market share and 23 percent to 57 percent of profits. In some markets, if there are one or two major players, they are taking up to 77 percent of the profits.” In 2017, corporations will have invested as much as $1.2 Trillion in DX. This figure will reach $2.0 Trillion by 2020 according to IDC.
There is, of course, a lot of interest in DX within the field service industry. The industry is ripe for leveraging technologies like Augmented Reality (AR), mobility, GPS, Artificial Intelligence (AI), Big Data, 3D printing, and IoT. Many of these technologies were developed with field service use cases in mind. There’s a huge opportunity for DX in many different areas within field service, from scheduling and dispatch, to spare parts management, to remote diagnostics, to even providing products as a service. There are also a lot of low hanging fruit where DX technologies like AR and IoT can be implemented almost immediately.
The biggest obstacles for field service leaders when it comes to implementing DX strategies are 1) becoming overwhelmed with respect to the many different areas within a field service organization (FSO) where DX can be implemented, 2) prioritization in terms of which DX initiatives to implement first, and lastly 3) conflict between the “grand vision” that is possible and practical solution that can be implemented today.
Field service leaders can overcome these obstacles by firstly, educating themselves on the state of the art. Secondly, defining use cases of where and how they can deploy DX strategies. Thirdly, realizing that they must satisfy two objectives how do the best serve existing customers while developing the next best solution. Fourthly, recognizing that they may need one solution for supporting the existing installed base of technology and another for supporting news products. Fifthly, understanding the economics and ROI are different based on the type of solution under consideration. Solutions for supporting and existing installed based must be practical, lower cost, easier to implement, result in quick hits, and reasonable ROI. Solutions that are embedded in new product release can be more complex, involve richer and more robust user experience, typically require a higher investment, involve more involved development & implementation, and can result in a higher ROI.
In general, the ROI and benefits of DX are huge. It benefits almost every aspect of field service delivery. For example, many FSOs are utilizing technologies like IoT and AR to anticipate and resolve issues remotely, improve equipment uptime, reduce mean time to repair, accelerate remote resolution times, reduce travel time and costs, and eliminate language barriers between customers and technicians. From the customers’ perspective, DX creates an Uber-like service experience providing them with real-time, on-demand resolution to their service issues. For service providers, it facilitates the creation of new streams of revenue and lower cost of service delivery resulting in improved profit margins.
The best way for field service leaders to push the adoption of DX is to get other stakeholders in their organization excited about it. They can do this by benchmarking competitors, talking to customers about it, and understanding how it impacts KPIs. In addition, they must build use cases and bend willing to take incremental steps to reaching the goal. FSOs don’t have to create then next Uber overnight. They can leverage investments in existing technologies and search for quick wins by investing in low cost solutions that can be implemented rapidly. Most importantly, they must have a plan that deals with how the enterprise serves the current installed base existing as new product introductions.