Article | July 13, 2017

Surviving A Merger Or Acquisition – How To Prepare Your Field Service Operation And End Up In Control

Field Serivce M&A Survival

By David Licosati, VP of sales, Service Strategies

Global merger and acquisition (M&A) activity hit record a $4+ Trillion with a “T” in 2016 and it is continuing in 2017.  If you’ve been through it before you know how disruptive it can be to your business.  When the merger is announced you’ll hear the corporate boards speak of tax inversions, expanded market share, shareholder value and efficiency gains. Early in the process everyone is reassured that it was done for accretive purposes, that there are very high synergies and growth opportunities. They tell you there is limited overlap and that there’ll be few personal disruptions (read layoffs).  If we’ve learned anything from the past, this proves not to be true and field service is a key target.

We know we have equipment to fix and customers to keep happy so we bury our heads thinking that as long as we continue taking care of business there is no way our team can be expendable.  Invariably, within 12-18 months upper management and the board of directors look for ways to justify the M&A. They begin looking to cut the largest expense, which is labor.  They analyze options like consolidating field service operations or outsourcing.  These analysis are strictly financial and do not take customer experience or loyalty into consideration.  They don’t understand, as we inherently know, that with customer disruption or displacement of service there will be dissatisfaction, which leads to customer defections.

How to Protect Your Team

Data is your strategic weapon against the inevitable “rightsizing.” Having a proven track record and benchmark measures of success is the key to winning the battle. When the executive team looks for economies of scale (the reason they merged,) they always target Services.  Services will be analyzed for cost saving opportunities and without the strategic data to make a strong case, your team will lose out against the merged operation.  Experience has shown that the better armed you are with data, the more likely it is that your team will be the surviving entity.

Customer satisfaction and Net Promoter score are important in measuring customer perception. But those metrics along with response times, first time fix rates, resolution rates and contract attach rate, mean time to repair and average response time are table stakes that every organization monitors.  In order to be strategic and have the data to back up your performance, you need to have a proven track record of being measured against the best global performers in the service industry.  Being armed with data from benchmarks and audits from a globally respected service quality program will propel your organization to the top of the heap.  A service quality program like the Service Capability & Performance (SCP) Standards, ITIL, ISO and other industry recognized quality programs can help your organization become the darling of the merger or acquisition. These quality programs show a proven track record and commitment to efficiency and effectiveness with a  blueprint and benchmark of service excellence, supported by independent quality audits to validate performance.

About The Author

David has more than twenty years professional experience, including more than fifteen years in the high-technology industry. David comes to Service Strategies from InoStor/Tandberg Data Corp., where he was co-founder and vice president of business development. During his tenure he created an international technology licensing business and successfully launched several new products through OEMs and channel partners. Prior to that he was co-founder and executive vice president of LAND-5 Corporation, a storage area network and network attached storage solutions developer, where he helped transition the company from a niche startup to a multinational organization. David earned his BA in Business Administration from the University of San Diego.