Optimization and the Environment

Tom Paquin

A few weeks back, I wrote an article on the importance of proper parts management and reverse logistics for sustainability. In it, I made the case not just for the moral imperative that smart waste management allows, but also the economic imperative. In that same vein, I think it’s important, within field service, to discuss optimization in the same vein.

I’ve outlined optimization in excruciating detail (and sometimes with the help of Super Mario) over the last few years, so if you’re in need of a primer, they’re out there. The bottom line is: Best-in-class planning and scheduling optimization finds and fixed invisible inefficiencies for your business. We’ve used the example of Cubic previously, where PSO showed them that their instincts of leaving a single technician at a single site for the entirety of the day was actually wasting money and resources. But why, exactly, is that the case?

It comes down to what your optimization system is trying to do. Inferior systems with optimization capabilities, under many circumstances, are just shoving people into time slots in what is essentially the illusion of automation. True, full-featured optimization powered by AI is (as we have discussed before) attempting to accomplish a specific set of goals for your business. Specifically, they are using complex algorithms fed by vehicle, job, and location data to minimize:

Drive time
Time from ticket to invoice
Appointment time
Stockouts

And many more. By coordinating a list of goals (and feeding that list with good data) you’re mitigating a lot of drive time. Drive time means gas guzzling time.

Let’s put together a general estimate to what that could look like. Let’s assume your vehicles average 35 miles per gallon, and your system, by consolidating truck rolls, saves 10 miles of drive time per truck per day, which is a pretty standard expectation. Assuming you have, let’s say, 200 technicians, that’s about 57 gallons of gas a day, 286 gallons per work week, 14,857 gallons per year.

Obviously there’s a monetary component to this. Last time I filled up, I paid $2.50 per gallon or so. Assuming that you’re using regular unleaded and happen to be in the greater Boston area, that is more than $37,000 in savings annually on nothing more than gas. That ignores every other saving that good optimization offers a business.

There’s obviously a bottom-line benefit to this, but the ecological story is just as prescient, and worth publicizing. There are obviously a variety of ways that businesses can mitigate their carbon footprint, but drive time is absolutely and unequivocally a key. And yes, cynical as it might be, if your business is making decisions that eliminate waste, ecologically through reverse logistics and operationally through AI-powered scheduling, you have tools to market around that, too. It’s harder, then, to find a more tangible win-win for a business that’s not just forward-looking with its growth, but also with its place in the natural world.

Building off of the creation of recent special report The Service Centricity Playbook: 7 Phases of Morphing from Product Provider to Trusted Advisor, Sarah and Hilbrand Rustema, Founder and Managing Director of Noventum, discuss the five most common areas where companies go wrong on the Servitization journey.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be walking through the five most common Servitization fumbles. I'm excited to welcome back to the podcast today Hilbrand Rustema, managing director and founder of Noventum. Hi Hilbrand, how are you?

Hilbrand Rustema: Hi Sarah, I'm good. Thank you for having me back.

Sarah Nicastro: Absolutely. So Hilbrand and I met a few years ago and I've really enjoyed his insights. Noventum works with a lot of different organizations on their service transformation journeys, and having experiences with companies in different industries and in different phases of transformation, he has a wealth of insights. Hilbrand and I recently paired up to create The Service Centricity Playbook: 7 Phases of Morphing From Product Provider to Trusted Advisor. That special report is available now, both on futureoffieldservice.com, as well as noventum.eu. And of course, we would love for you to check it out. We are not going to be redundant in this episode with the content that's in that report, but instead, we're going to talk about the five most common fumbles playing off of the playbook title, but the areas in which that this Servitization journey is most likely to go awry. So with that said, let's go ahead and dig in to the first one. So the first area, Hilbrand, that is an area of potential challenge and concern is looking at services from the inside out. So let's talk a little bit about what that means and how that can be problematic.

Hilbrand Rustema: Yeah, so it is a very common one where companies look at what they can do or what they are used to do, what their own capabilities is, and then they start to imagine all kinds of services that they can provide. Maybe, of course, looking at other companies. But an essential element that is often forgotten in that process is to listen carefully to your customers and to have a good, hard look at your capabilities, your abilities to deliver any type of service, if that is a real good fit with what your customers really need. And when I emphasize these last two words, what they really need, the challenge here is, very often, if you ask your customers, what do you want? Nine out of ten, a customer will not have a very good idea. They may not be able to articulate what they need or even what they want.

Hilbrand Rustema: And that is because it's a process whereby you have to investigate, what are your customers' challenges? Not just the technical challenges of using your equipment, but more like the business challenges. And then to try and figure out how can you, with your products, obviously with your equipment, your technology, but also with your knowledge and maybe your network of partners, how can you create a better answer to the challenges that your customers have? And that involves usually a lot of knowledge, not just technical knowledge, understanding of the processes, of the business model of your customers, of the industry. And that's how you then create services. And while you are identifying possible new services and when you are developing those, it's highly recommended that you do that as a co-creation process with your customers. And the emphasis is on customers, not just a customer, because there's no such thing as the customer.

Hilbrand Rustema: I think you would have to start with developing a reasonable segmentation along these different service needs, so you say, "Hey, these are, whatever, a do-it-yourself customer. And this is a customer that is a strategic thinker and buyer or a value buyer or whatever you want to call them," and go along those categories or segments of customers, and then try to work through their needs together with them. And we do that a lot with workshopping, in-depth interviews, showing them maybe prototypes of, let's say, the business model, and then eventually go through a pilot process whereby, yeah, you really sort of keep on trying, keep on getting it right until your customer or customers tell you you've got it right. And then the last step in there is making sure that you have created a scalable service, so it's not just uniquely fitting for one customer, but it's for a whole group of customer that you can scale it, preferably on a global basis.

Sarah Nicastro: Right, okay. That makes sense. And I think, the key to Servitization is delivering outcomes that your customers find imperative to their business. And it's just not possible to do that if you don't lead with what those outcomes are that they need from you, so that makes sense.

Sarah Nicastro: Yeah. Okay, so that makes sense. So outside in versus inside out is the first important point. The second point or the second fumble is overlooking the need to master the basics. So looking at really getting ahead of yourself in terms of your transformation before you have put tools in place to kind of build a strong foundation. So talk about this.

Hilbrand Rustema: Yeah, so what we see a lot now is that a company sort of got the digitalization bug and started experimenting with the most fantastic digital services and sometimes ignoring a bit those basics. And what we mean by that is delivering very smoothly your basic services, like, let's say, getting a field engineer locally, on time, when it was agreed upon, with the right skills and the right parts in his hands, is something that looks easy to do because many companies do it. But yeah, unfortunately, there's also still a lot of companies that think, okay, well, that's more or less fine with us, so we can move on. The problem is that your customers have a certain reason to do business with you.

Hilbrand Rustema: And very often, it's not the product you sell or it's the service even that you offer, that's usually very similar to what your competitors do, but it is a certain intangible value that you have in your brand, yeah? And if you wonder what that is, well, try asking around why customers really do business with you and you will find a reason and they may say, well, you're, whatever, the leader in the market, or you really are flexible, or you understand... These type of, yeah, sometimes very intangible reasons to do business with you. Now, you want to make sure that you deliver on those basic promises. And if you cannot, if it's too often that you cannot deliver that spare part on time, there is a certain continuum in what your customers are willing to buy from you as a next stage in the evolution of the relationship that you have with them.

Hilbrand Rustema: And if you don't do these basic things right, so if the expectations of the brand of your company are not being fulfilled, you can absolutely forget that they're going to buy more sophisticated services whereby a higher level of trust is needed from that customer because they're going to be a lot more depending on you for these more sophisticated services. So, yeah, one element before you embark on these outcome-based services, the more sophisticated services, do you have all the basics working very well? And not just on your own opinion there, but what do your customers say about that? And if they are, say, generally very positive, you get good marks on that, then you can continue.

Hilbrand Rustema: There's a second reason to have those basics right that when you start with the more sophisticated services, they're typically more knowledge intensive. And if you don't have your basic processes and systems in place, you don't gather, you don't harvest, the type of knowledge and data that you need. For example, if you go from preventive services to predictive services, your knowledge management processes have to be top-notch, otherwise it's not possible to start with predictive services. So that's another reason why you need to look at the basics and start with those. And it's okay to do some experiments, but just remember that those experiments won't scale if you don't have the basics right.

Sarah Nicastro: Right. That makes sense. I always say that trying to skip over some of those basics is like building a house of cards, right? So you want to make sure that you have a really strong foundation from which to build otherwise it could all fall apart at any given moment. Good, okay. So fumble number three is either thinking too small or thinking too big, so the need to balance pragmatic versus big picture thinking. So let's talk about this.

Hilbrand Rustema: Yeah, so I think that there's a lot of companies that are very good at execution. For example, they want to implement a new system, they really focus on it, they do that very well. But if you don't have that big long-term vision, if you have no unifying, energizing vision whereby everybody understands what you are aiming for in the long-term or what your business stands for, it's going to be very difficult to stay focused. So you can do all kinds of successful short-term projects, but if that is not helping you to get closer to achieving that long-term vision, why are you doing it? So you often see that well-intentioned projects, let's name some examples, a drive to standardize your global service operating model, is really going well. And at some point, whatever, after one or two years, the company achieves it, but then it has taken so much effort and time and sometimes pain that people have forgotten why they're doing it. And they're done and then it sort of plateaus while this was only a prerequisite to implement a bigger vision.

Hilbrand Rustema: And very often, and it's unfortunate, there are companies that have this sort of quarterly-based focus, they just live from one quarter to the next. And maybe sometimes, yeah, managers are not in a role long enough to achieve anything like a long-term vision. So I think that is a balance that you have to find. What I would say is that pragmatism and achieving short-term goals is obviously driving success, but without that bigger picture and not just a picture for the service business, but for the entire business and understanding what is the role that your service organization plays in the bigger strategic vision of the company, without that, it's very difficult to be successful.

Sarah Nicastro: Yeah. So execution is obviously important. I mean, that goes back to kind of our second point, which was building that strong foundation, right? I mean, you have to be able to execute. You have to be able to be on time and have good first-time fix rates and all of those key things. So execution is important, but innovation is equally important. And I think what you just said about the fact that this vision for service and this strategy for, where are you taking the company over the next two, three, five years? It has to be company-wide, not just within the service function. I mean, that's one of the biggest challenges I see within organizations that are trying to sort out their outcomes-based service or Servitization journey is they're trying to do so within a silo of the service function, not at the company level.

Sarah Nicastro: And unfortunately, there's just no real way to... Maybe you can make some incremental changes and improvements, but to really seize the opportunity that's here, it has to be done at the company-wide level. So you need people that can do... In some ways, service leaders have it tough right now because, typically, people as human beings are geared toward either being more pragmatic or being more innovative and big picture thinking, right? And to a certain extent, service leaders need to be able to force themselves to do a bit of whichever doesn't come as natural to them. But from a company perspective, you also need to make sure that you're looking at putting skill sets in place that can accomplish both of these functions in a way that can drive the business forward to meet that strategy and those growth goals.

Hilbrand Rustema: Yeah, I would add to that, Sarah, is that one of the interesting challenges that service leaders always have is when they have that vision clear for themselves on where they want to be in a couple of years' time, let's say they want to go to these outcome-based services and maybe, whatever, offer their equipment as a service or managed services or whatever they want to do, it is so challenging to get all the other functions of the organization along with your own vision. So therefore, there is a role here for the C-suite, and normally, I would say they are really driving it. And as a service leader, to get where you want to be, you need to interact with all these other functions. You need them all, yeah?

Hilbrand Rustema: Like let's talk about sales. If you have a very strong sales force that is good in selling products or projects, they need to be really aligned with that portfolio of services that you are trying to sell along. And at some point in time, it may join together, where you're really selling solutions.

Hilbrand Rustema: Let's look at marketing, doing product marketing is a different discipline altogether than if you would want to do something that I would call service marketing.

Hilbrand Rustema: Look at the finance function. The finance function, particularly if you're going to do as a service propositions, they need a lot of new skills in terms of asset finance management, financial risk management, which don't come natural to any manufacturing organization.

Hilbrand Rustema: Let's look at the supply chain organization, that may be very good at the traditional Ford manufacturing supply chain business, but when it comes to parts management, it's almost the opposite dynamic, yeah? So you're not trying to manage large quantities of the same products in a few directions. No, parts management is trying to move to many different delivery points very small quantities. And your objective is not to lower inventories, but to have the right service level, whereas traditional manufacturing or supply chain organizations look more at the inbound manufacturing part.

Hilbrand Rustema: So, it's all these different disciplines that have to develop an understanding of what your new service business model means to them. And there is a very big educational component in that. And it's simply a, yeah, if you want to have people doing different things, it takes time. And that vision, that common vision, that unites everybody is only the starting point.

Sarah Nicastro: Mm-hmm (affirmative). Yep. Okay, good. So moving on to fumble number four is the inability to combine ambition and agility.

Hilbrand Rustema: Right. Yeah, I sometimes find the term "agility" very confusing. We see obviously a lot in the IT organizations, yeah? So meaning the agile development of new IT applications, which is a good thing. It is definitely very successful as a discipline. But if you want to try to work in an agile way in other disciplines, it often gets misinterpreted. And that is that making small incremental changes is something different as developing an agile application. I think agile is a bit of a fashionable term right now.

Hilbrand Rustema: If you do not have a clear understanding, if your project, if you're running that with agile methodologies, if your project is really contributing to achieving that strategic goal, which is part of that vision, then you probably are just using an advanced project management technique called agile. But it may not really help you to get into the right direction. You can have very successful, agile organizations developing completely in the wrong direction, if you know what I mean. And it is tempting to say everything is agile and confuse that with only short-term views and short-term results and to get into an iterative mode whereby if you contrast that with, yeah, more long-term, let's say, strategic view of the business whereby, according to a plan, you are achieving bigger milestones, that will bring you much further than just always do that small iterative change.

Sarah Nicastro: Mm-hmm (affirmative), mm-hmm (affirmative). So that's why we're saying you have to combine ambition and agility, so the ambition is, what is your ambition for the company around service? Where are you trying to go? And it's okay to make iterative changes to get there, but you need to be working towards those bigger objectives.

Hilbrand Rustema: Yeah, agile is a tool.

Sarah Nicastro: Right. Yes, good point, that's a good way to put it. Good. All right. And the last number, fumble number five, is prioritizing IT-driven change rather than business-driven change.

Hilbrand Rustema: Yeah. Ooh, I could probably talk another half hour about this, but we only have a few minutes left. Yeah, I would say, IT-driven change is one whereby there's a lot of focus on implementing a certain tool and a certain application. And usually, under the name of we have to keep it standard, we have to stick to the IT strategy, this is what you have to live with, you see that a lot of limitations are imposed on the business, particularly the service business, for example, companies that try to promote ERP systems in service organizations, they find that very challenging, rather than customer-centric IT solutions. So business-driven change is the situation whereby, at the end of the day, if some decisions on change have to be made, the one and only final criteria is, are we going to improve our business with this? And not, are we going to comply with our IT standards, our IT strategy? And continuously looking at the business goals, how are we going to achieve those? And if that sometimes means that you have to sacrifice your ideal IT strategy or your ideal IT landscape, I would say so be it.

Hilbrand Rustema: In terms of mentality, I would say there's people that fully understand business-driven change. Usually, it's run by people that have a lot of business experience. And you have people that are put in charge of maybe large service transformation initiatives that have a very strong IT background. And I clearly see the differences in outcome. So in the end, you have with the IT-driven approach, you have a working system, yeah? The system works. But is anybody using it? And is it delivering the right results? That's the question. No. And with the business approach, it's quite the opposite. So are we achieving our results with this solution? If not, let's change it, let's tweak it. And I'm not saying this is the blank check to just start all kinds of customization of your IT solutions, no, in the contrary, I would say most, let's say, mature IT platforms, they can deal with most of the, I'd say, the requirements that are out there nowadays.

Sarah Nicastro: Sure.

Hilbrand Rustema: But yeah, the challenge is the attitude and the type of background of the people.

Sarah Nicastro: Yeah, that makes sense. And I think, as digitalization has become a path to growth, then IT needs to support that growth, rather than just, to your point, serving as a means for compliance and just operational. So that makes sense. Okay. So those are the top five fumbles that we see people make on the journey to Servitization or outcomes-based service. Again, the report that we just published is The Service Centricity Playbook: 7 Phases of Morphing From Product Provider to Trusted Advisor. And these are the five most common fumbles, but that report outlines those seven phases and it provides not only Hilbrand and I's perspective from our years in the industry, but also the real-world perspective from some of the companies that are on this journey. So certainly check it out. Hilbrand, thank you so much for coming back and spending some time with me today and for working with me on the report, it's been really fun and I'm hoping that people will find it very useful.

Hilbrand Rustema: Yeah. Thanks a lot Sarah.

Sarah Nicastro: All right. You can find the report and more information by visiting www.futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter at The Future of FS. The Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS service management solutions by visiting www.ifs.com. As always, thank you for listening.

By Sarah Nicastro, Creator, Future of Field Service

We’re a year into this global pandemic, and I’ve written multiple articles and published numerous podcasts about how COVID has increased the pace of change, made businesses more open minded in how they operate, and accelerated digital transformation. While the roots of this change are unfortunate, the results of how it is propelling service forward are in many ways exciting. We’ve featured many success stories in the last year about how companies like Park Place Technologies, Munters, and Alfa Laval have navigated the turbulence masterfully in a way that has not only provided business continuity but powers business transformation.

But I’ve been thinking a lot lately about how we must temper our drive for change that brings such immense opportunity from a business perspective with some real empathy and patience for what our frontline workers are experiencing. Keep in mind that when you’re owning the vision and setting the strategy, it is exhilarating and exciting – when you’re on the receiving end it can be quite overwhelming.

To put yourself in the shoes of your frontline workers, you really only have to think a bit about how this last year has impacted you on a personal level. We all have our different stories, but I don’t know many individuals who haven’t struggled in some way – be it physical health, mental health, juggling work and children being home, the weight of being an essential worker, and so much more. However, as leaders, we are built to keep our eye on the prize and keep momentum building – and while I’m not at all proposing we grind that momentum to a halt, I think we need to take pause and consider the weariness of the workforce.

Balance Business Needs with The Human Experience

The business needs to continue evolving, perhaps now more than ever. I am simply suggesting that as we find ourselves a year into an incredibly taxing pandemic, we need to consider a bit more than we might normally what the human experience of our workforce looks like and be sure we adjust our business strategy to compensate for some of the needs of our people.

Change management is a topic we’ve discussed in detail for a long time, and with good reason – it is often where transformation efforts fall short, because we overlook or underprioritize the importance of creating not just compliance but adoption among our workforce. I would say that, today, change management is even more critical – because the frontline troops are weary. They’re weary from a year of worry about their health, their families, and their jobs. They’re weary from adapting to new circumstances and requirements, at work and at home. And I believe the onus is on us to make an extra effort in how we manage change to do whatever we can to minimize their weariness.

Adjust Your Strategy, Speed, and Style

Of course, what this looks like in every business and for each change will be unique, but there are three areas I would suggest you consider:

Do you have a solid strategy for managing change? If you say no, well, start there. If yes, ask yourself when was that strategy set – pre- or post-COVID? It might be worth re-examining whether your strategy for managing change is ample for COVID circumstances. Aspects like clearly articulating your ‘why,’ over-communicating, and making ample time for soliciting feedback and addressing concerns are even more important today – you want to think about these steps through the lens of a workforce that is likely stressed, tired, and perhaps worried about how this change will impact their career with your company. It’s important to set extra steps, time, and resources in your strategy to ensure you’re not simply checking a change management box but really helping your employees through an addition to an already-taxing time.
When COVID hit, the companies that reacted well did so nimbly and quickly. The speed of change early on was rapid, and it needed to be. But a year in, we’re all a bit more hardened than we were in those early days. While you may still need to apply speed to certain situations or project, where you can think about how you could perhaps slow down a degree or two in order to alleviate some stress, allow more time for adoption, and incorporate more change management into the project.
I would argue this is the more important of the three to consider and there’s one word I’d use to summarize the style you need to consider to best address this workforce weariness: PERSONAL. In this new often-virtual world full of uncertainty and volatility, we’re all hungry for more human connection. More authenticity, more transparency, more empathy, more understanding. If you’ve used a textbook change process in the past, know that textbook may not resonate today the way it would have two years ago – you need to dig in and think about how to foster a more personal style of connection and management with your employees. The more personal you get, the better your chances of resonating and breaking away some of that weariness to create more acceptance, engagement, and buy-in.

By Tom Paquin

If you—like me—have someone who is currently eligible for vaccination from COVID-19 somewhere in the United States, it’s likely that you—again, like me—have refreshed a state government website incessantly, scrambled over the sudden appearance of an open spot, frantically plugged in you or your loved one’s medical information, and been greeted by a frozen webpage, or an error message, or a notification that there are no vaccines available at your given location.

I live in the state of Massachusetts, whose initial vaccine rollout, for various reasons, was poor. And in spite of some improvements, on the 18^th of February we moved into Phase 2 of rollout, offering vaccines to people 65 and older, thus flooding over a million new people onto the sites and into the vaccine queue. Perhaps unsurprisingly, this has led to frustration, anger, and confusion as the scheduling portal buckled under the traffic and those without constant access to a computer or who can sit on hold for over an hour are left in a lurch.

This has left many, myself included, frustrated, demoralized, and unsure of what to do next. So we’re going to channel that frustration into what we love to do around here—applying a service-oriented mindset to the COVID-19 vaccine rollout!

While we are quick to talk about service management in the private sector, it’s important to remember that nonprofits and public works need service support too. Often their confluence with the private sector is a blurred line, to begin with (especially in the case of these rollouts, most of which are happening with the help of private enterprises) but, though customer retention is less of a concern for governments and municipalities, mitigating waste and maximizing customer happiness is paramount to successful operations.

So let’s look at a few tips for how to take vaccine rollout and make it right for people:

Stress Testing and Scenario Modeling

Naturally, one of the biggest problems with the vaccine rollout has been the volume of people accessing the web crashing the site. Those who eschewed the website and called have met operators who are also attempting to access a crashing website. How can these issues be mitigated in the future?

My state, like every other land mass on the planet, has a given number of human people in it. That number of human people accessing a scheduling system, under any circumstances, can be simulated. It is something hackers do frequently. A key to any rollout of a customer-facing system is stress testing the load of users at a given time. Managing that load means managing not just the traffic, but how that traffic is queued, how it is routed, and how it is prioritized.

Getting these right in any service scenario will benefit from a favorite topic of mine: simulating service interactions. “What if?” scenario modelers are easier and easier to enable (most commonly in the planning and scheduling world), and can show outcomes at various volumes crosschecked across other conditions. The confluence of these give a picture of overall system health and allow businesses to build immediate contingencies and systems for roadblocks.

Meeting the Needs of Diverse Stakeholders

I am privileged to work in a job that offers me the ability to sit in front of a screen for eight to ten hours a day. Because of this, I could conceivably spend all day refreshing the “Vaxfinder” portal indefinitely and snatch up the latest appointment in between meetings and production work.

People who ironically work in many of the industries that are exposed far more frequently to the public—Postal workers, bus drivers, food service workers, and so on—Lack that privilege. You could argue that this is a socioeconomic failure and represents greater fissures in the foundation of civilized society that have been unearthed by this crisis, and I’m not qualified to say whether or not that is true. I’d argue, though, that a small way to begin to repair such fissures would be through ensuring racial and economic equity with respect to the rollout.

It would be wrong of me to say that technology will save us from our problems, and good people are working to combat this legislatively. But by developing triggers, allocating appropriately into specific demographics, and, plainly, ensuring that the rate of vaccine utilization matches the demographic makeup of the state, region, and so on, is important.

This succeeds though systems of tracking, and is a reminder of the importance, in any service setting, that tracking is never, ever a binary. Lifecycle tracking begins with the supply chain, though the delivery of service (or, in this case, jabs), and finally, the follow-up and demographic management. If that’s not measured in a single, unified way, then you can’t match demographic shortfalls to an increase in the supply chain.

Obviously in the walled garden of a private enterprise, this is easier to do than for a government or nonprofit, but thoughtful development on the front-end can, at the very least, mitigate and correct some of these issues.

Unfortunately, because of that, this article functions more as an allegory for service delivery than a solution that governments can take to heart. But when it’s time to schedule your own jab, consider how your own business is managing supply chain, service, and volume, and if there’s a way to do it better, more equitably, and with less friction for all of your customers.

Madhu Karnani Oza, Director, Customer and Technical Services Asia Pacific at Abbott, talks with Sarah about some of the key considerations around where to place the service function within your organizational structure to achieve the greatest success if you’re looking to evolve, advance, and progress your service focus and revenues.   Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about how to structure a company properly to achieve service success. I'm excited to welcome to the podcast today Madhu Karnani Oza who is the Director of Customer and Technical Services for Asia Pacific at Abbott. Madhu, welcome to the podcast.   Madhu Karnani Oza: Hey Sarah, I'm glad to be here.   Sarah Nicastro: Thank you for being here. To kick us off, let's have you tell the listeners a bit about yourself, anything you want to share about your background and your role at Abbott.   Madhu Karnani Oza: Currently I am the Director of Technical Services for Electrophysiology business at Abbott for Asia Pacific. I'm based out of Singapore. Currently we're responsible for all technical remote services, field services, professional services provided post-sales. Most of my career I've spent within this company, within in St. Jude which was bought over by Abbott, in various roles in product development and then over to telehealth operations. That was when I was based in California. We're based here in Singapore, loving it. I have three children, in between that and work and everything, we're pretty busy.   Sarah Nicastro: I can imagine. Similar here. You had shared that you were born in India and then you went to, was it graduate school in the States?   Madhu Karnani Oza: That's right. University of Wisconsin.   Sarah Nicastro: All right. Then you took the role in Singapore. The reason I mention that is because when you and I connected and we started talking about some of the trends in service and the evolution of product companies towards Servitization and things like that, it was interesting because we could talk about those viewpoints from almost a regional level and the differences in where folks are at in that journey. As we talked about that, one of the things that came up in conversation is the topic we're going to tackle today which is as a company looks to embrace service more as a strategic differentiator as a path to revenue growth, what does that look like operationally? Where does service reside in the org structure to have the best chance of success? This is something that comes up these days in a lot of my conversations because people are struggling with trying to figure out what is the best situation for their business.   Sarah Nicastro: I wanted to start with saying there really isn't one answer. It's going to be individualized based on each person's situation. It could even evolve over time but I know it's something that you had some opinions on, based on your experience. I thought it would be really interesting. Before we talk about some of the choices, some of the pros and cons, et cetera, talk a little bit about why this is such an important topic. Why it's top of mind for you, why it's top of mind for a lot of other people in service roles.   Madhu Karnani Oza: Basically, if you think about it, there was a time when product companies were product companies. I think in the last couple of decades, various sectors have moved toward using service either as a differentiator or as you said, as a revenue generator. The fact that companies are going through that change means that now there's something new, something that's traditionally not very well known. That's why, I think, different companies take different approaches. A lot of them are not very deliberate approaches because it's something new, it's just sort of happens. I think that once it happens and then you're moving through the phases of growth, that's when you start to realize, "Wait a minute. Why is it like this? Shouldn't there be another way?" I think a lot of it is just growing pains.   Madhu Karnani Oza: The other reason I think it's also important to talk about this is because I talk to several people about this because it's a dilemma in a lot of our minds. I talked to people about it, it's amazing to me how when people are giving you their response, they give it to you like it's so obvious. But yet, all of them have such different views. I've talked to people who are like, "That's a no brainer, it belongs here or it belongs there." I think because of that, this is, I think, one of those conversations people should have. For some reason it's obvious in a lot of minds but they are very, very different answers.   Sarah Nicastro: Yeah. That's a really good point. The first piece of advice, then, what you said, it's not always deliberate. Companies can start on a path and then find themselves where, okay here we are and here's how we've set things up. Now we're just kind of forging ahead. If a company were wanting to be more deliberate, what are some of the considerations? What's your best advice for how to be a little bit more strategic and a little bit more deliberate in setting some goals to determine what the best structure is?   Madhu Karnani Oza: I think as you said, I really think this is one of those things that people need to be deliberate about. It's okay that I think things have evolved how they have evolved. That's totally natural. You have something new, it sticks somewhere but I don't think it needs to be the answer forever. I think service is very unique because it has a very highly operational aspect to it but also extremely customer facing. It's in a very unique situation as to where it is. I think that's why people really need to be deliberate about this decision. I think that the first thing to do is for leadership, management leadership, visionaries, to step back, take a think, have discussions, agree and then the last piece, which is communicate. I think this is one of those discussions that needs to be happening deliberately. Step back, look at what is the goal of services in your organization. What is its impact to your business? How much of your business is service going to be dependent on. There are direct dependencies, like direct revenue, and there are a lot of indirect dependencies like what pull through is it going to have for your product, for example. Or is it going to be generating goodwill for your company and thereby has some really indirect impact to your business.   Madhu Karnani Oza: I think first of all, it's important for companies to step back and think through, what is the goal of services for your company at that point of time? I do say it does evolve. This is a conversation that needs to be had, honestly every few years depending on how service is changes as part of your business. That's what I would say is first of all, step back, think about it. Have your opinions and whatnot but then come together, discuss, come to an agreement. Now, I can't emphasize enough on the communication piece of it. I do think that a lot of this comes top down. I think a lot of these decisions, these discussions, et cetera, they start top down. They must. But I also don't think that working in silos is a good idea. You have some sort of definition up top. I think it's very important to start trickling that information down, being able to get some of your key people to provide their opinions because you're sitting up here but unless you know what's happening in the real world, your decisions are not going to be fully informed. That last piece of, before it's absolutely set in stone to communicate, communicate up and down and ensure you have all those points of view. I think that would be very, very key.   Madhu Karnani Oza: I think during those discussions themselves; I think certain obvious answers may even present themselves to you by having these conversations. Not just amongst the leadership team but also with customers and with your people who are actually on the ground. That's one thing. I think that also helps to build culture and again, cannot emphasize enough how important it is to build culture. A lot of our companies are extremely large. A lot of it is consolidation and share resources and so on, multiple businesses. It is truly important to set that culture of not only are we thinking this through, we're talking to you. We want to know what you're of thinking and our decision is going to be an informed one.   Sarah Nicastro: There's a couple of really good points in there. The one thing is, like you said, it can evolve. The path you choose isn't necessarily set in stone. You can always evolve and pivot. One of our recent podcast guests headed up service transformation at GEA, the food manufacturer. She actually talked a lot about a 10 year trajectory and how it started as a pretty small, focused team looking at what is the service opportunity. Then it evolved into a formalized group and then eventually as it caught on, it was infiltrated into the business at large to where it isn't its own entity, it's sort of blended in. That's a good point. I think the other thing is depending on the industry and depending on the goals of the business, some companies have an objective to really, truly become service providers. Even if they do manufacture a product, it's almost going to be part of the service. That is the path.   Sarah Nicastro: For others, it's just an area of the business that maybe they want to grow and expand on but not necessarily all the way to that point. Having some idea of where you want to get to, while you're not setting it in stone, having an idea of where you ultimately want to land also prohibits you from taking steps that are going to waste time and energy and effort and resources. The communication part is key. The other thing I've seen is situations where the desire to really emphasize service or expand service is not coming from the top down, it's coming from service. Then that's a very frustrating spot for the person that sees the opportunity but is in a silo and doesn't have the ability to really influence, to the degree they want, the outcome. Very good points. We'll get into some hypotheticals I guess. Let's talk about as a company as considering how to structure, we, in our previous chat, identified three main options. Let's talk through those and then talk a little bit about the pros and cons of each in your opinion. The first is commercial. Structuring within commercial.   Madhu Karnani Oza: First of all, I think before we get into those pros and cons, it is very important to clarify that whether the service organization resides within operations or commercial or whatever you decide on, having a separate entity with its own leadership, meaning service as an organization with its own leadership, I think is first of all incredibly important. Wherever it resides, whatever I'm about to say in terms of pros and cons, there's no doubt that there needs to be a separate leadership with focus on service. Secondly that you need something like a service excellence organization, service transformation, whatever you might call them, the people that are not on the ground providing the operational service but some of the people in the background who are looking how to improve it, how to roll out new services and new tools and things like that.   Madhu Karnani Oza: To me, first of all, that's a given. I don't want that to be in any doubt whatsoever. That's absolutely necessary. But having said that, having formed this organization now, the question is where do they fit in, in a company? That's why, as we said, the first potential answer would be, for example, commercial. First of all, this is something I do a lot which is that the main thing service is about is service. It's customers. In an interview, I will often ask people, in every interview I will ask people what do you think this job is about or what's the main goal or what have you? If the word customer service is not part of that answer, that's usually the end of that interview because you've got to understand whatever your end goal, whether it is to generate good will or generate culture or to generate revenue, it doesn't matter. It is all very customer centric. Keeping that in mind, that service is all about that customer, you've got to have a team structure that enables the company, the employees of the company that interact with the customer to be one team. To appear as one team. To not appear fragmented. To not have separate goals or be working in silos.   Madhu Karnani Oza: If I am a customer and I hear, let's say it's my cell phone and I'm talking to two representatives. One is trying to sell me something and another who is trying to fix my problem. If I feel like those guys haven't talked to each other, or they have separate goals, they're pushing their own separate agendas on me, that's not great customer service. That's a very simplistic, consumer type of example but I think it applies to anybody out there, whether they're dealing with large capital manufacturing equipment or large medical equipment or diagnostic equipment, it doesn't matter. They don't want to have these large companies pushing on two different fronts. They want to provide that one single face of customer service, customer most important, whether you're selling something or you're supporting something. I think it's very important. I think that service being a part of commercial, I think, facilitates that because now people have got the same goals, you're being led top down by the same leadership, the same organization. I think it just makes it a lot easier to have that one team, one face kind of approach to the customer. I think that's absolutely the biggest pro of having service be a part of commercial.   Madhu Karnani Oza: Now, I will put in the disclaimer here that some of this is also culturally made harder. For example, I think in some countries, I have seen where in an organization it was not part of commercial that it actually works okay because they're used to collaborating with each other and the customer sees no issues, they don't see any kind of separation or anything. It does happen. I think when you start thinking about it and I'm more sensitive to this, having worked on different continents, is that there are cultures where there's a lot of hierarchy within an organization. If that hierarchy is such that one of those, either the service guy or the sales guy, one of those feels more powerful or acts more powerful than the other, which happens a lot, then that's going to tilt that one face approach again. It's not that easy at that point in time. At that point in time, you need that organizational structure, the organization goal to allow both of those people to have the same voice with the company. To be able to collaborate and not for one of them to dominate the other. This is honestly just everyday stuff that happens at companies at various levels.   Madhu Karnani Oza: I do think that culture makes a difference as well. Whenever I talk to people from some of the countries that my peers in other regions will say, "Oh yeah but we've never seen that problem because the two organizations still work very hand in hand." I agree, that's true, but it does make it harder in some cultures and so on. Anyway, that's a big part of it is the pro in this part for commercial. Now, the other big piece is hello P&L. That's how all business decisions are made. You have the revenue piece, you have the cost piece and boy, looking at them separately is not a good idea. You can't have one without the other. When you're making business decisions, where should you put resources? Where should you provide better tools or maybe a new tool? Or where should you go to innovate? You've always got to look at both sides of that. When commercial is separate from service, one is looking at the revenue, the other is looking at cost. Then the conversation isn't a complete conversation. Again, it can be done. I can sit here and look at both sides but I can be siloed in one team. It's just not the same thing.   Madhu Karnani Oza: A very simple example would be if you're deciding whether to buy or fund a project that would aid in a decision-making tool. In terms of cost, an operations team is going to think of, "What's the cost effectiveness of that? By adding this tool am I going to save headcount somehow? Remove manual work and thereby save headcount?" That's going to be their focus on it. But, on the other hand, if that tool facilitates decision making, there's no easy way to quantify what that's going to bring in, in terms of revenue, because you don't know. But eventually it should. That's the kind of conversation that needs to be had when you look at both sides of that coin. I think that's what is facilitated when you have service and commercial working as part of one organization.   Sarah Nicastro: Okay. What about cons?   Madhu Karnani Oza: That one, you have to think about that one a little bit. I do think there are a couple of things. There are cons to this as well. One thing would be that, depending on your industry, depending on the customer, there are times when you hear the customer really likes their service guy because the service guy isn't trying to sell them anything. I think some of that may become blurry if the service and commercial lines are not well drawn, if the responsibilities and goals are not well separated. Suddenly, if the customer feels like everyone in this customer is just pushing and peddling for something, we don't want that to occur either. You want a high trust factor. Somehow you do need to make sure that even if service and commercial are one organization, that there is that empathy and that trust factor you continue to grow with the customer and now appear sales-y to everybody.   Sarah Nicastro: Right.   Madhu Karnani Oza: I think that's really it in terms of the cons of that approach.   Sarah Nicastro: Okay. All right. The second choice would be within operations.   Madhu Karnani Oza: Yeah. With operations, I certainly think that, again, it's about the phase at which you are. When you're trying to operationalize something new, I think operational teams are very good at that. Getting the team together, the right people, the right processes. Process is very, very, very big in service. That is something that I think operations teams, their thought process is very well suited for. When you're an immature organization, it makes sense to get that help with operationalizing something new. I've certainly seen that be very, very successful. I think secondly, the other big plus point of being under operations is that as you know, operations is very good at efficiency, productivity, KPIs and then running with those numbers and being very, very good about not digressing. Staying on that track. That discipline I think is very high in an operational team. That naturally works well for services. You have a field team or whether you have a remote support team or you have both, just having those specific KPIs and running through things and never letting your eyes off of that because boy, your bonus is tied to that 0.2% deviation. I think that makes a very big different. It does help the operational side of services in a big way.   Madhu Karnani Oza: I think the other thing, also, is depending again on your business, being able to tie back to capital management processes, which is usually an operations process, manufacturing and operations and distribution process, just being able to tie back with that because so much of what service does in a capital organization is capital movement. That's where the cost, honestly, comes in depending on your product and your organization. Usually a big part of services is parts. The exchange of parts, the repair of parts, all that ties in very well with operations. Another very big plus point of being part of operations and I've seen both of these factors really come into play personally as well.   Madhu Karnani Oza: On the con side of the operations piece is that, like we mentioned, you're a separate team from commercial and sales but you're both very customer facing and now it's that difference in goals, difference in mindset make it harder for you to have that one face of the company customer service, that one brilliant experience that doesn't feel like it's fragmented. That piece. Then of course the fact that, again, if you're very focused on cost only as part of operations, then I think you miss out on some of that innovation that you could have in creating a new revenue stream. Your focus is so wholly on staying within KPIs that the innovative spirit is left up to someone else. Neither side is really looking at that piece. I do think that's a lot of con of the whole thing.   Sarah Nicastro: I think that's the biggest one, honestly. Right now, to me at least, that's where the industry is at is that innovation. Customers want different things, how do we meet those needs? We have different opportunities to deliver adjacent, complimentary, advanced services. How do we position ourselves to do that. To me, if you don't sort out how to work that innovation in, you become very stagnant. I think the pace of evolution is so fast right now within services that if you don't prioritize that innovation, you're going to have some trouble.   Madhu Karnani Oza: That's directly tied into right now what we're seeing in the world, which is this digitalization, which has been accelerated by COVID but honestly it was very much a need even before 2020. As you say, then there's no one thinking of both sides and being able to say, "I want to be able to provide this other service or a better service or be on a digital platform and increase throughput or efficiency or just customer satisfaction and ease." Then your service organization just becomes, "Look, I've got a job to do and my goal is to meet these KPIs and that's that." That may be an oversimplification of things but honestly, this stuff makes a huge difference in the culture and the mindset. If the top down vision does not include that innovation and being able to think outside the box and to be able to take very calculated risks, then progress will be incremental only. It will not be making a big jump of progress, I think it's very difficult.   Sarah Nicastro: Particularly when you think about service in operations, what comes to mind for me is, as you said, it's been driven historically by efficiency, productivity, cut costs, minimize head count, all of those perceptions. I think part of the impact of that, then also just generationally with the workforce is they're just, "This is what we do." It's show up, do your job. They don't necessarily think out of the box. They're not, in any way, inclined or incentivized to bring new ideas to the table. I'm over generalizing but I'm saying in terms of some of the drawbacks, they are probably not interested in expanding soft skills and customer facing traits. They just want to show up with a toolbox and fix what they're fixing and move on.   Madhu Karnani Oza: Exactly.   Sarah Nicastro: I think the innovation thing and the evolving the thinking, evolving the culture, you really have to get out of that operations mindset. You need it but you have to, like you said, be able to marry the two worlds together, strike the right balance, those sorts of things.   Madhu Karnani Oza: Absolutely. I think the mindset thing I think is big. As you said, if your job and your goal is to get in there, get your stuff done and get out and that's that. You're driven by KPIs or "How much time do you spend over there at the site? Let's minimize that." The culture of customer relationships is generally a more commercial concept than an operational concept. While again, as I said, absolutely things can be done irrespective of where you belong but-   Sarah Nicastro: Sure.   Madhu Karnani Oza: ... culture is top-driven and it permeates through whatever group you're in. I think the other aspect of that is that it really is difficult to create that culture of innovation and customer service excellence, there's also the fact that the talent that you attract and the talent that you retain can also be impacted by that culture. The people you attract and then retain are the ones who like that operational productivity, efficiency driven work. I think it has a ripple effect, it's not just your culture today, it's your culture for the future as well.   Sarah Nicastro: When you talked earlier about communication, one of the things I think about is in that operational culture, even if you have a vision at the top for this innovation, you can communicate that vision but the goal isn't to drive compliance. The goal is to drive commitment to that. If you don't have the people that have the right frame of mind, personality type, inclination, incentives, too, it does come down to there are some people that have been doing that operational role for a long time. They don't want to sell or they don't want to be a trusted advisor or they don't want to have a consultative relationship with the customer. This is why it's an evolution not a, "Boom, let's make this happen."   Madhu Karnani Oza: Yeah.   Sarah Nicastro: When you really start digging into the layers, those are the things you come up against. You can't just have some super cool, fresh thinking upper management that comes in and is like, "Here's what we're going to do." You could have the best change management strategy but if you don't have the right people, at best they're going to comply. You're not going to have the customer impact you want by just compliance. Then it becomes a longer game of seeding the right talent and thinking about how you want things to be in two, three, five years. It's really cool stuff. I say that because I talk to people about it and not actually do it, which is a little bit different. All right. The third option would be to have this as a totally separate entity. Let's talk a little bit about that.   Madhu Karnani Oza: This one I will say I have less experience in and whether first hand or even further degrees removed. I think the biggest pro for having a completely separate entity I think would be the ability to make change really fast. You want to develop something, a new service and a new model and new everything. You get that freedom to be your own entity, be more entrepreneurial, be fast, be agile. I think if you're that autonomous, surely I think the ability to make that change can be very quick. I do think there's something to be said about that. That's why going back to what you were saying, it's about where you are in that journey. What's right for your company, what are you developing, what do you need it to be? What's that vision? Based on all of that, there may be situations where you want it to be a completely separate entity, which is just doing its own thing. I do think that's definitely a possibility. Also if service is going to be a massive part of what you're doing, then of course I think again, it deserves its own entity as well, perhaps. I think those would be the reasons for being separate. Really it's all about that driving a very big change in a very short time. That's what you need to have. You need to be autonomous to that level.   Madhu Karnani Oza: On the other hand, you kind of get the disadvantages of both the earlier options we talked about. You have a disadvantage of you don't really have KPI driven operational discipline in that case. Again, you go right back to the fact is your commercial group different and you are separated. How do you provide that one face, one name customer support. You do still have those same challenges to deal with as a separate entity. Again, as I said, if it's large enough, if it's a big enough proportion of the business, absolutely it does make sense at that level. Especially if you want to innovate really fast.   Sarah Nicastro: I think the other consideration here, though, obviously it would vary company to company but what does the customer journey look like? I think this also poses the biggest risk of not providing a consistent, cohesive experience. To me, that's another big-   Madhu Karnani Oza: Exactly.   Sarah Nicastro: ... point of consideration.   Madhu Karnani Oza: Exactly. I do think the way you would think about it is that there's a company that just needs to make some innovation and really, really quick. They don't have the time or whatever. I think it could be a good intermediate step.   Sarah Nicastro: Almost like an incubator.   Madhu Karnani Oza: It is exactly that. Go off and do this thing.   Sarah Nicastro: That's sort of how the woman I referenced earlier from GEA, that's how that started. She basically said it almost went through these stages and then it became where there is a chief service officer in each function. They are responsible for driving the innovation, all of those things. But it's really integrated into the business. It started out as a separate small team that was just driving them forward.   Madhu Karnani Oza: Exactly.   Sarah Nicastro: As we said earlier, it could certainly evolve and it very well may. I think there's some good points that you've brought up for people to think through and consider and weigh. To your point at the beginning, I think people find themselves working off of a structure, whatever that originates as and not necessarily being deliberate about thinking if that's the best structure for their goals or if they should even be thinking or working toward something other than that. All right. Here's a good question for you. If I forced you to pick one, what would it be?   Madhu Karnani Oza: I'm going to go the political way on this. I do think it depends on where your organization is at. As I said, if it's going to go to the point where you need to make a fast change, go develop something off to the side and then eventually integrate. If it's just about setting up operational efficiency and discipline, if that's what is needed, absolutely go to that. I would say in a majority of situations that I've come across that, as I said, because customer service is absolutely at the heart of your service organization, being a part of a single commercial organization I think would probably get the most top votes for this particular question because it is important that at the end of the day, your customer service be excellent irrespective of what your end goal is. It starts and ends with that customer experience. If the best way to provide that and to innovate for that is as part of commercial, I think that's the way to go. There's no right answer, there's no one answer. People can do-   Sarah Nicastro: All right. That's fair enough. We touched on these but let's revisit some of the key points of consideration for people. Knowing your end game. You might not have 100% clarity on that but at least having an idea of strategically what is the role of service where you're headed and how does that weigh in?   Madhu Karnani Oza: I think it's important to have some marketing functions dedicated to service. Those are the guys that help you put your strategy together. Where service strategy fits as part of the overall business strategy, it's just important to know why we're doing this. I do think that again, knowing that end game and being deliberate in communicating it is just really important.   Sarah Nicastro: We talked about gaining the trust and optimizing the experience of the customer, I think that's pretty clear. Culture, one of the things you just said is in a lot of manufacturing industries that have deep, rich history it's also infiltrating service into the culture. It's not just this is something that happens after we sold something and something breaks but starting to really plant seeds, even before you want to make any major changes on here's why this is way more important than you may think.   Madhu Karnani Oza: Actually, to tell you the truth, I think one of the things that we will often say, it goes on slides everywhere I'm sure, in all companies. One of the things, when it comes to service is a common theme, that is a lot of the hurdles we face are internal. A lot of the hurdles we face are culture. Internal culture which is the mindset of even the folks within your organization. Do they believe in what service can do? That has got to be a big one. That actually helps you decide where that should reside. If the internal hurdle is high, the internal cultural hurdle is high, then you want your service organization to be front and center. You want that message to be out there that this is important and it's going to be part of whatever is the most central organization for that product. It may be operations and it may be commercial. If you want to send that message that it's important, you've got to put it where it shines and not tucked away.   Sarah Nicastro: That's a really good point. I think that's a struggle that everyone shares that's really trying to make strides here. I think the one we haven't touched on is tying the field to R&D.   Madhu Karnani Oza: Again, that one ... The reason I haven't brought it up so far but it's a consideration is that it just works differently in different companies. Whether which of your groups has a better tie-in with R&D because the people on the field, the people working with the customers, they understand what the issues are. They are the best form of input for future innovation. Again, in most cases, if that's going to be a field organization, which is usually the commercial organization, the customer facing organization, it makes sense to also have service in there because then you can tie it all back in together as one bowl of feedback over to R&D to be able to create in the future. But that's not to say people in operations don't have that tie-in to R&D. In fact, in several organizations they have a better tie-in to R&D. I think that could go either way. It's one consideration. Overall for providing better service is also to innovate using that service team force.   Sarah Nicastro: All right. We've given a lot of advice.   Madhu Karnani Oza: Yeah.   Sarah Nicastro: If you had to summarize or give any final points on weighing these decisions and carving a path forward, what would it be?   Madhu Karnani Oza: I guess I think more of to summarize what we've touched upon already is first of all, be deliberate. Do not let it be sitting by the wayside. It's okay to not make a change but it's not okay to not think about it. Be deliberate and set your vision end goal. That one step of setting your vision and goal and then communicating it downward, it's so important. Look at the life cycle, where in the life cycle you are. Is it to establish a new service? Is it to operationalize? Is it to scale up service? Or is it to drive innovation and to drive revenue or drive pull through of your product. I really think it's important to figure out what you're after and what role does service play in that overall vision and goal. Then communicate. Be deliberate, think through those things, have a vision and goal, communicate those. Then the last piece of it is always have a timeline to revisit. It's okay to make a decision today but know that it's not forever and that you need to evolve. Again, service is unique. It doesn't always have an obvious answer as to where it belongs. Be ready to make those changes as and when needed but have a timeline. Be deliberate. Think about it and communicate it.   Sarah Nicastro: The other thing you said earlier that I really like that I'm going to add for you is take calculated risks. I think that's an essential part of all of this mix right now is to not just stick with the status quo or not just make incremental improvements but look for areas where you really are willing to make some-   Madhu Karnani Oza: I give my own team this example often which is that Domino's, I forget the year of the decade which this was but probably in the 80s or 90s I want to say. Domino's was struggling a bit with their business. There was a lot of competition, their pizza was good but it really didn't set them apart from anyone else around at that point in time. Then they had this thought of delivering within 30 minutes. That wasn't part of their product, it was a service. It required innovation, it required thinking outside the box. It required being able to understand what the customer wants. I always think about that and tell people that's how you need to be thinking. What is the equivalent of the 30-minute idea for us? What do you think we need to really differentiate ourselves? That's one of the main things that Domino's has. Everyone in the world knows about its 30-minute promise or it's free. I think we need to have that innovation and that kind of thought process. I think that's truly important to be able to think outside the box.   Sarah Nicastro: Good. The pizza box.   Madhu Karnani Oza: The pizza box. There you go.   Sarah Nicastro: Madhu, thank you so much for joining me. I really, really appreciate it. This has been great. The audience doesn't know this but you and I have already landed on our second podcast topic. I'll be asking you to come back and spend some more time with me sooner than later. Thank you again. I really appreciate it.   Madhu Karnani Oza: Absolutely. Loved it. Thank you so much for having me.   Sarah Nicastro: You're welcome. You can check out more of our content by visiting TheFutureOfFieldService.com. You can also find us on LinkedIn as well as Twitter @TheFutureofFS, the Future of Field Service podcast is published in partnership with IFS. You can learn more about IFS Service Management by visiting www.IFS.com. As always, thank you for listening. </div> </div> </div> </div> <div class="col-12 col-lg-3"> <div class="form-wrapper"> <h2 class="form-tittle">Stay Connected</h2> <iframe src="https://info.ifs.com/GM-CP-CU-2012-12-FoFS-Newsletter_IFrame.html">

By Sarah Nicastro, Creator, Future of Field Service

IDC estimates there will be 55.7 billion connected IoT devices (or “things”) by 2025, generating almost 80B zettabytes (ZB) of data and says “organizations continue to connect their internal processes across roles on a digital platform; and these same industry organizations are realizing the importance of expanding their ecosystems to meet market and customer need, and be more flexible and resilient.”

We all recognize the criticality of gathering data, but do we have clarity around exactly how to make the most of that data? Based on my recent conversation with Dr. Andreas (Andy) Schroeder, Reader for Information Systems at Aston University and Digital Lead for the Advanced Services Group, it seems the answer in most cases is no – particularly as we look at the paths for monetizing data. Andy and I recently recorded a podcast, which will be released soon, during which he demystified some of the common challenges around how to leverage data to increase revenue.

The Chicken and Egg Syndrome

The first point to get clear on is what comes first: strategy or technology? As Andy explains, data is an answer that should be answering a question that is tied to your strategy. “Technology or data, information technology is a way to answer questions,” he says. “The questions that need to be answered are defined by the business model. So, if my business model, for example, says I provide heating as a service, then the question is, for example, how much heat does my customer need, how much comfort does he or she need? This is a question, and then we can look at how we can use technology to answer this question.”

Leading with strategy and focusing on what questions do you need to answer to deliver value to your customers is the best way to approach putting technology in place to gather the right data. Too often companies get ahead of themselves by putting technology in place and collecting data that they aren’t sure what to do with or how it fits within their value proposition. This can waste valuable time and create overwhelm, so you are better of setting your strategy first and defining exactly what questions you need answers (data) to.

Clarify Your Path to Revenue

This was my favorite quote from the podcast with Andy: “We all agree that Servitization is tightly linked to digitalization, but I would go even further and say that Servitization is the way to monetize digitalization.” He goes on to explain the cohesiveness that should exist when it comes to your company’s evolution from product provider to Servitized business, digitalization efforts, and new customer value proposition.

Clarity around how best to approach this puzzle is where the majority of demystification needs to occur. “A lot of the IOT investments that we're seeing, may not pay off on their own unless they're wrapped into a business model that takes advantage of being able to monitor something at distance,” explains Andy. “There are some huge misconceptions around Servitization. Servitization is not a statement of, ‘We are not good at producing products.’ It's a statement of, ‘We can provide our product as a service because we have the best products around, because we can provide products that we can put a lifelong commitment to instead of our competitor who is more or less happy when they don't have to be involved with that product long-term.’”

When there is confusion around or resistance to the idea of morphing to a Servitized business model, the value proposition tends to be presented in a fragmented way: product first, then service after with new data capabilities added on as digitalization efforts mature. This fragmented approach is all wrong, because not only does it not embrace the true meaning of Servitization, but it pieces out the value that customers are willing to pay for into siloes that aren’t at all meaningful to them.

“If we take the narrow term of monetization, that means money for data in the way we can interpret this,” explains Andy. “We’ve found that in a lot of companies that we work with, they come with ambitions of being able to monetize the data on its own. Some make investments in development platforms and so on and so on, to be able to communicate data and insights to the customer. Very, very few are managing to convert this into actual business propositions that are being taken up by the customers.”

What Are Your Customers Willing to Pay For?

What Andy is describing is a challenge I’ve heard tale of many times – a customer isn’t receptive to paying for data or a new tier of service contract enabled by that data, because their expectation is that as their trusted provider, you will extend your latest and best capabilities to them. In other words, they are interested in the outcome – not the path to the outcome. “What we find is that a lot of times, the customer is not willing to pay for the data. There might be different reasons, there might not be enough value in the data, or the customer might say, ‘I buy your product and you want to charge me to tell me when my product will break? I mean, I'm your customer, why don't you just tell me? Why would we have to have a different loop, why do you want to charge me extra for it?’”

This is why, in most scenarios, the path to data monetization needs to be a natural part of the shift to Servitization or outcomes-based service, not an initiative on its own. “In the wider context, the way to monetize data is to make it part of the entire service proposition,” says Andy. “To be honest, the customer doesn't really care to know when the machine breaks in a service context. In a service context, you're contracted to make sure the machine doesn't break, and there's a penalty associated with the downtime of the machine. Why would the customer want to know? For curiosity reasons, yes, but it is your responsibility. By folding data into a service proposition, you can more easily monetize it because you are translating it into tangible, substantial value.”

Now some organizations who have advanced quite far on the Servitization journey have also seen success in monetizing data in additional areas beyond the core service value proposition – by leveraging data as a way to provide valuable knowledge and business insights in more of a consulting manner. While this isn’t yet the norm, it is also worth considering how data may play a part in your revenue growth if you can glean insights from it that provide value to your customer base beyond informing your service.

Stay tuned for this podcast coming soon, where Andy and I discuss these themes in more detail and also walk through important tips for collecting the right data for your needs.

By Tom Paquin

I am a creature of the retail world, having spent my young and early professional life in it, both directly as an hourly employee, and then indirectly in advisement to some large retail brands. Because of that, it’s something that I talk about here frequently. Most of the discussions that I’ve had have been about the actual retail go-to-market strategy for retail organizations: Where service can fit in their current day-to-day operations. This means focusing in most instances on service rather than field service, utilizing what physical space is available to provide experiences for customers who are standing on your property.

Field operations, as they relate to retail, usually fall into two categories: building physical infrastructure for delivery, repair, and installation services, or the act of delivering service to retailers. Having discussed the latter in some detail, let’s focus on the expansion of companies towards delivering actual field operations outside of retail.

It’s easy to see this in a binary—the only field service you could provide, as a bookseller, for instance, is a product delivery service. But is that the only service that you could provide? Are there opportunities to servitize the book-buying process, perhaps through subscription-based book clubs that provide books to members each month and organizes and runs their meetings, perhaps in partnership with local catering? The technology potential and intersectionality of local businesses have finally caught up with the ambitions of business owners…let’s not stifle out-of-the-box thinking now.

Obviously I can say things like this without consequence, since I don’t need to find the money, resources, and infrastructure to make it happen. With that in mind, let’s talk about some of the logistical considerations that could help connect the dots.

Appropriating field workers

How does one “staff up” for field operations? How do you manage the vehicular costs, material costs, and labor costs associate with these sorts of additions to your workflow? Why, the same way you do everything else of course. Resource planning and logistics shouldn’t be a new tenet for your business, and these new additions should slot alongside them with ease. If they don’t, you need to evaluate the tools that you’re using to manage these systems in the first place.

Schedules for field employees aren’t the same, obviously, as in-store staff, and it’ll be up to you to decide if these two (or more) roles warrant different types of talent to inhabit those roles. If so, they should sit side-by-side on a time sheet, with similar expectations, appropriately divergent goals, and compensation commensurate with skill and out-of-pocket expenses (if any). If your in-house staff can also manage your field operations, can you hybridize their day, allocating some time to in-store work, and some time to field work? How can you make this equitable? How can you conform to labor laws? Good software and mobile oversight will help you.

On-site points-of-sale

As a retail employee, my job was never to ring out customers, bag items, deliver exceptional customer service, or show customers where a product was. My job was the up-sell. At Gamestop, I was hawking preorders and magazine subscriptions. When I worked for Apple, it was their various service programs, whether it be AppleCare, which still exists, or MobileMe and One to One, neither of which exist any longer. Checkout can be managed by a mobile phone, or, if you’re Amazon, an elaborate system of motion-sensor cameras. The value of a retail employee is how much additional money and loyalty they can bring into the organization. This doesn’t stop when they step off your property (assuming they’re still on the clock, of course).

Setting field sales goals that are realistic and respectful is a key to making field operations viable for any business, but certainly for retail. For that reason, field workers need to have point-of-sale access on mobile devices—this should include full inventory, the ability to allocate inventory, remit payment, and schedule follow-ups for delivery if appropriate. This sort of connection to backoffice processes is the bare minimum of successful field operations. Your field workers can’t waste your customer’s time calling to check on inventory or whether or not you can get something. They need it at their fingertips.

Where does all this tech live?

There are basically three ways that point-of-sale, navigation, and appointment management (and the dozens of other things you might need in the field) can be put into the hands of field technicians: Proprietary devices, company-supplied consumer mobile devices, and employee-provided devices (BYOD). Is there a right or wrong way to do any of these things? Probably not, but it’s important to think about what works best for your purposes.

If you’re bought into a proprietary point-of-sale system, a proprietary device might seem like the best option, but obviously if you’re running service-oriented applications on the device, they need to be compatible—and natively compatible—or the system loses any value. What’s the point in deploying a mobile version of a proprietary technology if it can’t do what you need the mobile solution to do in the first place.

We’re at a point where, from a mobility perspective, consumer devices typically fit the bill just fine. Whether you own the devices centrally or you rely on employee devices typically comes down to the economics. The value of centrally managing devices is that you can have a few phones or tablets that are picked up and returned centrally, and you can control the operating system, applications, and what apps the device actually has on it. With BYOD, there are mobile device management overlays that can help regulate company-owned applications, but you’re still treading in difficult waters if you’re messing with an end user’s property.

In the end, the technology is a means to an end, and while field operations might not be the defining facet of retail, for many businesses, it could be exactly what sets them apart and keeps them viable.

Lilja Scheel Birgisdóttir, Reliability Engineer at Icelandair, talks with Sarah about the immense complexities and interdependencies of airline operations and the role predictive maintenance will play in the airline’s future.

Sarah: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we're going to be talking with Icelandair about their exploration of predictive maintenance. This is a conversation that I think you'll find quite interesting. Because when you talk about service complexity, I don't know that there is a more complex environment than the airline industry. I'm excited to welcome Lilja, from Icelandair, to talk with us today. And Lilja, I'm going to let you introduce yourself fully, because I know that I would not properly pronounce your last name. So, please tell everyone about yourself.

Lilja: So hello. I'm Lilja Scheel Birgisdóttir. So, we are from the airline, Icelandair. I have my team with me. We are a team of reliability engineers. We consist of three. And it's Harpa Rún Garðarsdóttir and Unnar Már Sveinbjarnarson. And then, we have our IT specialist with us who is Bjarki Elíasson. So, if I just introduce Icelandair briefly, it's an airline that has celebrated over 80 years, birthday, if you can say that. So, we track our history back to 1937. So it's only 34 years after the Wright brothers took off, we took off, not in the form that we are today. It has a longer history of mergers, but we've been flying under the name of Icelandair since 1973. So, not many airlines that can say that, especially when we're just a tiny airline flying from a tiny island in the middle of the ocean.

Lilja: We have a specific business model which has been very successful. It's called the Via. I'm not sure on the pronunciation, but Via market because we fly from Europe to the US, and we offer the great deal of free stopover in Iceland for up to seven days, which is kind of intriguing for many people, and at no extra cost. So this is a unique model that not many can replicate based on our geological position. What is kind of unique about us, I would say, but maybe the global market does not know, is that we have what could be explained as the heart of Iceland there, or heart of Iceland. And we have felt it very strongly, especially in the 2010 and '11 volcanic eruptions, from the very well-known volcano, Eyjafjallajökull, which every reporter struggled with pronouncing the name of back then.

Lilja: But throughout this Corona situation, we have felt it, again, beating strongly when our day-to-day work changed a lot overnight. And we have had to say goodbye to over 2000 fellow colleagues. So, it's been a hard time. But again, we have been feeling this strong unity. And amazingly, Icelandair is so well liked, and by the Icelandic nation as well. So many of them, they experienced their home when they step on board of our aircraft on their way home. So, they feel the Iceland spirit and the Icelandair spirit. So, that's a little bit about our company, who we are. If you want to know, understand, what we do as reliability engineers? So, what we do is collect and monitor technical data, so that we can evaluate how well our planes are doing. We monitor technical dispatch reliability, or/and... So, we're monitoring basically the health of our fleet. And if we are seeing any off trends, we notify someone who can take action on those. So, that's a little bit about us.

Sarah: Excellent. Well, thank you, Lilja. I have heard of the via structure. And it is very compelling. I have not had an opportunity to visit Iceland, but would love to. So, once travel picks back up, I will put that on my list. And I know that-

Lilja: You should.

Sarah: I know that for everyone in the airline industry, 2020 has been a very, very difficult year. So, certainly appreciate that. And I think most of the conversation we'll have today is not necessarily talking about business as it's been recently, which is uniquely difficult in a lot of industries really, but talking about the complexities in the airline operation and for Iceland in a more normal state of business, which I think is what most folks intuitively think about when they think of flying, because a lot of people are used to also being able to travel far more than we have over the last year.

Sarah: Well, thank you for the background. So, what I do want to talk about next is some of that complexity. So, we had a call to kind of set the stage for this recording. And I had shared with you all that I've never really thought about the weight of complexity on an airline. I guess I should have. But I just really have only thought about it through the lens of a passenger or a consumer, and not necessarily all of the different aspects of complexity. Some, I think, are intuitive because they're more of the customer facing things that you would notice or experience. But there's far more to it. So, I want to just talk about some of the different facets of complexity that makes managing and optimizing an airline operation quite, quite challenging. So, to start, let's talk a little bit about... The first area is customer expectations, right? So, maybe talk about that one first?

Lilja: I mean, as a customer, you want good service. You want reliability. You know, you want to be there alive and on time, basically. I mean... and smooth and enjoyable travel experience.

Sarah: Yes.

Lilja: And that's where on-time performance is a critical thing. But, I mean, it's the same for every airline. It's the same expectation. We have the same customer group, basically. So, I mean, that's the main thing.

Sarah: And it's the most intuitive and easy to understand, right?

Lilja: Yes.

Sarah: Because the vast majority of us have been on a flight that ends up delayed or canceled. And then, you... So, that frustration of the interruption to your life, and your schedule, and all of that is... It's the easiest to comprehend in terms of the complexity. But let's talk about... Then, when there is a disruption, obviously it impacts the customer experience. But talk a little bit about what happens... It's really a chain reaction, so there's a huge trickle-down effect of one issue throughout the system. So, what are some of the things that happen or areas of impact once you have some sort of issue, or failure, or downtime?

Lilja: I mean, what's happening is there are a few cases that can take place. I mean, you can have one part that is faulty, and the... In the cockpit, they see a light, and they just... They know they can't take off. It can be that it's late from another flight. It can be that it's late from a maintenance. So there are few things that can happen that causes a delay, or an AOG situation, aircraft on ground. I mean, in the case of we have a faulty part and they have the light than the cockpit, we're seeing 15 minute delay, and up to a few hours. This can lead to an AOG, where your flight is delayed, canceled, whatever. And sometimes, we can resolve it right on time, especially if the aircraft is in their home base. It's easier. If the situation occurs at an out base, it's a bit more cumbersome.

Lilja: And, I mean, for the customer, it can lead to missed flight, missed train. They have to book a new hotel. There's so many things that can... the trickle-down effect. So, I mean, if you have an AOG situation that's a longer time. The aircraft cannot take off. It can... You might end up where you have to get a new aircraft to pick up the passengers. So, then that's lost revenue when you have to fly a new aircraft empty to pick up all the passengers, and then fly the broken aircraft when it's been repaired. So, I mean, this is... There are many things we need to consider when this happens.

Sarah: Right. And the other thing is, if you think about the kind of interdependencies of air travel, right? Like you can't... When you have a delay, or you have an AOG situation... Now, I sound like I know what I'm talking about. Then, you can't just, "Oh, okay. Well, we have it fixed. So, let's just take off." Right? I mean, you're reliant upon all of the other travel happening in the air, all of the other... the air traffic. You're relying on a lot of different things. And so, to your point, there's an issue when it comes to customer satisfaction. So, how frustrated are your customers getting in those situations? But there's also a very real issue of cost complexity. Right? So, to your point, I've been in situations before, if it's extreme enough, where a flight's canceled or what have you, you end up getting some sort of compensation from the airline. So, you have that cost.

Sarah: You have the cost of flying empty planes, and all of those things. So, it becomes quite intense, in terms of the impact of that. And I think you also can't under emphasize the criticality of the number one objective, which is keeping everyone safe. Right?

Lilja: Exactly.

Sarah: So, I always think about... I've been in... Anyone that's been in a situation where a flight is significantly delayed or canceled understands how frustrating it is. But I always find myself annoyed with people that throw a temper tantrum about it. And yes, it's frustrating. But the number one thing is you don't want someone to take off in an airplane that they know they shouldn't, or something isn't properly taken care of.

Sarah: So, it's always like... Yes, I know it's frustrating, but they're acting in our best interest, even though it's inconvenient. Right? So... Anyway. But the other thing is... that I had never really thought about prior to our conversation is some of the complexity that exists in being able to rectify issues, or make necessary repairs, to be able to move along. And so, talk a little bit about... I guess I just never thought about the fact that, if you have an aircraft in some location, you can't just have any mechanic come and do a fix. You don't know if you'll have the part you need. So, talk about some of the complexities when it comes to the regulatory side, and some of the inventory, and those sorts of things.

Lilja: Yeah. I mean, we have a lot of regulatory bodies. We have FAA. We have EASE. And they have different regulations. And Icelandair, flying in both regulatory bodies, we need to abide to both. So, then we of course have the... from Boeing, everything we have to just obliged from there. So, everything is highly regulated. And you wouldn't believe the paperwork that goes with one aircraft. I mean, it's tons of paper.

Lilja: So, everything that's done has to be written down, signed off. And the person that's signing it off, as you said, has to have the permission to do so. So, the person has to be trained and licensed to do this thing. Even though you're an aircraft mechanic, you're not necessarily have the license to work on avionics, so the computers on board. So, if something comes up, you need to be sure that the person has the specific certification before they can come aboard and do the work. So...

Lilja: And the parts that we have, even though we have two 757s, Boeing, standing side by side, doesn't necessarily mean that we can use the same parts in both, because they have different specs, they have different modifications. So, they are... We might need two different parts, even though the same one failed. And these parts aren't just laying around in every stock room. We might have a AOG situation in Boston, but the part is available in Europe. And you have to transfer the parts. And you need to make sure that the part is certified properly, with the paper work that we require, with the mud status that this aircraft requires. So, there's so many things that need to align when something comes up.

Sarah: Yes. Ooh, it's not a job... I don't think I would want... I don't think I would want it. It's a lot of pressure. So obviously, you have to handle those situations when they arise. But the more you can avoid them through both traditional maintenance and what we'll talk about in a bit, predictive maintenance, the better off we are. So, the ultimate goal is to minimize and eliminate as much as possible, any sort of issues.

Lilja: But I must add that. I mean, it takes a lot of people to cover these things. So, it's not only one man job, thankfully.

Sarah: Yes, yes.

Lilja: As you say, you would not want this job. You're only getting a tiny part of the whole scenario.

Sarah: Right. Right. I don't... I just don't... I don't know that I would want... I just don't know that the airline thing would be for me. I don't know. I get anxious as a flyer, let alone being responsible for all of that. But it isn't... It is... over... holistically, not just yourself, but everyone in the industry. It's an important job.

Lilja: It is.

Sarah: Like I said, I mean, it's... People's lives are in your hands every day. And when you look at some of the industries where... You talk about mission critical situations. And sometimes, people refer to that term in terms of downtime costs money. And yes, that's important. But when there are situations like with this, or in certain medical applications and things like that, where it's lives, number one, I mean, you're talking just about a different level of importance of, of everything working, and of managing and optimizing, and paying close attention, and, and all of that. So, a lot of respect for what you're doing.

Lilja: Thank you.

Sarah: So, let's talk a little bit about the kind of historical and present-day maintenance world for Iceland. So, you use IFS Maintenix to manage the planning and orchestration of all of the maintenance of the aircraft. So, tell us a little bit about how that works, and the value that IFS has contributed to Icelandair's operations.

Lilja: Yeah. So, we've been using Maintenix from IFS since 2014. We started the implementation in 2013, so... Wow. Eight years almost? That's crazy. Yeah. We use Maintenix to keep the aircraft everywhere. They keep track of all our scheduled maintenance activities, planning actions, and... Yeah. So, it's covering most of the processes that we do.

Sarah: So, you have Maintenix in place to manage the maintenance operations. But you're obviously continually looking for ways to minimize and eliminate any sort of delays and AOG situations. So, this is sort of the thought process behind investigating predictive maintenance for critical parts on the aircraft. So, tell us a little bit about how you view predictive maintenance potentially helping Icelandair.

Lilja: So, if we get a tool that can predict maintenance, we can improve our whole planning overview. We can start ordering parts beforehand, so cost saving. We can plan the maintenance action before it happens, before we get an technical delay or AOG. So again, we're saving costs and we're increasing our on-time performance. And, I mean, we could start... We could send the aircraft with the parts that we know is about to fail, so that it can be replaced wherever the aircraft is. So, I mean, we could take... I'm not saying that, that's an ideal thing to do. But we could know beforehand what we can do, when we can do it, and how we should do it. So, it would give us so much more insight and preparation time than we have today. So, in the long run, we would get shorter technical delays, reduce AOG situations, and reduced problems when we need to order parts that possibly is in somewhere in Europe, or America, when we need it in Iceland. So, there are so many things that... predicting the need before it happens.

Sarah: Okay. Tell me how this works on... You have an older Boeing fleet. Right? So, how do you determine what components you want to use predictive analytics with? How do you sort of put that in motion with the fleet that you have?

Lilja: Let's say there are certain part groups that we know that we don't need to monitor, because they're just you use and replace, so fully excluding those. So, we are looking at multiple part groups and part types. In terms of an older fleet... I mean, we know that our 757s are kind of old. The bad thing there is that they don't have as many sensors as the types that are coming out today. So definitely, that does not help us in the predictability. But with the coming fleets, we have a few max, 737 max. So, they have more sensors. So, we know we're going to get more data there. But then again, it's also just mathematics and statistics. So, we know that the models that they make in such a system are using historical trends.

Lilja: So, that helps us. Even though the 757s do not have sensors to assist with the predicting, we know that we have statistical data with us. So, that's going to help. And it's not impossible. So definitely, there is some future there. And it's so much fun to be in this place because, all of a sudden, we're taking part of the future happening.

Sarah: Yes.

Lilja: When we see... We're taking the step into predictive maintenance. It hasn't been as much viability before as it is today and tomorrow.

Sarah: And why do you think that is? Why do you think predictive maintenance is more viable today and tomorrow than it has been for Iceland air historically?

Lilja: I mean, the technical advancement has just been so great in the past years. Computers are getting more powerful. I think also, because of how highly airlines and maintenance is regulated, it's not been so much in the computers. I mean, every work that we do... Some airlines do have what's called e-signature, where the sign off on the papers are online, if you can say that. We do not. We have not implemented that yet. So, I mean, getting the data into the computers is just happening today. And it's really slow process because it has to fulfill all those rules, regulations. We have the CAAs that have to approve everything. So, it's a slow process.

Sarah: You wouldn't want to be an early adopter in the situation you're in. You need something that is more proven, and has... I can understand that. So...

Lilja: At least you have to have a lot of money if you want to be the first one.

Sarah: Yeah. That makes sense. Okay. So, you have a proof of concept around predictive maintenance in place with IFS to explore this more. Tell us about the project and its intended objectives.

Lilja: So, the basic goal is just to build a view which displays some fancy graphs and information tables. So, that's the thing. It's going to be... As we've stated, it's going to be so useful for us to be able to see the predictions down to the serial number of the components. If that part is expected to fail within a certain time, this information would then be fed to our planning team or the maintenance control for further action. This seems very simple when I say it like this. But the calculations behind the predictability, the model training, is... Those things are fairly complicated to do. And it has to be good data that is fed in. So, that's also a very critical factor. So... But the goal for us is to be able to predict a component failing before its time.

Sarah: Okay, you touched on this a little bit, but I want to dig into some of the ways that this really benefits Icelandair and its customers if it works well. So, if you are able to successfully migrate to this predictive model, it... To me, it gives you better control, and it gives you more time to react, and it takes a lot of the uncertainty out of the situation. Right? So rather than, you have a flight land in Boston and someone calls and says, "Hey, uh-oh. This light is on. This part, it has an issue. And that part is in Iceland, or that part is in Europe. And you don't have the right person there to fix it. And you need to..." You know? So, there's all this time then that passes to align the right situation to fix it, and then comply with the air traffic and everything to get the flight back in the air.

Sarah: So, if you knew, to your point, "Okay. Well, this part is nearing end of life," or "We know that there's going to be an issue," you can orchestrate a repair before that failure occurs, or at least put yourself in a position where you have the appropriate resources where they need to be. So, you're more able to precisely align resources when, or even before, failures or issues occur. So, talk a little bit about that. So, you can... The different components you're... And you're focusing on tracking components that are more of those critical components, so things that would ground a plane, not the things that you have, like you said... I can't remember the term you used, but like a use and replace, that are more readily available. Right? You're talking about the things that would take time to fix. So, with the predictive model, you would have the visibility into when and where things will be occurring so that you can align the resources to those situations. Right?

Lilja: If something comes up for parts that are flight critical, you cannot fly. But if it's not a critical part, you can... I'm not completely familiar with the process, but you can ask for an extension of life, so that... I mean, you can get permission to wait for two weeks or fly the airplane home. So, there are processes there. But these are the components that will ground the aircraft. And knowing beforehand if these components are going to fail... Yeah, we're going to reduce costs. We're going to reduce problems and unpredictability. It's going to be great with failure prediction

Sarah: And you're also obviously improving the customer experience. Right? I mean, anytime you're able to minimize or eliminate a delay or a grounded flight, you're improving that as well. Talk a little bit about how the data could be leveraged over time to analyze patterns that could help Icelandair, so looking at patterns of faults and failures and how you could use that information within the organization to make changes.

Lilja: That's basically the goal of the reliability engineer. That's to identify trends and patterns, and try to see why they're happening. And we have always, what's called a reliability meeting where there's a reliability control board that meets. And we inform them of everything that's happening, trends, and things that we are seeing, the things that we have seen. And then, this boards, which persists of... I'm not very good with stature... status names, but like all the people that are required. We have pilots. We have mechanics. And everyone that's needs to know about the things and have something to do with it, they come there. So, it's a joint board where we can discuss these things. They can decide on future steps, or like the board can decide on future steps what needs to be done.

Sarah: So, over time, you can use the data that you're gathering in the predictive maintenance program. And if I'm understanding correctly, it also... The more data it gathers, the more it learns. Right? And the more accurately it can predict.

Lilja: Yeah. That's how the predictive maintenance system will work. It's a learning process.

Sarah: So, you can use this to look at different ways to make changes within the business to, again, just kind of operate more effectively because you have that far improved visibility. Right?

Lilja: Yep.

Sarah: Now, what about external implications? Once you have data that maybe shows you things that they... Let's say you... I'm just making this up. But let's say you have some part that you're noticing is continually failing prematurely, or you notice that there's an issue. Are you also able to take that data and leverage it with your external partners to make improvements out... kind of outside of the business?

Lilja: Yeah. When we see such a trend, we often look at which repair shop has been servicing the parts. And if it's just this part, sometimes we just have an odd one out. And then we just take it out of operation. We don't want to see it anymore because it's unreliable. It's costing us a lot. So, if it's just a single part, we can just throw it out. We just scrap it. But sometimes, we see it with the same part number. They're keep failing again, and again, and again, before it should. Then, often we look at the vendors to see if maybe they are not doing their work properly. Is it always... Are they all coming from the same vendor, or multiple vendors? So yes, this information will help us also to identify those. And this is a lot of costs that's... Parts cost a lot. A repair costs a lot. Everything in the airline industry costs a lot, except for the airline tickets.

Sarah: Right. So, there's significant opportunity to optimize and save. And it's interesting. There's a lot of potential value here in terms of you have sort of the customer facing benefits. You have the benefits for Icelandair, in terms of more visibility, better ability to align resources, cost savings, and all of those things. And then you have the ability to leverage the data externally, where it's relevant to improve some of the vendor and partner relationships, and give them feedback as well if you're able to pick up on those trends. It's really interesting Lilja. And I think that... I understand your point about why, in the airline industry and for Iceland in particular, you want to move pragmatically. You want to take your time and do this the right way. But our platform talks across industries. And this move to predictive is a huge, huge trend.

Sarah: And I think, to your point, in the last few years, the technology has just become so much more accurate and more accessible to people for a variety of different reasons. And it's exciting to see it sort of come to fruition in different industries, in different use cases, because it is really powerful. And the way that it will change how Iceland operates and how different businesses operate is really exciting. So, I appreciate you coming and sharing. And I'd love to have you back in a bit, when you are further along in the proof of concept, and talk about some of the things you've found, and some of the ways you're using the data and putting it to work, and kind of talk about the progress. I think that would be really cool.

Lilja: Yeah, definitely.

Sarah: Well, thank you so much for your time. I appreciate it. And thank you for sharing.

Lilja: Thank you.

Sarah: You can learn more about predictive capabilities and other trends by visiting us at futureoffieldservice.com. You can also visit us on LinkedIn, as well as Twitter, @TheFutureOfFS. The future of field service podcast is published in partnership with IFS. You can learn more about IFS service management by visiting us at www.ifs.com. As always, thanks for listening.

By Sarah Nicastro, Creator, Future of Field Service

Customer experience has become a critical topic for every company I interview – even in industries that haven’t traditionally prioritized CX as heavily as others (like utilities, for example). Companies have learned that, ultimately, CX is what drives revenue and creates brand loyalty. Looking at some of that statistics shared in this recent article, the emphasis on CX by companies in our audience is well supported. For example:

81% of marketers expect to compete mostly (or entirely) based on CX (Gartner)
$1.6Tis lost every year in the U.S. because of poor customer service (Accenture Strategy)
74%of consumers are at least somewhat likely to buy based on experiences alone (Forbes / Arm Treasure Data)
$98B/yearis left on the table by companies who fail to provide “simple” experiences to their consumers (Siegel+Gale)

So, what constitutes a good customer experience? I suppose the weight of different criteria vary person to person, but some table-stakes expectations are control (self-service), ease and quality of communication (omni-channel support, proactive information), visibility (insight), efficiency (first-time fix, on-time delivery, knowledgeable employees, etc.), and effective problem resolution. We’ve talked a lot in recent years about the imperative role service plays in CX, and how it is often times the most frequent (sometimes only) face of the brand to customers. As such, equipping employees with the information, knowledge, and assets they need to delivery a positive CX has become top priority for today’s service organizations.

Technology plays a key role in delivering a cohesive and satisfactory CX. Money, time, and effort are being invested to consolidate systems and reengineer processes to achieve this cohesiveness and keep pace with the type of CX provided by consumer-facing brands like Amazon. Disparate tools and siloed data must be brought together so that the customer journey isn’t fragmented, and the service workforce must be equipped with the information, skills, and resources to deliver the experience you want to be associated with your company’s brand. It’s not an easy feat, but it’s an important one – and we’ve featured many success stories of companies getting it right.

My Real-World CX Woes

Perhaps that’s why a recent experience has frustrated me so much. We just finished remodeling a family room in our basement. In December, we ordered a sectional sofa from Joybird to finish off the space. For those not familiar, Joybird is a trade name of Stitch Industries, Inc. which was acquired by La-Z-Boy in July of 2018. Joybird specializes in e-commerce of custom-made furniture with very limited showroom locations in New York, Washington D.C., and Chicago. I’d seen Joybird pieces pop up on Instagram in beautiful colors and interesting textures that received rave reviews and was excited to make the purchase.

The online selection and ordering process was modern and user-friendly, including the ability to order free swatches of their many fabrics to evaluate in person before ordering. You can custom design your piece from the Joybird website and, for those looking for financing, that option is easily integrated into the purchasing process. Because I am incredibly impatient, I actually placed an order before receiving the fabric swatches and realized when they arrived that I much preferred a different option – so I called customer service to inquire about making the change, and they were friendly and accommodating. I was impressed with the ordering process all around.

Once we updated our order to the preferred fabric, we received an order update email confirmation and estimated delivery date (January 21^st) along with a “follow your build” email which enables you to check in on the manufacturing of your product for updates from beginning to end. The experience thus far was very in line with what I’d expect from the brand’s fresh and modern persona.

On January 11^th, we received an email explaining that the sofa build was complete and that the next phase would be for the sofa to go to a transit hub, where it could sit for up to a week to synergize shipping with other local purchases. The estimated delivery date remained January 21^st, but January 21^st came and went with no word on delivery or further email updates. On January 22^nd, I called Joybird customer service to inquire about our order status – you can’t reach someone directly but have to leave a message for a call back, which I understand is likely due to work-from-home circumstances of COVID. When the representative called back, I was told only that Joybird does not have visibility into any order status once the sofa has shipped and that we must await contact from the third-party delivery provider. I was assured this would happen by January 28^th.

Then January 28^th came and went with no sofa, no contact by the delivery company, and no updates. I called again January 29^th and was told the exact same thing I’d been told the previous week. Third time is a charm, right? Wrong. Another week and no sofa, no contact, no updates. This time when I call, now into February, I press harder because – let’s be honest – this lack of communication and lack of visibility really isn’t acceptable. I am told that the sofa is en route to last-mile logistics provider J.B. Hunt for delivery. On my own, I find the number to contact J.B. Hunt to inquire about location and status of delivery and I’m told they have our order information but have not yet received the sofa – the representative is hopeful it was on the order received end of last week and just hasn’t been scanned in yet, so I remain hopeful the sofa will finally arrive this week.

Fragmentation, Lack of Visibility Are Entirely Avoidable with Today’s Technologies

Reliance on third-party logistics providers is quite common, and I’ve never had such issues with getting insight into the status of an order. Companies I talk with that use third-party providers know the importance of leveraging both technology and training to ensure the use of a third-party doesn’t negatively impact the customer experience. The contrast of the customer experience of the Joybird sales process versus its service process is honestly shocking to me – the initial phase was so strong that my expectation for a cohesive, positive experience was set. The sofa we eventually receive may very well be phenomenal, but at this point, the impression I have of the company overall is quite poor based on my service experience (or lack thereof). The reality is, with the technology available to companies to offer a more cohesive customer experience and to have (and maintain) real-time visibility into its inventory from order all the way through to delivery, this level of disconnect and fragmentation feels simply unacceptable. This is a real-world example of the type of customer experience that ruins a brand’s perception and reputation, and the thing that gets me most is how entirely unavoidable this is.

I have a local acquaintance who recently received a beautiful, emerald green Joybird sofa – I reached out to her to inquire about her experience, and it very much mirrored ours. She said, “the sofa is absolutely beautiful and wonderfully made, but I will likely never order from them again based on the overall experience.” My point in writing this article isn’t to blast Joybird, but to use this very real-world example to illustrate the absolute criticality of asset visibility, connectedness, and a cohesive customer experience – especially when relying on a third-party delivery provider.

By Tom Paquin

This is part of an ongoing series on the state and standards of service management software in 2020. Here are the previous articles in the series:

In our last “Back to Basics” piece, we discussed “Servitization”, which has become the buzzword of choice in recent years among manufacturing and adjacent industries. As we barrel headfirst into an increasingly service-oriented economy, rethinking customer-centric business models around services rather than products has been a priority for many businesses.

Outcomes-based service takes that premise and extends it across all businesses that offer service functions. For many businesses, getting servitization right in the first place means focusing it on outcomes-based functions. But even businesses with well-established service functions have seen the benefits of outcomes-based service models.

So: What is Outcomes-Based Service?

Outcomes-based service is the act of restructuring service contracts to focus on desired and provable outcomes, rather than warranty, maintenance, and break-fix.

Imagine, for instance, that when you bought a new computer, you were guaranteed five years’ maximum efficiency. Perhaps that requires an upgrade after year two, new RAM or a new video card, or perhaps that requires something be repaired. All of that is baked into the price of the outcomes-based contract. This also ensures that all service emanates from the OEM. And it builds customer loyalty and ensures that when a new machine is purchased, that it’s purchased, used, and enjoyed for half a decade.

Different businesses will engineer outcomes differently for their customers, of course, focusing on some big areas. A recent study saw companies focusing out outcomes in the following areas, ordered by prevalence, from top to bottom:

Performance metrics
Asset uptime
Time-to-service
Fail rates

Obviously, for many businesses, this is a huge shift not just in go-to-market, but in how service is tracked, managed, and optimized across businesses. That’s where employing best-in-class service, asset, and project management software becomes even more important to the bottom line, and to your relationship with your clients.

We’ve explored a lot of instances of best-in-class outcomes-based service over the course of the last few years here at The Future of Field Service. Here are a few interesting stories and articles to help you see what outcomes-based service looks like in practice.

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