joanna.darby@ifsworld.com, Author at Future of Field Service

By Sarah Nicastro, Creator, Future of Field Service

I think it’s safe to say manufacturers have recognized the need to embrace Servitization, but the race is on to see which companies can successfully transition their operations from product-focused to service-focused. Panasonic Appliances Air-Conditioning Europe is ready to lead the charge and has a strategy in place to do so. Karl Lowe, Head of European Service at Panasonic Appliances Air-Conditioning Europe, recently joined the company with the remit of leading the organization on its journey to Servitization.

“There’s been a recognition within Panasonic Heating & Cooling Solutions that we need to adopt more of a service mindset,” explains Karl. “The remit I’ve been given is to develop the maturity of our service organization.” Karl explains that, like many product manufacturers, historically service has been viewed within the organization in more of the technical sense. His goal is to broaden that thinking and begin work on getting the company’s service to be perceived as world-class in the way that its diverse portfolio of commercial and residential HVAC products are.

Karl explains that the process is complex because Panasonic Heating & Cooling Solutions operates in so many countries and regions and those operations have been conducted very independently until now. “We have this kind of silo mentality because each country works independently,” he notes. “But what we're trying to do with service is offer top-down governance in the way that we work operationally, how we work from a service sales point of view and how we work technologically. We don't want to take away the independence or the free thinking of our National Sales Companies (NSCs), but we do want to move away from each country doing it in their own way. We believe that offering common approaches and processes will really help our organization.”

Panasonic’s 3 Step Service Transformation

Karl’s first objective was to get a wholistic view of the status of service operations across the organization. He conducted a business maturity assessment to gain a greater understanding of the service business starting point within Panasonic Heating & Cooling Solutions.

With the baseline understood and set, Karl developed a three-step strategy to help Panasonic progress through the maturity model. “The first part of that plan is the operational side of our business,” says Karl. “This means using common tools, using similar processes and similar reporting so that we can start to work in a similar kind of way. And it's a little bit like if you were to drive your car into a showroom, if you go into Germany, if you go into the U.K., if you go into France, it's a similar feel, it's a similar approach. You should probably expect a similar kind of service. And that's really what we're trying to achieve within Panasonic Heating & Cooling Solutions, so that the customer that's in need of our assistance, whether they're in Italy, whether they're in the Czech Republic, whether they're in Spain or in Norway, it really doesn't matter – they should receive consistency.”

As a part of its operational transformation to mature service, Panasonic enlisted the support of IFS Remote Assistance, a collaborative merged reality software that blends two real-time video streams into an interactive environment. “IFS is important in this first phase of our strategy because it, for the first time, offers us a unification of the same way of working,” Karl notes. “We all have to use IFS. So, we will have to work in the same way in the way that we give the customer support, which is obviously to a high standard, and that is our goal.”

Remote Assistance Sets the Stage for Service Success

Panasonic Heating & Cooling Solutions has been piloting IFS Remote Assistance in its U.K. and Germany NSCs. “The feedback has been overwhelmingly positive,” describes Karl. “So much so that interest in the technology has spread throughout Panasonic.” During the pilot, Panasonic has found that in addition to driving service consistency, there are several other benefits the company will gain from IFS Remote Assistance.

“Another valuable aspect of using IFS Remote Assistance is how it enables us to capture and transfer knowledge to protect ourselves from losing technical insights and to educate and upskill across our workforce,” Karl explains. The solution allows Panasonic to record each session and if the company notices similarities occurring, it can initiate training to alleviate common issues. Remote Assistance can also be used for collaboration among workers – the visual aspect of the technology and being able to see what the other person sees means that resolution is far greater than support via a phone call.

Panasonic Heating & Cooling Solutions expects that by standardizing its service operations on IFS Remote Assistance the company will improve response times, increase remote diagnostics and resolution, reduce on-site visits and save costs, improve speed of repair, and achieve higher customer satisfaction by reducing customer friction.

An example is how IFS Remote Assistance will replace a third-party triage service previously used in the U.K. So, customers would call, be connected to third-party triage who then would relay the information to Panasonic, and they’d await a reply. Now, service sessions can be initiated immediately with IFS Remote Assistance to determine what the issue is and whether it requires a physical site intervention by one of our service engineers. “We need to speed our repairs, and with IFS deployed we expect to accomplish that goal,” notes Karl.

Once deployment of IFS Remote Assistance is complete and operational processes have been polished, Panasonic Heating & Cooling Solutions will move on to phases two and three of its strategy. Phase two is to examine the company’s service sales structure. “This is where we’ll look at how we sell service,” Karl explains. “And this is probably the most challenging part. We want customers to see us as a solution to their problems rather than a company they buy products from. We need to examine what offerings are appealing to our customer base and how we can develop those into subscription-based contracts. We want to deliver outcomes – for them to trust us to look after their products and make sure they are always operating optimally. It's always running. It's always being monitored. If there's a problem, we turn up, we fix it. We go away, peace of mind solutions in that way. And I think that's very much the way the industry is going. If you look at hotels, hospitals, retail, restaurants, warehouses, industries, offices, and many other applications they want to get on with doing what they do best – they don't want to worry about HVAC equipment. That's our job and we need to determine how to best meet that need.”

The third and final phase is to examine the service engineering side of things. “Lastly, we’ll look at optimizing how we work in the field from an engineering standpoint and determine how can we provide feedback from the field and from our customers back to R&D to aid in the development of new products and solutions.”

Panasonic Heating & Cooling Solutions has the recipe for Servitization success: the vision, the strategy, and solid foundational technology to build upon. “The expectation if you’re buying a premium product is that you get premium service,” says Karl. “Our ultimate goal is to maximize customer retention, and to do that we need to mature and innovate in how we provide service to our customers. This is a new approach, a new beginning for Panasonic and I’m excited for the journey.”

By Tom Paquin

Given the avalanche of video streaming platforms that we’ve been pelted with over the last few years, you’d be forgiven if you missed the fact that NBCUniversal just launched their own: Peacock. This is in no way particularly remarkable, interesting, or, I’d argue, good, but there’s a somewhat interesting component here, and that’s what will happen to The Office next year.

I should note here for our international readers I am talking about the Greg Daniels-helmed Office, which of course is an Americanized version of the (moderately superior) Ricky Gervais and Stephen Merchant-helmed UK Office, which was adapted and exported to a variety of different countries, including the US.

So why am I talking about The Office on this Field Service site? Because of Netflix. It’s widely known that The Office is the most-streamed series on the video platform, so when NBC made it clear that they planned to terminate their contract with Netflix and bring The Office to their own streaming platform, it created a pretty big stir.

The logic was, naturally, because The Office was the top streaming program on Netflix, that NBCUniversal could carry a percentage of Netflix viewers to their platform by moving the show there. The audience would follow the show. They were so certain of this that they bet $100 million a year in lost revenue on it. Netflix clearly bought this as well, and persevered to create a homegrown Office by dumping a massive sum of money at the feet of Greg Daniels and Office Star Steve Carell to create whatever show they wanted for the streaming giant. The result of that massive investment was a show called Space Force, and it’s fine.

Here’s the thing: It’s very likely that both Netflix and NBC have both made very foolish mistakes.

As someone who has a lovely spouse who turns on The Office while she is staring at her phone or answering work emails, I would postulate that The Office is the most-streamed show on Netflix for the following reasons:

There are a lot of episodes.
You can pay very passive attention to it and still enjoy it.
It’s there.

Sure, The Office is enjoyable, but were it not on Netflix, we would find something else that met those three criteria rather than leapfrog to yet another streaming app. Sorry NBC, I don’t care that you’re free, there’s a Netflix button right on my remote and I can re-watch the Great British Bake-off every day for the rest of my life. And if that were to be removed, we’d find something else.

So here we are, 400 words into this article, and what does this have to do with Field Service? Well, I think the gross miscalculation that both Netflix and NBC have made is just as likely to happen with service data, and it might be happening to you, right now.

Here’s an example: You see uncommonly frequent stock-outs on a specific service part in your warehouse. Binary thinking would imply that the part is used with some frequency, which would mean that either assets that use that part are more faulty than others, or the part itself is poorly engineered. So you spend time and money redesigning the asset and the part only to discover that because the parts are extremely small that technicians have an unnecessarily high volume of them on their truck.

This is a single example but it speaks to a broader challenge with a fairly anodyne solution. I’d say that there are three things that businesses can do to better contextualize their data:

Data Analysts Need to Understand Service
This is going to seem profoundly stupid but if you’re reviewing data about service, you need to actually understand every aspect of the service delivery lifecycle. For enterprise-sized businesses with data analysts, many of whom are fresh out of college, dipping their toes into the data lake will provide them a wealth of information to misinterpret.

There’s no silver bullet here. At large companies and especially at diversified companies making sure your CTO “gets” service is not always going to be in the top two thousand priorities. For that reason, it’s important to diversify the audience for your data. By putting raw data with some small context in front of, say, your operations lead, or even a front-line worker, you can have a much more informed interpretation.

Diversify your Data Sources
This is not new territory for us, but the more data sources available to you, the more accurate a picture you’ll have of your business. Combine parts information with broader logistics trends with actual service data, sprinkle on some asset management, and perhaps a few ERP functions, and you have a much better picture of your business than if you were simply looking at a single axis. This feeds into the previous point, obviously—get the right people to connect the data dots to build the picture for your business.

Audit, Audit, Audit
I realize that this is hard, especially as we wade in the uncertain waters of COIVD-19. Do we ever really have time to stop and evaluate the legitimacy of our data? I would argue that it is imperative, and it’s a key way to evaluate and contextualize your data in a meaningful way. Again, no silver bullet, but a good place to start is anecdotal evidence, which can provide much-needed shading to not just the binary cause and effect that you see in the data, but all those squishy grey areas that make up the connecting tissue between numbers on a page.

Obviously there’s no way to be sure that you’re getting data right, and as we’ve seen endlessly, the human condition does not always align with data collection conventions, but these tips will help you begin to contextualize your data. If all else fails, you can always give Steve Carell a call.

Sarah talks with Dr. Marlene Kolodziej, Vice President of Centralized Services at RICOH USA, Inc. about the company’s creation of a centralized services division, the journey from product to services provider, and her experiences leading virtually.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, I'm excited to welcome back to the Future of Field Service podcast, Dr. Marlene Kolodziej, who is now Vice President for Centralized Services at Ricoh USA. Marlene, welcome back to the podcast.

Dr. Marlene Kolodziej: Thank you, Sarah. It's a pleasure to be here.

Sarah Nicastro: Marlene and I were just chatting, we had the good fortune to do our very first podcast together, live at Field Service Amelia Island last year, which I don't know about you Marlene, but in this crazy time of no travel, I look back on very fondly, and certainly look forward to the next time we can be in person at an industry event.

Sarah Nicastro: So at that point, Marlene was in a different role and we had a podcast panel at that event that was on Women in Field Service. But today we're talking about a different topic, which is how the organization that Marlene is with now, Ricoh, has developed a Centralized Services strategy. So Marlene, again, welcome back. And let's talk a bit about this big change for you. So the Centralized Services Division that you're heading up now at Ricoh is newly created. So to start, tell our listeners a bit about why the Division was created and what your charge is.

Dr. Marlene Kolodziej: Thank you for the opportunity, Sarah. I really appreciate it. The organization Centralized Services was created to bring together all of the customer facing service and support teams, including Ricoh hardware and software, product support, production and office print, as well as application support and our IT support centers, and as well as our Ricoh Customer Branded Support Center. So we have a few initiatives for Centralized Services organizations, but its essence is to deliver the customer joy. And I know that sounds a little bit hokey and we hear everybody wants to bring joy to the customer or have the customer have a joyful experience. But when a customer has a great relationship with a company or a person or a product, we know that, that in turn deepens that relationship between the customer and the company, and it increases for us the value of our Ricoh brand and enables us to continue offering Ricoh products and services that meet or exceed the customer's expectations.

Sarah Nicastro: Wonderful. So it makes sense to me, I mean, it's really difficult to, when you talk about creating a positive customer experience, one of the hardest factors to that I think is seamlessness, and having that experience be not something that's disjointed or if you have each division of the company focusing on customer satisfaction or success in their own ways and nothing tying it all together, you have an opportunity to miss the mark. So that focus and centralized approach make sense to me. It is a big change for you. So I know you told me it's your first non-IT role in more than 30 years. So what made you interested in making such a big change and how are you liking the non-IT aspect so far?

Dr. Marlene Kolodziej: I'm sure, as you say, thank you for that question, as you say, that it's my first non-IT role in 30 years and I have to laugh, because now everybody knows I started in IT when I was two.

Sarah Nicastro: Exactly.

Dr. Marlene Kolodziej: But I wouldn't necessarily say it's a planned change and I've asked you if you'd believe me if I pose that question to you, I mean, I thought that my next step in my career would be a CTO or CIO position. I mean, I finished my doctorate just over a year ago and my research was partially based in the technology space, in particular in the cloud space. And it didn't occur to me that I wouldn't continue in IT, but at the time I did take a step back and I really thought about what I was looking for.

Dr. Marlene Kolodziej: And I realized that there are three key areas that needed to be satisfied. And the first was able to use the knowledge from my research and apply it to my next role. I mean, that's obvious, you spend years creating work and then you don't want to abandon that. You want to continue with that knowledge and deepen that and broaden it. And then the second was to be part of a company that was not risk averse and embrace change and new ideas. And I'm not saying a company that's going crazy in the risk space, but something that was open to a bit of exploration and a bit of challenging, especially around new ideas. And then the third was a good cultural fit and style that provided me with an opportunity to continue growing organizations, as well as ensure the growth and success of people.

Dr. Marlene Kolodziej: And for me, selfishly, I want to learn and I want to grow as well. And I've always been about helping people be successful. And the job I do just happens to be a conduit to enable me to get people to help them to grow, and I explored opportunities with those goals in mind and I realized they needed to be open to consider roles outside of IT. And this position at Ricoh checked all those boxes. And I also had to consider changing where I thought I'd be next. And to say I've made the right decision by coming here would be an understatement, but it really was one of those times where I just didn't expect to not continue with my career that I'd been building for 30 years to get to that CTO or CIO position. So it was a big change.

Sarah Nicastro: Yeah, but I mean, if you are interested, and it sounds like you are, in that continual growth and just your own journey of evolution, sometimes doing something different is the best way to grow and expand. So that's awesome. So when we talked last, we talked about, like many product manufacturers, Ricoh is in the midst of a fundamental evolution away from being just a product provider to being more of a services provider. So tell us what you envision related to that, and where you feel the company is at currently on that journey.

Dr. Marlene Kolodziej: When we think about where the traditional office space has evolved and how much more mobile our workforce has become, and I'm talking pre-COVID here, individuals expect a more unique experience that's related to how they work and not necessarily to how everybody else or how the masses work. I mean, if we put our mobile devices side-by-side, the devices themselves will probably be different and how they're configured and what apps we're using. They're not going to be the same necessarily, and our overall experience with those devices are unique to each of us. And we think about how people use our products and services at Ricoh, and there's a uniqueness to that experience as well, which really drives us to provide a service that's special to the individual and not necessarily tethered to a specific product, but more about how that product is used by that person.

Sarah Nicastro: Now, with the introduction of the Centralized Services Division, how do you see Centralized Services playing a role in that journey to the company becoming more of a services and solution company versus a product company?

Dr. Marlene Kolodziej: That's a great question. And when you think about transformation, it's a challenge for any one of us never mind an organization. And that being said, many successful companies are continuously transforming and Ricoh is no different. And for Centralized Services, we've created a multi-year roadmap that first takes our unique service offerings and blend them together to create a more holistic view of the customer and the customer experience. And I think you touched on that earlier as we started the conversation around all these disparate type of pieces and trying to bring them together and harmonize them to create that joyful customer experience as they work with us as a company. But as part of that journey, we're also implementing new tools and technology to drive that more joyful experience. We have a new integrated voice response to drive dispatch avoidance and allowing us to resolve more issues at first call, to rolling out new quality management initiatives, automating customer sentiment information real time, leading again to that more joyful experience in real time, as our customers are working with us.

Sarah Nicastro: Good. So Ricoh has made quite a bit of progress in terms of, I guess, recognizing the potential of service and more strategic service. What do you think are some of the things that will need to happen next for Ricoh to continue to realize the potential of that vision?

Dr. Marlene Kolodziej: Well, I think we need to be a services organization. It's not necessarily about products and services. I think it's, not to pull the COVID card and the impact of COVID to all of us, but I think as people are changing the way they work, they're changing the way they learn, they're changing the way they do business. I think that they're untethering themselves from offices, they're untethering themselves from physical spaces. And we have to just be much more flexible to helping people be successful in whatever they're trying to accomplish. It's understanding their goals and objectives and being that services oriented company that says, "Oh, I understand you're not just about printing you're about X or Y or Z", and helping you get to that place and being that service provider of choice.

Sarah Nicastro: Yeah. So you mentioned COVID, so here you are, you make this huge career change and you just get situated and then all hell breaks loose. How has your department, the Centralized Services Department been affected by COVID and what are some of the ways that you're working to adapt?

Dr. Marlene Kolodziej: That's a great question, Sarah, and I appreciate that. And I say that I'm really reluctant to use the word pandemic and silver lining in the same sentence, but it's really created a cultural shift for our organization. And I'm proud to say our teams were actively practicing our business continuity plans early this year in preparation for this event, especially hearing the early reports, and coming from an IT background, disaster recovery and business continuity planning are second nature. So it was natural for me to ask the teams to practice and improve our plans prior to us needing to use it. And of course, like everyone else, we never expected to have to enact those plans. We've moved almost our entire customer facing support centers remote, and we created new on and off boarding, consolidated and improved training and are now clearly focused on helping our agents deliver the best service possible.

Dr. Marlene Kolodziej: We've also estimated how much we've reduced our carbon footprint, for example. One small piece of my organization is estimate to save almost 900,000 miles of driving a year and reduce carbon emissions by almost 330 metric tons. So I think it's really important that we recognize it's not just about shifting people. I mean, when we enacted our business continuity plan, we've literally made that happen within two hours. And it was during, it was 10 o'clock at night, we pulled the trigger and we had people working remote within two hours by midnight. And that was mid-March, and we continued ever since. So the team, kudos to the team, I have great leadership and great team members and they were ready to do this. And I think for us, it was a shift to working remote. Not that, that doesn't come with its own challenges and its own changes from our cultural perspective, but we've been working remote and providing services ever since.

Sarah Nicastro: Yeah. And augmented reality has played a role in how you've been able to... I know you said that was a technology that you had been utilizing, but you've seen a really significant spike in the use of that tool specifically to help you adapt and be able to continue providing service. So I'm just wondering if you can speak a little bit to that and talk about how you see the role of that technology evolving as recovery ramps up.

Dr. Marlene Kolodziej: Thank you for that. I think that was one of our challenges. When we talk about cultural challenges, we were encouraging our folks to use augmented reality and not travel as much. Our top guns to not have to go to customers and help fix issues when we had field services and other folks on the ground that could potentially help through the use of augmented reality, when we could have a, what we call a top gun and someone on the field side and working together, but it was just a struggle. And so that was a big cultural shift. COVID literally forced us to use that tool to be able to provide services and support to our customers. And we struggled to get traction in this area and the teams have really since embraced the technology. While some States have returned to work, we still continue to use augmented reality to resolve those calls instead of dispatching our resources.

Dr. Marlene Kolodziej: And we think we'll find a happy medium in the future as folks return to work, that we'll have a much higher use of augmented reality. But we won't eliminate travel as we move forward, but the technology is valuable and here to stay. And as a matter of fact, we had in February I think only 126 augmented reality calls, but in April we had over 5,000. So we really embrace the use, but I think for us, we're going to arrive at more of a happy medium as we see more of a return to work.

Sarah Nicastro: Yeah, that make sense. It's really interesting to see how this situation has really created more open-mindedness to change. I mean, people, like you said, have been forced to adapt. So the folks that, before you're saying, "Hey, could you try this tool out? I think it will really help you." And it's easier to, "I want to keep doing my thing", or what have you, but that's another, I guess, lasting change that I think will take place, is just people being a little bit more open to different ways of operating. So as COVID recovery ramps, hopefully, and we find the next normal, what initiatives are on the horizon for the Centralized Services Division?

Dr. Marlene Kolodziej: I think for us, it's an opportunity to remain untethered from a physical location. I mean, we want to continue to develop and grow our resources to bring the customer that joy that we talked about, but we also want to explore bringing on employees independent of location with the ability to provide the best service possible. And this includes the development of new services for our customers. And the vision is only possible through the implementation of new solutions and technology aiding the growth of our diverse workforce while keeping us all connected. So I still get to wear my IT hat from time to time.

Sarah Nicastro: That's good. Yeah, it's a nice combination of different roles. And I think that's another interesting discussion is, to what degree will we return to a physical world of work, versus the remote circumstances that we're in being a bit more permanent. And I think that, from the conversations I'm having with folks, there's like you said, related to augmented reality, there's going to be some sort of a hybrid approach. But I think it's certainly something that the people are exploring in terms of the significant benefits of having some of the team be remote permanently. How about, with this being a really big change for you and just in terms of a change in career, and then putting the COVID situation on top of that, what would you say is the biggest lesson or insight you've learned as a leader over the last couple of months?

Dr. Marlene Kolodziej: Well, that is a good question. I mean, I initially thought that it was more about sort of reinforcing what we already know. Things like, we'll need to make decisions in a fluid situation without all the information, and that your people are talented and to continue trust that they will make the right decisions and so on. We all know those things to be true. But I think the one thing I can say is, I learned how much people really do need to hear things will be okay, and that we've got this and that we're all in this together.

Dr. Marlene Kolodziej: And this new way of work, wherever we land will require us to rethink how we stay connected and how working together is really a personal endeavor, and one that we should treat with respect and dare I say, love. It's okay to be human more than we think we need to, it's probably the biggest thing that I learned, that is not, it is about getting the job done. And you hear me use words in this whole conversation, like joy and love and Sarah, you know me, I'm not the huggy, touchy, feely, it's let's get things done, let's do what we need to do, let's buckle it up. But this has also been a humbling experience, and it's really provided me as a leader with the wherewithal in a sense to step back and say, it is sometimes about the intangible and the feelings and being more human than we think we need to.

Sarah Nicastro: Yeah, it's a good point. Marlene and I were talking one evening last week, and the way I put it is, it's the weight of this all is very heavy. And that, in a lot of different ways, I mean, depending on what your situation is. There's really hard business decisions happening. There's people out of jobs, there's people that have family members or they themselves are battling illness. There's parents who are desperately trying to sort out how to continue working and take care of their children. You know what I mean? There's, there's a really big weight to all of this. And I think that to your point, being conscious of that and remembering how much authentic human connection helps us all feel like we can face that, is really important.

Sarah Nicastro: I know the other thing you brought up last week is to remember it's not permanent. So it's hard when you're in it and we're all in it. I mean, we're in the thick of it. I think, I know at least for myself, mid-March, I mean, it was, "Hey, we're going to lock down for a couple of weeks and then everything will kind of sort itself out." And here we are, and it's starting to feel like it'll never end, but it will. And the best way to get through it is to band together. And you're right, I mean, especially in a virtual world, we all have to stay in touch with one another and stay connected and help each other out. So it's a good point. And I think it's one that's been shared by quite a few leaders, is that the business aspect of everything is almost coming secondary to the need to think about the human side and put people first. So I think it's a really good lesson. So, good. Any other thoughts or comments you want to share before we close for today?

Dr. Marlene Kolodziej: You know, I think just one thing, and it kind of gets back to the beginning of the conversation a little bit to wrap this up that part of being human is, is also to think about yourself and take a step back and really understand your own needs. You had asked me about certainly my next step in my career, and I shared a little bit about where I thought I'd be and where I'd end up, but it took some self-reflection as well.

Dr. Marlene Kolodziej: So I think just remembering to be more human during this event, but also be more human and kind to yourself and to take the time and to take a step back and realize that it's okay to get in touch with your needs as well, and not to try and be everything to everyone during something so dramatic as what we're going through today. It's unprecedented. And I think that we all need to take care of ourselves and our needs, whether it be a career or family or time or whatever that is. Even from a health perspective that I think folks need to really take a step back and take that personal inventory and make sure they're doing well for themselves, as well as others in their life and in their work.

Sarah Nicastro: Yeah. I'm very guilty of that. My strategy is move a million miles an hour and don't take any time to reconcile the reality of what's actually happening, which is-

Dr. Marlene Kolodziej: Yeah. I think that's the human condition.

Sarah Nicastro: ... not healthy, yeah. But very good point. And Marlene, thank you so much for joining again today. I'm excited to see where this new path at Ricoh will take you and I'm sure we will welcome you back at some point in the future to see what's going on. So thanks [crosstalk 00:00:22:47].

Dr. Marlene Kolodziej: Thank you for having me, it was such a pleasure.

Sarah Nicastro: Absolutely. You can check out more of our content by visiting us at 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 by visiting www.ifs.com. As always, thank you for listening.

By Sarah Nicastro, Creator, Future of Field Service

The Gartner 2020 Magic Quadrant for Field Service Management is a highly-anticipated piece of research each year, both for the vendors hoping they’ve achieved a prominent placement and for those in the industry who rely on the Magic Quadrant to help steer their technology investments for the upcoming year(s). As I read through the 2020 Gartner Magic Quadrant for Field Service Management, I was impressed by the progress the report illustrated. Not only as it relates to the technology provided by the vendors evaluated, although that progress is interesting too, but by the statistics that painted a picture of significant progress by service organizations.

I’ve been interviewing service leaders from brand-name businesses across a wide variety of industries for more than a dozen years – sometimes it feels like those years have flown by and other times it feels like I’ve been doing this for a lifetime. But what has been clear to me over the past three or so years is the seismic shift taking place as service becomes a strategic differentiator for businesses in almost every industry. This progress has revealed itself to me one conversation at a time, but when you pause to look at it collectively you can see the hard work these leaders are putting in to really innovate their businesses, embrace digital transformation, and meet customer needs in new and exciting ways. My personal collection of conversation after conversation that reveals immense progress is reflected in some of the research shared in the 2020 Gartner 2020 Magic Quadrant for Field Service Management.

Outcomes-Based Service Takes Hold

In Gartner’s strategic planning assumptions, shared at the beginning of the report, Gartner states that, “By 2025, over 50% of equipment manufacturers will offer outcomes-based service contracts that rely on access to digital twin data, up from less than 20% in 2019.” In a later section of the report that shares survey results from 84 customers of 14 vendors evaluated, Gartner reveals that, “One third of respondents are already using this model, up from 19%, and 34% intend to offer this model within the next 12 to 24 months.”

As we’ve discussed, Servitization and outcomes-based service are the future – but we know they are not easy evolutions and take time. Gartner’s research illustrates not only the recognition of the importance of offering outcomes-based service, but also the progress the industry has made – and has plans to make – in doing so. This corroborates what we’ve seen in covering how companies like Cubic Transportation, Tetra Pak, Munters and Alfa Laval are embracing this journey.

Software Use Advances to Meet Service Needs

As service organizations continue to proceed down the path to outcomes-based service, they need more advanced technologies to enable the delivery of those outcomes. The software vendors featured on the Gartner 2020 Magic Quadrant for Field Service Management have evolved quite a bit over the last couple of years themselves, and we see some of the solutions offered becoming simultaneously more sophisticated and simpler to use.

Gartner shares two other strategic planning assumptions that reflect more advanced technology demands. First, “By 2025, 50% of field service management deployments will include mobile augmented reality collaboration and knowledge sharing tools – up from less than 10% in 2019.” We’ve seen even more enthusiastic adoption of AR since COVID-19 struck and, personally, I wouldn’t be surprised if the number in 2025 is even higher than 50%. In the survey of 84 customers from the 14 vendors, 64% of respondents are using or plan to use knowledge management within 12 months. Both AR and knowledge management hold great potential in a number of critical areas for field service organizations: improving customer experience, increasing productivity, more efficient training, and the prevention of loss of uncaptured knowledge as older workers retire.

Gartner also shared in their strategic planning assumptions that “algorithms and bots will schedule over two-thirds of field service work for field service providers dependent on automated schedule optimization, up from less than 25% in 2019.” In the survey results, Gartner revealed that “Sixty-three percent of the respondents (up from 39%) indicated that they were already offering their customers a means to self-serve.” Moreover, the report states that “In 2017, Gartner predicted that, by 2020, 10% of emergency field service work would be both triaged and scheduled by AI, up from less than 1% in 2017. Of the surveyed reference customers this year, 23% indicated that they already schedule some work automatically.” Respondents also stated that “the overall average number of technicians handled by each dispatcher was 47, compared with the 21 reported by respondents to the survey conducted for the 2019 Magic Quadrant.” We see here an interest and readiness from field service organizations to leverage more advanced tools, which I believe stems from a recognition doing so is essential in being able to evolve the ways they need to in order to remain competitive and successful.

I think it’s also interesting and important to keep in mind that much of the work for this report was completed prior to the real impact of COVID-19. While the challenges of the pandemic are vast, I do also believe that once we’ve recovered, we will see an acceleration of innovation among field service organizations because navigating the challenges has resulted in more openness to change, increased agility, and greater recognition of the importance of technology.

By Tom Paquin

This week, Gartner once again released its Magic Quadrant, evaluating Field Service Management software vendors on their ability to effectively provide solutions to their customers.

The report is, as always, not just an assessment of the various vendors in the service industry, but also an overview of the state of the service market today, and what’s clear to me through Gartner’s market assessment is that service is becoming even more vital than it has been to the success, continuity, and growth of businesses in all sorts of different industries.

So knowing all this, and preparing for the future, what has Gartner identified as major market trends, and how can you prepare your business? Here are three areas noted in the report that you should be considering for your business today.

Outcomes-based Service
As Gartner writes, “Of 54 respondents, one-third were already offering this model, up from 19%, and 34% indicated that they intend to offer this model within the next 12 to 24 months.” This means that more than half of organizations will be moving towards an outcomes-based service model. This is an obvious move for forward-thinking organizations. By building their business plans around outcomes, rather than selling warranties, you build long-term contracts that extend beyond the lifespan of a given product, and you offer your customers something more valuable than the promise to resolve issues. It's something we're eager to discuss here, and do some with some frequency.

Of course, in order to do outcomes-based service right, you need to actually be measuring and managing internal systems, whether it be asset-centric, or in terms of the speed and effectiveness of service delivery. For example, if you promise a 4-hour time from ticket to resolution, you’d better not only know you can do that, but also make sure that doing so is actually profitable. Getting that right naturally benefits from smart optimization.

Knowledge Management
As Gartner notes, “Although virtually nonexistent for technicians only a short time ago, about two-thirds (64%) of 63 responding reference customers to our latest survey said that they are using or plan to use knowledge management for field service within the next 12 months.” Knowledge management is no joke, and with an influx of new, inexperienced technicians replacing an aging workforce (my last study had technician turnover hovering around 50% annually) getting it right is the key to successfully managing your business.

What tools you use will depend on your business, but manuals on mobile devices might not be enough. Many organizations are finding great success with augmented reality and remote assistance as a means to quickly upskill technicians by offering them a virtual mentor watching them over their shoulder.

Zero-touch Service
While within the context of our current challenges with COVID, this has taken on a slightly different meaning (and has been mitigated by tools like the AI ones discussed previously), in this instance, we’re discussing the ways in which businesses schedule and manage service visits. Gartner writes, “In 2017, Gartner predicted that, by 2020, 10% of emergency field service work would be both triaged and scheduled by AI, up from less than 1% in 2017. Of the surveyed reference customers this year, which represent a small but often leading portion of the overall market, 23% indicated that they already schedule some work automatically.”

Getting this right starts with a robust customer experience tool, and emanates from asset management as well. Solid IoT systems can dispatch technicians before customers even realize there’s a problem, and chatbots can be calibrated to respond accurately to challenges and recommend the right solutions. There are a great deal of tools that support zero-touch, and it behooves the service professional to choose tools that take the fullest advantage of inputs available today, as well as the openness to handle potential new technologies as they come online.

With these broad-reaching changes impacting the industry, it’s important to build a plan with proven partners that understand your business, and have tools that cater to the way you do service, not force you to cater to them. For more trends impacting the industry, and the full vendor guide, click here to access the report.

Rodger Smelcer, Vice President/Owner of United Service Technologies discusses with Sarah five ways that COVID-19 has brought clarity to his business and what changes he’s made as a result.

Sarah Nicastro: Welcome to the Future of Field Service Podcast. I'm your host, Sarah Nicastro. I'm happy to welcome to the podcast today Rodger Smelcer, vice president and owner of United Service Technologies. Today we're going to be talking with Rodger about five ways that the COVID-19 challenges have brought clarity to his business. Rodger, thank you so much for joining today. Welcome to the podcast.

So before we dive into the questions, can you just tell our listeners a bit about yourself and your background in the space and what United Service Technologies does?

Rodger Smelcer: Well, of course my name's Rodger Smelcer and United Service Technology is a company me and my business partner, Bob Heidkamp, started in 1995, and the idea behind the business was to really provide a wide gamut of services for the grocery industry specifically. We both had a background in grocery, so that's how we got started. And currently, we service about 2,000 grocery locations in the West Coast.

Sarah Nicastro: Okay, excellent. And you and I have spent some time together over the past handful of weeks in some different interactions. And in our chats, we've talked about this idea of some of the ways that our current challenging landscape has kind of brought clarity to yourself as a business leader and a lot of other folks as business leaders. So specific to you, we've outlined five different ways it's impacted you, and I want to talk through each of those on today's episode. So the first is that it's brought clarity for you to the need to create a culture of kindness. And I know that you've told me this is something that has really always been important to you, but has just become even more emphasized as the last few months have unfolded. So tell us a bit about why it's always been important to you, how the current circumstances have brought even greater clarity to that need, and maybe any advice you can share on how you've done this in your business and how others might do the same.

Rodger Smelcer: Sure. Well, I think we have done it for pretty much the entirety of our business. We've focused in. We always like to say we're developing a culture of kindness because you never really get there all the way. So what we do is we really try to look for the evidence of a culture of kindness, and that's part of developing it, right? First, you have to define what that looks like. And one of the ways we've been able to define that is just two words, respect and cooperation. So when we see those two things happening within a department or inside of a group, that's our evidence that the culture of kindness is actually working there. And so we look at it that way. We're looking for those two things all the time.

Rodger Smelcer: I would say during COVID, one of the big changes for us has been utilizing different pieces of software that we already had. We already had an HR software platform that had a community kind of a building section of it, and what that allowed us to do is create what we call positive impressions. And so peer to peer, they're giving each other positive impressions in a multitude of categories, and that allows us to reward the desired behavior, right? And that's a principle we always operate our business on is only reward desired behavior. And so we're constantly reinforcing that through these positive impressions. And then of course, just through communication, casting the vision and making sure that people understand it.

Sarah Nicastro: Okay. So I have a question about that. So you said that respect and what was the other? Cooperation. I was going to say collaboration. So respect and cooperation are two ways that you know the culture of kindness is working. So if there's an instance where one of the two of those things is lacking, then how do you determine the root cause of that lack? Meaning like how do you determine if it's more of a personal employee issue versus a breakdown in that culture of kindness? Does that make sense?

Rodger Smelcer: Yes, and that's a great question. And so that goes back to why do you... What are the criteria you hire people based on? And so we like to hire on what we call the three Cs, character, capability and chemistry. So we want them to have the character, to be a person of their word, to get to work on time, to do all those things. We want them to be capable of doing the job, but if they don't know how to do something, they need to be a quick learner. In fact, we'll tell a perspective employee that our business doesn't afford us to learn slowly. There are a lot of businesses that do. Ours doesn't. And so we give them a heads up, we're looking for fast learners.

Rodger Smelcer: And then three, chemistry. Are they a team player? Do they work well with others? And what we find is when we're dealing with someone, whether they're not displaying the culture of kindness properly or virtually, any problem basically boils down to those three areas. It's kind of like a tripod, right? And if it's missing one of those legs, it just falls down and it's not very useful.

Sarah Nicastro: That makes sense.

Rodger Smelcer: So when we call people in to talk to them and try to correct behavior, we're usually dealing with one of those three things. And so, because we're not dealing with the specific issue as much as we are these three things. So if they're not showing up on time for example, we're talking to them about their character. What does good character look like? How do we improve this? And we get to the specifics, but we try to deal with the root cause.

Sarah Nicastro: That makes sense. Yeah, this kindness topic is interesting because I think to a lot of people, it could sound a little bit fluffy or woo-woo or what have you, but I do think it's really important, and I've actually been having a lot of conversations recently with folks about how before these current challenges started, kindness was appreciated to an extent, but also sometimes seen as weakness or potential for weakness or potential for being too soft or that sort of thing, and how the perception of kindness in leadership has changed to be perceived as such an important strength. It's really interesting how facing these last few months collectively as a business, as a community, as a world, really has brought a lot of light to how truly important that kindness is. So I know that it's something that for you has been important for your business for a very long time, but I think even other organizations that didn't prioritize it so heavily before are really starting to look at how much of an important role it plays and how they can do a better job.

Rodger Smelcer: Well, a couple of things. So you do find yourself saying, "Don't mistake my kindness for weakness," quite a bit. And number two, in order to really attract and keep millennials and Gen Z these days are also known as zoomers, right? They're demanding that culture of kindness. Really, even in all the turmoil you're seeing now in the media, it all comes down to everyone just wants to see a culture of kindness, right? That's what... Those protests are over that. All these things, so everybody wants to get to a culture of kindness. I think figuring out how to do that is the part that companies sometimes struggle with. I feel like we've been able to accomplish that to a large extent in our company. And of course, like I said before, you're always working on it. It never ends. You're finding new ways to make it more kind. We're finding that game of finding things helps in that as well, and we do that in a lot of different areas and then training and other things.

Sarah Nicastro: I don't want to get us too off track, but that is my specialty. And one thing you said, it just made me really curious. So what are some of the ways that those younger employees of yours, you said they're demanding a culture of kindness. How do you see that presenting itself? What is the evidence of what they're looking for that makes you need to level up in this way?

Rodger Smelcer: It's the questions that they're asking during the interviews, right? One of the questions millennials will ask is what is the culture like? Well, I never hear that from my boomers or my Gen X people coming in. And I hire across the whole gamut, but that's a particular question from them. And so that prompts the question from our interviewer, well, what kind of culture are you looking for? Kindness comes up a lot. And I think that's where we've been able to make some inroads because we're listening to understand instead of listening to respond during those interview times. And I think that's mistake a lot of companies make is they're listening to the person, but they're listening to respond with the next question or with the kind of the criteria that they're really looking for in that moment.

Sarah Nicastro: Right, or even listening to respond with, "Yes, here's how we can give you that," versus thinking... Yeah, versus thinking, "Oh, maybe we should think about this. If this is coming up in these conversations, do we actually do this? Is this something we should consider?" That's a really good point because it's not the topic we're talking about today, but this whole idea of how companies need to evolve to be more effective in their recruiting and hiring practices as the older workforce retires is a huge pain point for a lot of folks. So I really love that idea of listening to understand instead of listening to respond, because if you can glean insights from that where you can go back and change your, whatever it is, job descriptions, benefits, whatever, to make it more appealing and improve your success rates, that's a really big deal.

Sarah Nicastro: Good. So the second area of clarity that we had discussed is the idea of how important a sense of community is. So I've heard you say a couple of times all ships rise with the tide, right? So tell us what you mean by that and how you feel about this importance of community.

Rodger Smelcer: Wow, I have a lot to say on that subject for sure. Well, I do believe all ships rise with the tide. As we share best practices as an industry, it lifts the whole industry, right? And I think one of the things that's come out of this time during COVID and the pandemic is all these virtual happy hours, right? And so many people and companies have participated in these. And for our industry in particular, I think they've been very, very positive. We're getting together casually, but we're also giving updates on what's happening in our specific region and maybe some of the solutions that we've brought into play or policies that we've put together to help us with COVID. And I'm proud of our industry for sharing a lot of that information, but also disappointed that our associations are not more actively surveying the whole group and then taking that information and putting it back out to the entire group.

Rodger Smelcer: I think those are the things... In a lot of ways, I think our associations and our groups that we all belong to, and there's multitude of them, their response to this pandemic has been anemic at best. And we've been left on our own to figure it out, and one of the ways we've done that is through these virtual happy hours, right? So we get together, share a lot of the best practices, bring each other up to speed on what's happening in our different regions of the country. And I think it's been beneficial and I think all ships are rising with the tide during the pandemic.

Rodger Smelcer: And there are a lot more young people coming into the industry now, and we're participating in that. I'm sure you are too. I'm seeing a lot of millennials and Gen Zs coming into the industry and they're networked already. They're communicating this way already. I think as companies, we've been a little bit slower or behind the curve matching that kind of communication, that kind of network, that they are already just kind of born with at this point because of the technology advances that they've experienced and they're coming up.

Sarah Nicastro: Yeah, that's a good point. I think in my role of really trying hard to provide valuable insight to people and to make connections and to share best practices, I think the appetite for that has definitely increased. Since this started, I think that people really want to band together and feel as though... I mean, it's a hard time. You don't want to feel like you're in it alone. You don't want to feel like you're on an island. And we can't get together in person, but it's really nice to be able to just talk with someone about a shared challenge or even just how you're feeling or how they're tackling x, y, or z. There's a lot of value in that.

Sarah Nicastro: And I think that it's a really good point. And hopefully, I hope that that sense of community sticks. I hope it sticks after things get back to some semblance of normal. And I think that the way that we've kind of bonded as humans, I hope that that is something that remains. I think so. For me, it will. And I think if anything, it's just made me reflect on how lucky I am, how much I love what I do, how much I love the community that I serve. And because it's easy when things are going great to take a lot of things for granted. In some ways, it's human nature, right? So it really gives you a chance to think about what's important and this is one of those things. So the third area is clarity around your leadership and the role you play as a leader and what that has looked like. So what are your comments in that area?

Rodger Smelcer: Yeah, I'm typically hard on myself when I'm introspective like that. I feel one of the areas I've improved in that was a weakness prior to the pandemic is just I felt like I was going too slow. And the evidence of that is we were touched early by the pandemic because one of our employees had a father that tested positive and was in the first 10 cases in the US. And so when we found out about it early, we were able to jump all over it and start creating policy and do a lot of different things. But what I saw was we were able to go at triple speed to get things done than we normally do.

Rodger Smelcer: And so could we sustain a higher speed on a lot of these projects if we were really focused? And I think that's improved a lot. We've been moving all of our projects along much quicker post-COVID, and we're not done with it obviously yet, but post the initial reaction to it. And I think that's one area that as a leader and not just me, all of our leaders have grown in this particular area. Being quicker, having a higher sense of urgency as we attack these issues and problems. There are many changes and effects of this pandemic on every department in our companies.

Sarah Nicastro: Yeah, that is a good change and it's a very important one. And I think that we did a podcast a week or two ago, and one of the things that came up was that increase in pace of change. And it was with DSL. And I think one of the things he said is just how proud he was of the ability to step up and do things faster and all of that stuff. And I think that's... You don't know what you're capable of until you're forced to really push it to the limits, and a lot of people are in that spot right now.

Rodger Smelcer: I'd say the other big area is just communication, right? It's been my normal practice over the years to reach out personally to all our employees. I usually call two or three every other day and just try to connect with them. But during this pandemic, the dynamic has changed, right? Now we're not just... It's not, "Hey, how's it going? Is there anything I can help you with? Or what do you need?" Now t's health concerns. I have one employee that has 10 of his family members have tested positive for COVID.

Sarah Nicastro: It's alarming.

Rodger Smelcer: And that's a whole different conversation now, right? Because he's worried about his family and what's ultimately going to happen. And there's a closeness that generates from that though too. It's not a negative thing, it's definitely a positive thing. And you start to get to understand their circumstances a little bit better and get closer as a company.

Sarah Nicastro: Yeah, those interactions have... Maybe before they were somewhat on a surface level and now they've really dug deep into real life stuff. I think it's a good point though that when you were saying communication, I was thinking about the fact that if you as a leader are highly committed to creating this culture of kindness, that element of communication, and more importantly, personal communication. And I would even further qualify it as sincere personal communication. I don't think you could have a culture of kindness without that.

Sarah Nicastro: I think that it's one of those things that... And that's why I was asking you some follow up questions on the kindness thing because I think it's something that is easy for anyone to say like, "We have a great company culture. We have a culture of kindness and everyone loves it here," or whatever, but when you really peel that back and start to look at what are those practices that make that claim a reality, doing something like being regimented with yourself of every other day, I'm going to contact two or three employees personally and show them that I genuinely care and really check in with them, that's a practice that I think goes a long way in making good on that desire to have a culture like that.

Sarah Nicastro: So I just think that's a really important point to touch on because it's not just about coming up with some really great sounding company mission and putting it on the walls of the building, it's about those daily practices and weekly practices that foster that type of environment. So, good. Good job. You're doing a good job. That's cool. All right, so the fourth area we talked about was clarity in business strategy. So talk to us about some of the things that have come to light about where the business is heading and what needs to happen with the strategy to be successful.

Rodger Smelcer: Well, I think everybody got into gear real quick as the pandemic turned on and we realized that this is bigger than we thought, right? Because in the news early, it didn't seem like a huge thing and it may not come over here and all of that. But once it did, you start really taking a look at what's important, what's not and start really looking at your processes that are in place now. Of course, that you're putting together your policies that are ever changing during this pandemic. Things get mandated and then pulled back and vice versa.

Rodger Smelcer: And so I think for us, the strategies that we used during this pandemic weather are twofold. So we looked at them department by department. What did we expect the new normal to look like? And so we started strategizing on what changes need to be made department by department. And we actually first started with sales and marketing, and what did we need to do to help our customer at this moment? What could we do to help them? And fortunately for us, because we're in the grocery industry, only one of our customers actually shut down, bakery, deli and meat department.

Rodger Smelcer: And so we came up with the idea that we were going to offer a hibernation process to them. And we would do it during our normal plant maintenance cycle for them and help them put the machines in a way where when they came back and turned them on, they would work. We have a lot of experience in this because being in the grocery industry, we've experienced grocery strikes. And during those strikes, we saw the grocery chains come back to equipment that wouldn't turn on. And so they blew up their whole maintenance budget coming back because everything was broken, frozen, not working.

Rodger Smelcer: And so that was one strategy we used from a sales and marketing side. And then of course, our plan two, I think in those moments, you're deciding things that we do every day, are we going to continue to do? And what things are we going to eliminate so we can focus energy on more safety and acquiring more PPE or whatever it is. And I think for us, we decided because our industry wasn't largely shutting down, we decided to keep most things going. And of course, the strategy was to move a lot of people home that weren't home already. We've always had work at home people in our company. For last 15 years, we've had many of them and even prior to that. So we have a good ability to manage our people at home and coach them along in areas that are new to them because they're at home.

Rodger Smelcer: And I think that's a little bit how our strategies have changed. We've just really come up with a new normal for each department and I'm focusing in on that. Another way we do that is, I'm an outline taker, right? And so I was talking to you earlier about switching to kind of a mind map format and making things visual for our team. Not only for them, but so they're able to convey it all the way down to our frontline technicians in the field. And that's been a powerful change for us that has really helped us to be more focused on the things we need to be doing to help our customer along.

Sarah Nicastro: Yeah, you shared that with me. Is it Coggle? coggle.it, I believe, is a mind map software that Rodger uses. And him and I were talking on a call a week or so ago and he brought it up and we actually... He pulled it up and we did one together and it's really cool. It's a great way. I think especially with so many meetings happening virtually, it's a really good way to take all of the thoughts that are bouncing around and put them up visually so that people can follow along on, you might be in an hour long meeting that takes 73 different turns and if you're not taking good notes, you get out of that meeting and you're like, "Wait, what were all the takeaways?" Or what have you.

Sarah Nicastro: And just in terms of brainstorming and innovating and organizing, it's a really, really neat tool. So it's definitely worth checking out. And I'd be curious how many people are doing that sort of thing. I know for me, I think it'll be a great way to outline content and brainstorm different ideas going forward. So I appreciate you sharing that with me. Okay, so the fifth and final area of clarity is around the optimization of processes and technology use. So let's talk a little bit about that.

Rodger Smelcer: Wow, that's a big subject for us. We have implemented a lot of technology, partially for the areas it can help us help our customer, and partially because that attracts and retains millennials and Gen Z or zoomers. So we utilize it in many ways. So a few of them are we utilize an AI technology that allows us to triage the calls before we go and understand the parts needed, dynamically build inventories and things like that. We also use a mixed reality technology that allows us to support technicians in the field. And of course, COVID kind of changed that, so now we're starting to support the customer in the field as well so that we're not in close contact. That's the ultimate distance, right?

Sarah Nicastro: Yeah.

Rodger Smelcer: And then the one I'm most excited about right now is we're using a no-code application development platform that allows us to be more flexible for our customer. One of our customers said to me once years ago that the two most important qualities in a service company for them were flexibility and reliability. And we've kind of taken that and run with it. We want to be able to customize the application used by the technician in the field so that they're basically walked through processes specific to that customer. And it's really helping us do that and provide things like Uber style ETAs, and that's a project we're working on now, and other things like that. So that platform is exciting because we're able to do it internally and develop our own application.

Sarah Nicastro: Yeah, so do you think COVID has ramped up your use of technology, or do you think it's just allowed you to find different ways to utilize the systems that you had in place?

Rodger Smelcer: Well, I think we're unique in that we've implemented many technologies in our industry at least, from the other companies that I'm talking to, but it has really just expanded the use of the technologies we were already developing. We haven't really added any new technology as a result of the pandemic. However, we've made all of the technologies we've used more powerful as a result of the pandemic. And so they reach farther into now areas where we're helping the customer. They also give us the ability to really focus in what we do on the current need of the customer, which is different now that COVID is here. And I think we have to have processes in place that are built into our workflow in the field real time. And as those changes are made, we need to be able to make them quickly and respond.

Rodger Smelcer: And I think that's what the technologies have really given us the ability to do. I think our technicians, our management are all involved and working on those. We talked in... The last time you and I talked together, we talked about one of the ways that makes it easier to retain technicians is helping them develop their resumes, right? And we talked about the mindset of people like me, Gen Xer and baby boomers, that job security mindset versus that employability mindset that these new generations have. And we feel like if we can add all of these technologies to their resume, it adds value to them personally.

Rodger Smelcer: And they appreciate that. And you think that it would be counterintuitive, right? You're building up their resume and they'll just take it and go work somewhere else, but what we're constantly reminding them is who is helping you build your resume? And who's going to help you build it in the future? Are you going to continue to build it here, and you've seen the proof of that, or are you going to go somewhere else and hope that they're going to help build your resume the same way we have?

Rodger Smelcer: And I think that's a real key to retention for us.

Sarah Nicastro: Yeah, I think, Rodger, what I'm taking away from this podcast episode is that we should have you back at some point in the future and do an episode specifically talking about best practices around recruiting, hiring, and retention, because I think that you have some really good input on those areas. And like I said, it's a topic we've covered in the past, not in a while because there's been all of these urgent top of mind things, but I think that would be a really good idea. And it's a very good point. So it's good. Any other, I guess, comments or thoughts or lessons learned that you would want to share in closing?

Rodger Smelcer: Well, I think all the things we've talked about, many of them have lessons learned. And when we talk about that new normal that's coming and really is already here, the lessons that we've really learned as a team, as a management team in our business, is that we needed to focus in on the structure of our department and our people and what they're focused on. I think having a little bit more time, and really the pandemic allowed that, allowed us to have more time to really take a look at the business, right? And really decide... I think a lot of people decided they wanted to try to restructure a little bit to meet the need, but that caused them to take a look at the structure that they may have not normally done outside of a pandemic like we did, and really make great changes.

Rodger Smelcer: In fact, I'll tell you during the pandemic, we've had the best three months in our company's history. And I almost feel guilty saying that sometimes because a lot of times I'm talking to a lot of companies that are in the sit down restaurant industry or they're in another industry that was severely impacted like hospitality. And those guys are just coming back. And recently, we opened restaurants or we're planning to, and we ordered all the food and now we can't open them. And so there's a lot of struggle going on with all these things.

Rodger Smelcer: And trying to keep health at the top of the priority list has not been very difficult for us because we're in an industry where you have food safety and all of those things. We do a lot more training with our customer now than we did pre-pandemic. So I think that's an area where I think a lot of companies could improve and we certainly have during this time. So I'll just leave you with that. Really customer training is a big piece of what we do as far as safety, equipment safety, food safety, and just our technician safety on the job.

Sarah Nicastro: Yeah, and we've talked a bit about how going forward, I think safety is going to be a bigger differentiator for service organizations than it maybe was in the past. In certain industries, it's always been important, but it's so critically top of mind for people right now. How are you going to keep us safe? How are you keeping your employees safe? Everything is going to be centered around the details of what those processes look like. And I think that that's something that's going to be a real important differentiator for quite a long time.

Rodger Smelcer: Well, many of our customers are asking for natural disaster planning, right? In fact, it's included right in the RFPs from our customers. So, you have to be prepared. Every company should have a safety committee that meets on a regular basis and talks about safety issues and creates policy and modifies policy and all of those things. And certainly, we have ramped all of that up post-COVID and really made it even more of a top priority than it already was.

Sarah Nicastro: Yeah, good. And I liked the point you made about how this situation has given you a little opportunity to press pause and reflect as a business, right? I think that you get in the day to day busyness and craziness and a lot can just go by and time can go by. And you're right. This has forced people to reflect and where it's necessary, make some changes. And I think there's some good aspects of the impact this will have for businesses for quite a while, just in terms of their openness to change and the, like you said earlier, the ability to be more agile and to move faster when you need to and that sort of stuff. So really good thoughts, Rodger, and I really appreciate you being here and sharing with us today. We'd love to have you back sometime in the future to talk a little bit more about hiring and retention.

Rodger Smelcer: Yeah, thank you for having me. I really enjoyed it and I look forward to another one with you someday soon.

Sarah Nicastro: Awesome. That sounds good. You can find more insight on how companies are handling COVID complexity by visiting us at www.futureoffieldservice.com. You can also find us on LinkedIn and 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.

By Sarah Nicastro, Creator, Future of Field Service

Alfa Laval is a Swedish company founded in 1883 that is a world leader within the key technology areas of heat transfer, separation and fluid handling. With more than 3,700 patents, Alfa Laval provides worldwide solutions in areas that are vital to society, including energy, pharmaceutical, marine and food. The company has over 17,000 employees, including more than 700 field service engineers, that help customers in nearly 100 countries.

As a product manufacturer with deep history, Alfa Laval has had an eye on advancing its service focus for quite some time. “Service has become an increasing strategic focus for Alfa Laval as we have a huge, installed base with which we need to continue to position ourselves as a trusted partner,” says Cedric Domont, Global Service Sales Director at Alfa Laval. “Service is a key enabler of differentiation and has a critical impact on customer experience. These are the major reasons that Alfa Laval’s focus on service has, and will, continue to increase.”

Like any other manufacturer on the path to Servitization, Alfa Laval has learned it is a journey that takes some time and involves some foundational changes. Jens Pulczynski, Manager Global Service Operations at Alfa Laval, points to a significant shift in company alignment that has enabled the company to make the progress it has. “In 2017, the company was reorganized, and the total lifecycle of products was clarified for alignment, including service sales and service execution,” Jens says.

Digital Transformation is Key to Advancing Service Goals

In addition to its greater companywide alignment on the opportunity around service as a strategic differentiator, Alfa Laval has recognized the role digital transformation will play in achieving its ultimate Servitization vision. “I would divide our technology focus into three categories,” says Jens. “The first is connected products – we have, for some time, embedded our products with connectivity that will allow us to remotely monitor the status and operations of equipment which will increase our service value proposition. The second is remote guidance, which we began investigating last year as a better way to provide expertise to our field service engineers. Then, as COVID-19 hit, we recognized the potential it had in customer-facing capacities and decided to speed our investment in the technology.”

The third area, which will be upcoming for Alfa Laval, is to determine a productive method of virtual selling. “We want our employees to have the right balance between physical and virtual interaction with customers. The progress we’ve made in effectively selling virtually as a result of this time will become something that is sustainable for our business. We’re looking into the right technologies, training, and processes to make this a permanent transformation”, says Cedric.

Remote Assistance Plays a Pivotal Role Through COVID-19 And Beyond

In both navigating the complexity of COVID-19 as well as furthering the company’s broader service objectives, remote guidance has proven impactful for Alfa Laval. “When we began researching remote guidance last year, we were looking at how to support our more than 700 field service engineers. They are supporting a product portfolio with significant complexity and machines sometimes in the market for more than 30 years. We were interested in the idea of providing them more efficient and productive access to remote expertise with a technology that would simulate a hands-on interaction,” says Jens. “As COVID-19 spread and travel restrictions were introduced, we realized that if we acted fast this would be a tool that would aid us in continuing to serve customers throughout the crisis – as well as set us up to serve them better than ever before after the crisis passes.”

Alfa Laval chose IFS Remote Assistance, collaborative merged reality software that blends two real-time video streams into an interactive environment. Two users can collaborate and interact in real-time while telestrating, freezing images, using hand gestures, and even adding real objects into the merged reality environment – whether that’s supporting field service engineers on site or customers directly. “We chose IFS Remote Assistance for our remote guidance because we felt it was a strong technology but also because we value the financial stability and long-term vision of the company,” says Cedric.

The timeframe from beginning of pilot to full rollout was just six weeks, and IFS Remote Assistance is now in use by approximately 150 employees at Alfa Laval. “This solution has provided us business continuity during COVID-19 in areas where travel was banned and keep utilization of our resources high. As we recover from the crisis and return to more normal operations, our use of IFS Remote Assistance will evolve from business continuity to business transformation,” says Jens. “We’ll look at how we can continue to offer remote guidance, eliminate unnecessary travel, improve efficiency, and provide a better work/life balance for our field service engineers. Our customers have been 100% satisfied with the introduction of IFS Remote Assistance and impressed by the way it enabled us to continue serving them, so they will welcome expansion of its use.”

As recovery ramps and business circumstances continue to change, Alfa Laval will work to determine how to expand its use of IFS Remote Assistance and how to continue progressing on the path to Servitization. “IFS Remote Assistance helped us to be fast and flexible when we needed to be, which meant we did sort of a ‘quick and dirty’ release of this technology due to its value proposition in helping us through COVID-19. But it’s just the very beginning,” says Cedric. “We now need to take a step back and operationalize how this fit into our broader transformation – keeping it simple for our customers but looking at how we commercialize it as well.”

Alfa Laval has further goals of connected field service that will all keep the progress moving toward Servitization. “We’ll look at how we can use IFS Remote Assistance hands free, to allow even greater productivity,” says Jens. “And we have various other initiatives to tackle in ensuring our field service engineers are armed with everything they need to provide an excellent customer experience. This is part of a major transformation, and while that includes technology it is also about being willing and ready to think and work differently. We’ve made great progress amid a challenging time and will continue to work together to drive service excellence.”

By Tom Paquin

Forrester, in partnership with Bloomreach, recently published a report on the state of commerce experience for, in which they take a look at how both B2B and B2C sellers have realigned their channel strategies in direct response to COVID-19. There’s a lot of illuminating material in the report, especially on how the rate of adoption of digital channels has picked up dramatically in the face of necessity (unsurprisingly), but what is particularly interesting is that among businesses who sell online, 46% of them are seeing business growth over the last few months.

Another interesting piece, as noted in the report, is that half of the customers accounting for this increase in online commerce are shopping for things that they had never purchased online previously. We’ve discussed this in detail recently, of course, but it bears repeating, especially since we now have empirical data to further support these assertions.

Naturally, the market is following suit. When evaluating their planned commerce spending, 19% have decided to decrease spend on in-person commerce interactions, compared with only 2% before COVID.

These numbers are very compelling for of course all the reasons you’d expect, but evaluating them through the lens of service is an important consideration for both servitized business as well as those that are strictly product-oriented.

Forrester’s research, as it has for the last decade (and full disclosure: I worked there until 2016), centers on the role that technology plays in customer centricity, and the remainder of the report considers things like smart search, and the relationship between direct ecommerce and third-party retailers.

These are all inherently important, and I am fully entrenched in my belief that customer obsession begins by contextualizing technology through the lens of the customer, but there naturally surfaces a challenge in defining a face of a brand when that face has been taken away, and that is where service fits.

We obviously play in the sandbox of field service here, but humanizing your company through service can take many forms. Through smart customer engagement technology, for instance, organizations can not only take some of the operational lift of service off their workers, but also make their workers front-and-center to the conversation of their customers’ challenges. This is a little thing that goes a long way, especially in a world where, as the data shows, purchases are just a click away, and so are your competitor’s sites.

Servitization is of course the other major way that businesses can humanize their brands, and also retain customers through service agreements that have reasonably low overhead and help customers remain within a specific product ecosystem. By building service contracts with the customer in mind to accentuate the capabilities of your ecommerce system, you’re getting the best of both worlds: point-of-sales easiness right alongside an opening into a face-to-face relationship with the customer. The best companies combine that commerce and service data into a single practice that supports business growth.

We know this works. In a study IFS commissioned with IDC, we see that highly-mature servitized companies in the manufacturing space are 8X more likely to see a visible increase in profits directly tied to digital transformation and 5X more likely to grow revenue faster than 5% annually.

There are obviously limitations to the pervasiveness of this theory, though I’d argue fewer than you’d think. I had intended to use clothing as an example, but the existence of my StitchFix stylist (shout out to Kristina) reminds me that businesses are finding new ways to servitize everything. I’d say disposable goods like cleaning supplies are likely to be mired by pay-per-use indefinitely but I am certain that someone smarter than me is working on a way to servitize such industries as we speak.

COVID restrictions will (thankfully!) not be forever, but changing consumer sentiment will have permanent consequences for the sale and distribution of goods. It has mostly accelerated the changes that have permeated all businesses over the last half-decade or so. Service could be the key to championing that change, and making it your own.

Greg Parker, who has 20+ years of experience with brands like Hussmann, Trane, and Thermo King, shares some real-world insight into some of the common challenges that slow Servitization progress within organizations.

Sarah: Welcome to The Future of Field Service podcast. I'm your host, Sarah Nicastro. Today, we are going to be taking a real world look at what slows servitization progress. Servitization has been a buzzword in the industry for the last few years, and we're actually going to talk about why it's a buzzword, and kind of what it really means. Since COVID has hit, we've had a lot of discussions around kind of speeding the journey to servitization. As customer demands are evolving, there's even an increased need just in the last few months to really move to outcomes-based service models and to servitize manufacturing businesses, and really evolve with those customer needs, but it is a journey that seems to be fraught with challenges and takes quite a bit of time.

Sarah: And so, I invited our guest on today. He has a ton of industry expertise and experience and some really good perspectives on what some of the things are, the real world look, at how servitization progress gets slowed down. So, I'm excited to welcome back to the Future of Field Service podcast today, Greg Parker. Greg, thank you so much for being here.

Greg: Thank you, Sarah. It's great to be here.

Sarah: Awesome. So, Greg, like I said, you have a lot of experience in service, so why don't you tell our listeners a bit about your history in the industry and what you've accomplished in this space.

Greg: Sure. It really all started about almost 25 years ago, but it was in manufacturing at the time, and engineering, and that's really where I got started off for the first five or six years. I made the leap into the 3D world of service and sales in about 2004. So, for the past 15 to 16 years, I've been working in a services-type capacity, in really all aspects of it. In the beginning, it was improving service operations, improving overall operations in general management, and then it kind of carried into sales engineering, then over directly into service operations; and then for three years or so, customer care, which is customer service, another aspect of service, as well as technical training; and then the last three to five years has been with portfolio management over our service offerings.

Greg: And so, really, it's been a pretty broad aspect of the services world, but also been playing into the manufacturing and engineering space, as well.

Sarah: So you've witnessed a lot of this evolution firsthand, and I know you have some different experiences with the different companies that you've been with, in kind of leading the charge on the path to outcomes-based service to servitization, and so that's what gives you the perspective and experience that I think will lend to a great discussion today.

Sarah: Now you most recently were with Thermo King, and I know you also have been at Trane and Ingersoll Rand. Am I missing any?

Greg: I was with Hussmann for the first 13 years of my career.

Greg: Yep, and then the next 10 years after Hussmann was with Trane Commercial, and then the last 18 months was with Thermo King.

Sarah: Okay, cool. All right, excellent. So let's start by talking about why it is that companies need to embrace this evolution towards servitization or towards outcomes-based service, because I think that one of the very first steps in kind of preventing that progress from being too slow is the simple recognition that it is the future of service and it is a necessary evolution. So, what are some of the reasons why companies need to embrace this change?

Greg: Sure. Of course, I think that that depends on where you stand and who your customers are in your market, but generally speaking, we know that customers always have similar unmet needs. If you are simply manufacturing a product, and when that product leaves the factory, you're done, then the customer has a lot more needs than just obtaining that product from you. They're going to find a way to solve their problems, and the question will be, are you going to be a solutions provider for your customers, or will someone else be?

Greg: I think, in particular, if you are an OEM, you have a tremendous advantage to get into the services world, because you can really pull all the pieces of the puzzle together for your customers. Even if you're not, it's a great opportunity to provide those solutions, hit those unmet needs for your customer base, and it's really an opportunity to explore what do your customers really want, what do they need, and then prioritize how you can provide that solution to them. That's really the first aspect.

Greg: I'm going to say that there's another one. There's a second one, which is really centered around the financial piece. Consider downturns in the market. How about the times that we are, as a country, going through right now? In a downturn in the market, with many factories having to slow or even shut down, that dramatically impacts the revenue for your business, for your company, and services can be a more steady stream. Are there ups and downs? Sure, but either you will have the opportunity to offset those ups and downs, or it at least will be a level of stability to your business that you do not have today, and so, financially, it's also a great move for a business.

Sarah: Yeah, very good, and I think that there's kind of two different angles from which to look at what you just said. There's the areas in which it presents a significant opportunity for the business, and a path to growth and a path to different revenue streams, and then there's the other side of it, which is where it is a threat to your business to not go down this path, right?

Greg: Right.

Sarah: So I think both sides of those coin are really important, so that's good.

Sarah: I think the other challenge I think of right away is just with the terms themselves, servitization or outcomes-based service. I think, generally speaking, it's a term that signifies a universal and foundational shift in service, as service becoming a strategic differentiator and a path to revenue for organizations, but as you mentioned, that looks very different from business to business. So, I think one of the areas where companies get off on the wrong foot... once they've accepted that this is the path forward, I think there can be some real issues around clarity in terms of what the definition of servitization is, specifically for them.

Sarah: So, what thoughts or advice do you have on, within an organization, as you recognize the need to go down this path, clearly defining what that opportunity looks like for an individual business?

Greg: Sure. I think the first thing that I, in particular, think about is, don't get so hung up on the word servitization, and you just really alluded to that, Sarah. It's one word with a whole lot of syllables, right? If you haven't heard it before, you probably would think that it's some rocket science, but really, it isn't. It is simply getting on that journey to provide service to your customers, and then, what does that journey look like? Well, that really depends.

Greg: So, when you brought up, it may look different from business to business, my thoughts there is, concentrate on the market that you are in. Understand your customers, your customers' needs, and then identify what would be the best opportunity for you to begin that journey? Baby steps are totally okay, and a baby step could be simply, let's offer extended warranties, or let's offer repair services, but you also want to ensure that you just don't remain at those baby steps.

Greg: I would encourage more like a long-range plan. So, what would year one look like? What would the first three months look like, for that matter? But then, what does three years out look like? We could say maybe five years, but the world certainly changes a whole lot in five years, so most of the time, I would encourage just get to three years, and then go from there and you're probably going to be in good shape.

Greg: But I want to bring all this back to the fact that I could say, hey, do this or do that for any given company or any given advice, but it really depends on what market you're playing in and your customer needs. My best advice would be understand your existing customers' needs, but also understand your market, and there's many ways of doing that. I mean, talk to your customers. You could bring someone else in to help you facilitate that through a third party, if need be, or you can simply go old school and write it down on a sheet of paper, and then start to analyze it for yourself, and then bring others in, vet those results; then, begin doing like a Pareto that would say, "Hey, what are the biggest opportunities?"

Greg: Lastly, let's make sure that you don't forget that you're going to have some probably internal barriers, as well as the market may say, "Oh, there's a best opportunity for me, and this is the biggest opportunity that my customers need," and maybe that looks like, "Hey, I've got to provide an outcome-based service or a telematics or that sort of thing," but internally, you're not ready for that. Do you have the talent, the skills, the investment?

Greg: So, don't get intimidated by that, either. Just draw a box around that, put it over to the side, and say, "Okay, at some point, we may or may not be ready for something like that, but we can still start our journey." So, identify what has to happen internally for your company, and how you can create that best match to meet your customers' unmet needs.

Sarah: Yeah. You and I were on a happy hour last week, and that's actually kind of what initiated the idea of jumping on and having this conversation for a podcast, but Robin Butler was on with us, and I liked... what he said is, a lot of times, companies get caught up in the plan and lose sight of the outcomes, right?

Greg: Yes.

Sarah: So it's getting clear on, what does this journey look like for us, and what are some of the key outcomes that we want to accomplish, but then being very flexible in the plan for getting there, because that plan is going to evolve. To your point, it could be you need new talent or different talent; you need new technology, different technology; you need different processes; you need different sales and marketing expertise. I mean, there's a lot of layers that come into this, and I think those layers can seem very daunting, but you need to set those objectives and then just be flexible in how you begin achieving them.

Sarah: I think that there's... to me, I've been writing about this space and interviewing service leaders for about 14 years, right? And so, I think that we've reached a general point of consensus among the people I speak with within the industry that this evolution is necessary. Whether you're a strictly service business that is migrating from break/fix work to more of an outcomes-based model, or whether you're a manufacturer that is looking for your path to being more of a solution provider, I think it's a journey that everyone has pretty much signed up for at this point.

Sarah: But where I see a lot of kind of disconnect is... I guess I would think of a few points. I mean, there's the way that the technology providers in this space tend to talk about this journey, which is that it is the future, so let's do it, right? Let's get out there and make it happen.

Greg: Right.

Sarah: It's more slow moving than I think anyone would expect, whether that's the people providing the technology or the companies themselves. I think anyone would acknowledge that it's not an easy transformation because it is very multi-layered, as we mentioned. You talk about, you need to understand what it is your customers are going to be willing to pay for, and then you need to start re-engineering your business in a way that will allow you to provide that from a product perspective, from a process perspective, from a technology perspective, from a sales and marketing perspective, from a service perspective.

Sarah: When you really start digging into what a change like this means, it becomes pretty easy to understand why it isn't something that happens rapidly within the businesses. I think right now we're in this weird sort of limbo between a general consensus of understanding this is the path forward, but a lot of lag in taking that recognition and turning it into actual, tangible progress, right?

Sarah: So, what are your thoughts on that?

Greg: Yeah, that's a really great question, Sarah, and earlier in your comments, it made me think of... I think, at least my philosophy is, I'm a big believer in doing experiments. I totally agree that don't lose sight of the plan, but also don't just go with the plan. The experiments are going to be critical so that you know how to adjust, and it's okay to do experiments, and it's okay to fail at those experiments, as long as everybody is under the context that we're going to try something out, and that's the spirit of innovation. So, that's the first thing that I would say is, don't be afraid to go find those quick wins and to do those experiments.

Greg: But in terms of the lag and what may cause... hey, everybody gets excited, and then all of the sudden, things get stale, for whatever reason... I think there's a lot of factors into that, and as I have, I guess, experienced that in both a mature service industry and a relatively immature service industry from both angles, I would say that, be careful to not do copy/paste. This is really a message to a leader, or those that are trying to spearhead or sponsor the effort.

Greg: If you think that you can go benchmark a company, and then just do everything that that company did, and say, "Well, this should apply to me. It worked for them," that's probably going to be a dangerous strategy. I do think that it's really important to do benchmarking. I always do benchmarking, but you'll have to take that into context. I've seen, I've at least witnessed, before where a company will take and say, "Oh, well, this company did it; they're sort of in the same space we are. They did it his way. Let's just do it that way." What happens is you begin to lose sight of your customers, your specific market niche, and your needs, and what your own abilities are that I alluded to earlier, and when you do that, people get frustrated.

Greg: You may not be organizationally set up to do that. You might not have the talents, nor the technology to set up to do all of those things that the benchmark company that you just looked at did; and so, that typically brings forth pause, and then when pause comes forth, then people begin to say, "Well, gee, I don't know if this is actually going to work or not," and then the economy gets bad and you say, "Well, gee, I can't place my bets into servitization anymore. We're going to have to double down on our core business and make sure that we hone in on that."

Greg: And so, that's at least been some of the things that I've seen across the industry, and the second piece of that really boils down into leadership, too. You have to think about, do I have the right leadership? Is there a steady hand in all this? These things play together, and you don't have to have all the best industry experts to do it, so I'm not really saying that. I'm simply saying that let's make sure that your leaders understand enough about that path and that journey of servitization that they can support that, that they can be the ones that can be that foundation, because if the foundation cracks, then the house falls, so you have to be careful about that, too.

Sarah: Yeah. Okay, I want to go back to a couple of those points.

Sarah: First of all, I think the point you brought up about not being able to mimic anyone else's success is a really important point, because in this industry, if you look at what I do, what Future of Field Service is intended to do, it is to share best practices. It is to share lessons learned and road maps and paths to success and all of that, and I think that is important, but to your point, on this journey, in particular, it is very tied to the two points you brought up: what exactly are the services and outcomes that your customers are willing to pay a premium for, and what are your unique characteristics and unique value proposition that you can bring to the market, and where do those intersect, right?

Greg: Absolutely.

Sarah: To your point, that is not going to look the same for any one business, for any one industry. So, it is very much a unique path and a unique journey; so you can look to others for inspiration and for certain best practices and ideas, but that will never be a replacement for any one company doing the work of finding that intersection themselves. So, I think that is a very good and a very important point.

Sarah: The other thing you brought up in terms of leadership that I think is another really good piece of advice is, I think to really make progress on this journey, I think you need both visionaries... so, I think you need people that understand why this path is so important and can create a vision for how to bring a business to this endpoint... but I think you also need some strong operational expertise, because I think another area where this gets really slowed down is... if you think about doing the work of determining that intersection between customer demand and company expertise... so, you do that, and you have this vision for where the company can go and how it can evolve into servitization, but there's a lot of muck that you can get bogged down in, in wherever you are; whether it's A to Z or F to Z, or however long you need to go to reach that vision, there's a lot of real process and operations-related work that needs to be done, and in my experience, I don't think that those visionaries are often really good at the execution work, right?

Greg: Right.

Sarah: And so, you need to marry those two pieces of talent, I think, to ultimately achieve success. You need visionaries that can really think outside of the box and be innovative and do some of that work to determine where you are headed, but then you need people that can turn that into process and strategy and a plan for how you can get there, so I think that's another really important point.

Sarah: The third thing you mentioned that I wanted to go back to, and see if maybe you could talk through an example of, is the idea of experimentation. You simultaneously need to be working kind of your three year plan... what's the vision and where do we want to go... but you need to be getting those small wins along the way to kind of build that momentum. So, I don't know if you can think of an example to share of, what would an experiment on this path... what's an example of what that could look like?

Greg: Sure. I should probably give a couple. So, one would be more operationally, because a lot of times, when we think about service, we think about the experiments that we need to do on the day-to-day or to repair a break/fix, and then the other would be more around our offerings. But one example would be, in one of my past roles, we had a number of locations that were really afraid of the idea of doing triage with express service, so in some ways, that is a service offering. It wasn't positioned as a service agreement, so to speak, but just a way of doing business.

Greg: The thing about that is, when you think about that, it really changes the flow of the operation, and so changing the flow of the operation gets kind of scary when you've been doing something for, who knows, five, 10, 25 years the same way. One of the success points that we've seen in the past is, why not just experiment with introducing that? It doesn't have to be full-blown out of the gate. Perhaps you can try it from the hours of 10:00 to 2:00, and therefore, it might be a lighter part of the day, and begin getting your service coordinators, your folks that are handling that flow, accustomed to it. Then, where you see the wins, make sure that you highlight those wins. Track your progress. Have some form of measurement that would say, did I do better today versus yesterday? And so, that's one type of experiment. I mean, there's many that could be out there.

Greg: In terms of service offerings, I would say that, consider a company... and this is probably more on the immature side... that has a service agreement business, and maybe that service agreement is a preventative maintenance; so, you are doing preventative maintenance once a quarter, and you have this great idea that on my journey, on my road map, I want to provide more full comprehensive services and comprehensive service solutions. Maybe it's a monthly type of service or bill that you're doing for customers.

Greg: Again, you don't necessarily have to jump completely off into the pool and do that right away. There are ways to where you can evolve that preventative maintenance service agreement into more of a comprehensive-type service agreement just by adding a few features and functions, maybe changing the way that the billing is; instead of doing it once a quarter, maybe that's the first to once a month. But perhaps you may want to be looking at, "Well, for preventative maintenance, I want to do more remote services."

Greg: Again, this is for those companies that may be a bit more mature, and one experiment there is, why do I have to do a quarterly inspection? Why not just do the inspection when it needs it, or when the sensors say that it needs it? Why replace a filter that really hasn't become dirty in three months? So, those are some experiments that you can do with your customers, and make it your own.

Greg: So, that would be a bit of advice. Of course, I'd give some examples of the industries that I've worked in, but brainstorm to where you can do your own experiences.

Sarah: Yeah. Very good. I think it could be helpful, maybe, to just talk through... again, a very generic example, but of servitization on a maturity curve, because I think it can be unclear for some, so just a couple points, depending on the business.

Sarah: So, you begin as a product manufacturer; then, you may shift to the addition of warranties and after-market service; then, you may add preventative maintenance; then, you may migrate to more of an SLA and outcomes-based model, and then I think, the kind of final progression that we see in terms of servitization is to offer product as a service, or to your point, be seen as more of a solution provider than a product manufacturer.

Sarah: So, that's kind of just one example of what this would look like kind of on the evolution from start to "finish." Are there certain areas within that maturity curve that you think companies typically get more bogged down in than others?

Greg: Yeah, that's a great question. I think there's two areas, Sarah. One is, it's quite a bit of a change when you are going from the break/fix to a type of service agreement, whether that's a preventative maintenance type of agreement or a more full-service agreement. That change is a change in philosophy. It is a scary thing for some people to say, "Well, gee, maybe I won't make as much money," or, "Perhaps I have to change the way that I'm billing in the back office for something like that," or, "How do I market myself for that sort of thing?"

Greg: So, there's a bit of sometimes fear involved in making that leap, and that's usually where we see the biggest hump to get through, and so, in my experience, again, it's been bringing them back to, "Let's try some things out. Let's try to do it. Don't be scared to try. If you have fears, let's write them down and let's see how we can draw a box around those fears and minimize your risk, but let's move the ball forward." So, that's one area; so, I think it's moving from that break/fix to more of a service agreement type, or step, I would say, in a maturity curve.

Greg: The second piece is when you are trying to move up the ladder to outcome-based service, or even product as a service, and I think that these two can play together in terms of why there would be a pause or maybe a struggle there. The struggle is going to be because a lot of times, customers are not used to buying your services in that way. So if you're going to outcome-based service, you have to convince a customer to purchase it from you, and sometimes doing that would require a higher level of stakeholder in your customer's organization. So, a CEO or a Director of Operations may totally get it and may say, "You know what? That makes a ton of sense for me. I'm going to increase my up time of my equipment if I do this. My risk is minimized."

Greg: But if you're having that same conversation, if historically, you've been selling to maybe a middle management-type layer... great folks, but they don't have the same priorities or have the same purchasing criteria that perhaps someone higher in the organization may be. So, you really have to target that strategic account and say, "How am I going to propose an outcome-based service appropriately, such that I am ensuring that my customers are getting the win that they deserve, and that I know that I can provide?" Because if you don't, you're going to have folks in the middle saying, "Hmm, not for me. I don't even know how to buy that from you."

Greg: So, that's one thing that I've experienced, has been a struggling point for businesses.

Sarah: Yeah, that's a really good point, and it makes me think, if you look back through the maturity curve, and sort of pinpoint different aspects of that evolution, you can begin to see where different layers of the business come into play. I rambled off earlier some of the different aspects of the business that this shift impacts, from R&D and product to operations, to IT, to sales and marketing. So, to your point, it's also something that's another, I guess, barrier or common challenge that comes up that we didn't touch on earlier, which is... if you're a service function within a business that's trying to servitize without the buy-in of the broader business, it's never going to work, you know what I mean?

Greg: Right.

Sarah: It's not something you can do in a silo. It needs to be a cohesive, strategic decision, and that's because, to your point, it impacts so many different areas of the business, and you really have to have that alignment in order to progress through that maturity curve.

Sarah: I alluded to this in the beginning, but one of the things that I've been seeing in the conversations I've had since COVID came into play is, how this crisis can really speed companies' paths to servitization, and I think that's a result of how customer demands have changed in the last couple of months. I've talked with a number of different businesses that have said, quite frankly, right now, their customers will not make cap-ex expenditures; they want to maximize the lifetime of their existing equipment, because they don't want to make new investments right now. They are putting a lot of big projects on hold, big investments on hold, and so, there's actually been quite an opportunity for businesses to come in on the service side and be creative about how to servitize and how to offer new ways for companies to accomplish those goals.

Sarah: We've seen, really, some significant growth there, and I think that will continue. I think it's kind of a way to spur these companies forth in that journey a bit, to maybe the next step or two, to really meet demands that have changed quite significantly over the last couple of months, and I was just curious to get your thoughts on that.

Greg: Yeah, so I have a couple thoughts on that. In my experience with service, it's a small fraction of the investment that you would have to put forth to get either equal or greater results from, say, investing in designing a new piece of equipment. So, there are many things that you can do for $10,000, $20,000 that can get you a hundred to a half million. That's been my experience time and time again, and so, I think with the environment that's changed, you're exactly right. Leaders should explore that, because again, you could take just a small investment and produce great results.

Greg: Sometimes those investments are in the form of IT or software. Sometimes they're in the form of just getting the support that's needed to push the ball across the goal line, but they're usually not dramatic. They're not dramatic expenses.

Greg: I think the one thing that I have seen over the past three or four months since we've been going through this crisis is, people are now willing to try things, because they have to. Consider we're doing this today. We did the last one in person. We would always rather do it in person, but we have found ourselves some ways to make this work... through videos, through Skype... and yes, other people have done it before, but the majority of people in life have not, and it's forced the equation a bit.

Greg: How does this apply to field service? Well, think about technical support. Think about all the things that some people like me, like you, have been talking about for almost 10 years, with augmented reality, with artificial intelligence, with being able to provide support for technicians. How about remote services, intelligent services? All of those things require the types of technology that today, we are... I would say, in a more mass scale, people are beginning to use.

Greg: And so, that sometimes forces people to get a bit more comfortable with things. I would never have preferred it to have occurred this way, but certainly, as a result of the economy being down with the COVID situation, it has required some people to work differently, and I know people that have came to the office every day for many, many years, and the day that the office shut down and they had to work from home, they were really just lost. It required a lot of setup, it required a re-thinking of how am I going to work, and I read an article that you put out not too long ago about that very situation.

Greg: These are some things that we can apply into the soup of, how do we do service and make that more of a reality? So, I do think that it has accelerated the process a bit, and we probably won't even know it for a few more months to come, but as we look back, maybe a year from now, and we would say, "You know what? Because I did that Skype meeting or Teams meeting or Zoom meeting, or now that I had the opportunity to experiment with remote services, my texts are a bit safer. I can provide real-time support to them." Those are the type of things that I think may become an outcome of this unfortunate situation that we're in.

Sarah: Yeah. Yeah, I think service organizations are in a unique situation right now where both customers are more willing to do things differently as a result of what's happened, and so are employees, right?

Greg: Yes.

Sarah: And so, it is a time that I think there's a window of opportunity to make some significant progress with change more quickly or more easily than you could have six or 12 months ago. So, it will be interesting to look back and see.

Sarah: Last question for today: just any other thoughts or comments or advice you have on key aspects of what it takes to achieve servitization success?

Greg: Yeah, so as I reflect upon that, number one is look at your customers' unmet needs. Make sure that you understand what it is in your market that people are thirsty for. What is it that... the problems that they need to be solved? Do you have the ability to solve them, and if you don't, what type of things would you have to do? Map those out. You don't have to shoot for the moon in the beginning, so map it out. What would be some easy wins, a targeted approach, and consider it like climbing a set of stairs; so I've got to take step one and then step two... whatever that may be for you, but it needs to start in your market with your customers and make it your own.

Greg: I do encourage benchmarking, because you can learn a lot from that... best practices... but again, come back to making it your own. That would be certainly one thing, and I think that also keep in mind that sometimes this shift can be significant, so I think that that really depends upon your approach, but it is a significant change, but you don't have to make it to where it's unfathomable. You can make it where it's obviously something that you can do right away.

Greg: I would also not get discouraged with all of the hype around, you have to have certain IT solutions, you have to have all the latest and greatest stuff that's out there. Those are certainly important enablers, but you have to apply them for where you are on your journey. So if you're just getting started, if you're just a product manufacturer, and you want to take that first leap, you don't have to go spend millions of dollars in IT. Work your process out, make sure that you can do some things and try some things, and then understand where those things come along the journey. It's where to play and how to win, and how do I get there? Those are the top things that I would say upfront.

Greg: I would put a bow on that, and I would say whatever you do, track your progress. It's important for you and for your people and your customers to see the wins, and if you're not tracking the way that you should, make those adjustments. That's really important. Identify your own KPIs. Make it visual. Put it on a board. Put it on a computer screen for people to see. Know where you're winning, and know what adjustments you need to make to ensure that you are on a winning path.

Sarah: Yeah. That's really good advice. I appreciate that, Greg. I always enjoy speaking with you, and I really appreciate you joining us today and spending some more time with us, so thank you again.

Greg: Thank you. It's been great.

Sarah: You can check out more of our content on servitization, outcomes-based service, how companies are managing COVID-19, and much more by visiting us at www.futureoffieldservice.com. You can also find us on LinkedIn and Twitter, @thefutureoffs.

Sarah: 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

In the span of a few short months, our world has become more virtual than it has ever been. For service organizations, this means not only work-from-home scenarios across functions but also the need to provide remote service to customers. As such, companies have turned to digital tools to allow employees to stay connected to company leadership, employees to stay connected to one another, and for customer communications and service to remain intact.

We’ve discussed many themes this evolution brings about, including accelerated digital transformation, a speeding up of Servitization and outcomes-based service approaches, and lessons in virtual leadership. One topic that was brought up to me recently that we have not yet discussed, however, is how this rapid uptick in remote connections is significantly increasing the need for more robust cyber security initiatives. Whether data is being transferred within the company, or to and from customers, rising remote connections and more data transfer equal greater security risk and it’s important to address that fact to protect your company, and customers, from harm.

I came across an article recently from Umesh Yerram, Vice President and Chief Data Protection Officer at AmerisourceBergen that presented some excellent points on building a purpose-driven security organization. As service organizations ramp up cyber security efforts, ensuring you have the right skills, structure, and processes in place are all imperative. Below are five important pieces of advice Umesh shares based on his experiences:

#1: Aligning with organization’s purpose. “Most of the security practitioners are very technical resources and enjoy dealing with bits and bytes. But if those same security practitioners internalize organization’s purpose and understand how their daily activities contribute towards meeting their organization’s purpose then it increases their productivity, sense of ownership and job satisfaction. Every member of the purpose driven security organization should have the same goal regardless of which security team (or any team in general) there are part of,” says Umesh. “For example: healthcare security teams should understand how their role & responsibilities contribute towards positive outcomes for their patients or security teams in other industries should understand how their roles and responsibilities contribute towards their customers’ experiences when using their company’s products and services. Once that understanding is crystalized then security teams are more focused on contributing towards organization’s purpose than just bits and bytes.”

#2: Break down silos. “Over the years each information security area – IAM, GRC, Data, Cyber, Awareness - has become more complex and challenging. However, every area is not independent but contributes towards the greater goal of securing the organization to meet its purpose. Security teams tend to focus on complex projects within their areas without learning about the other security projects and gaining a good understanding on how all those projects fit into the overall big picture,” explains Umesh. “Breaking these silos constantly enables the security teams to understand the big picture and how their efforts contribute towards the overall goal to serve its purpose. Whether it is opening individual team meetings to all security team members or using monthly town halls to help reinforce the interconnected nature of the projects will enable collaboration and seamless integration of different security capabilities.”

#3: Hire the heart, train the mind. “There are millions of open information security roles due to lack of skilled information security professionals. Information security teams must think outside the box to hire – System Administrators, DB Administrators, Application Developers, Veterans, Communication majors etc. - and focus on hiring diverse, smart resources who have the right attitude and eagerness to learn,” says Umesh. “Technology changes rapidly, therefore, if you focus on hiring resources based on current skills then those skills will be outdated quickly. However, if you have the team with the right attitude and appetite to learn new technologies quickly then they will constantly upgrade their skills and continue to serve the purpose long term.”

#4: Build a sustainable winning roster. “Like every NFL team, every security organization has a cap when it comes to building its roster. Security teams can take a leaf out of NFL roster building playbook (no pun intended). Building a security team with experienced veterans along with new experienced hires (free agents) and fresh graduates (rookies) is a winning combination. This is model will help new experienced hires and recent graduates to assimilate with company culture and learn from proven veterans while building a team for the future without missing a beat to serve the purpose in the long run,” suggests Umesh.

#5: Develop a trusted partner network. “Vendor partners are an extension of the team. Building a strategic vendor partner network with those who understand and share your purpose and help you meet that purpose is critical,” notes Umesh. “Vendor partners who are only interested in a transaction-based relationship are not long-term partners and will impact security team’s ability to serve its purpose. Building a strong collaborative partnership with vendor partners that you can leverage to influence their services and products’ road maps to meet your strategic goals will be mutually beneficial and delivers value to both organizations.”

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