Author: joanna.darby@ifsworld.com

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Overcoming the Barriers to Creating Servitization Revenue Streams

May 20, 2019 | 5 Mins Read

Overcoming the Barriers to Creating Servitization Revenue Streams

By Sarah Nicastro, Creator, Future of Field Service

With the journey to Servitization well underway for most service organizations, there seems to be one major challenge standing in the way of reaping its rewards: creating new revenue streams. At this year’s Field Service Palm Springs event, this challenge was of the most talked-about topics among attendees. Numerous times throughout the four days I heard a service leader ask, “How are you making money doing that?” Rarely was an answer offered.

Why is it that companies are struggling with creating revenue through Servitization? I think there are a few different reasons, but before we dig into those, let’s first discuss the progress that has been made in the industry. A year ago, at this same event, Servitization was being discussed (mostly be vendors) as a forward-thinking notion. In that one year, so much has changed. Servitization is now being embraced as a concept by nearly all service organizations and in practice by many. Companies have come to understand that the path into the future of service is far different than the road that has gotten us to where we are.

Progress on the Path to Servitization

I believe there’s a common understanding among service organizations that truly the only means to achieve success from this point forward is to authentically achieve and maintain a customer focus. Organizations realize that customer intimacy and a deep, rich understanding of what customers both need and want is critical not only to be able to deliver competitive service in today’s landscape but to be able to ultimately develop those next revenue streams. Organizations also accept the fact that Servitization cannot be achieved without operational excellence, and this means both streamlining and optimizing processes as well as investing in state-of-the-art technologies that are essential to meeting today’s pressures. Finally, companies are grappling with the idea that what has historically been a very slow-moving, often laggard industry needs to quickly transform itself to a more agile, innovative one. This means an evolution of strategic initiatives, business models and offerings, functions and roles, and for most an overhaul of the technology used to manage it all.

The Potential for Monetizing Servitization

While the evolution to Servitization isn’t exactly simple, it is inevitable. If that isn’t reason enough to embrace it, the potential it brings to grow revenue should be. For most companies, there are two primary opportunities to create additional or new revenue through Servitization:

Delivering outcomes. As companies move away from reactive, break-fix service and move toward predictive service capabilities, the value proposition for customers is immensely amplified. You are no longer providing a service but delivering an outcome. Getting to the point of avoiding the need for a customer to call you requesting a repair is a level of value that most customers would happily pay more for. It’s up to you to take advantage of the experience economy by repositioning your service offering as an outcome – a guarantee that your customer can remove that source of worry and work from their plates and just know that things will be taken care of.
Offering insights. Data has become the most valuable asset there is today. Service organizations with connected assets often default to thinking about how that data can help their service operation be more effective and efficient – from the standpoint of enabling that predictive service. However, there’s a whole new world of revenue opportunity when you begin thinking about how the data you are collecting (or can collect) can benefit your customers. Equipment usage data that helps you detect fault patterns and avoid failures can also provide valuable perspective for your customers on usage, consumption, peak times, and so on. Organizations that begin thinking outside of the box of what service they can provide and begin thinking about what insights they can provide expand the potential for revenue opportunities.

So, What’s Holding Companies Back?

This all may sound simple so far, but as I said at the beginning, the reality is that most companies are struggling to realize revenue gains from Servitization. If I think about why this is, a few barriers come to mind:

The concept of Servitization is a seismic shift for companies. We must recognize that the evolution underway in service is truly transformative and it takes time for companies to determine how to adapt. I think the first major barrier is that some organizations are having difficulty developing and articulating their vision around Servitization. In many cases, this stems from not having a great grasp on what those customer needs and desires are, and organizations must start here. This lack of vision can also be attributed to leadership that is more comfortable maintaining the status quo, which is a stance that needs to be fiercely challenged if a company wants to remain relevant.
Servitization success requires strong foundational technology that many organizations lack. You simply cannot deliver on the value of Servitization without having strong foundational technology in place. Many companies are struggling to modernize as quickly as they need to in order to progress with the pace of customer expectations. This goes back to agility being a new concept for most service organizations, and it’s important to work on being more nimble both in selecting as well as deploying the tools you need to deliver outcomes.
Change management remains tough to tackle. Change management is a topic that has been covered time and time again and in countless ways, yet it remains top of mind for service leaders. From the top down, this level of business transformation requires a lot of work on not only developing but articulating that vision and then re-creating a company culture that is more aligned to the new and future way of operating. Change management, while conceptually straightforward, remains incredibly challenging for companies to tackle effectively.

Companies lack confidence in their Servitization value proposition.

At the end of the day, service and sales are now closely intertwined – and as a function that historically hasn’t had a major sales aspect to it, this is a struggle. I think that some companies have an offering that they could indeed monetize and simply aren’t doing so because they don’t know how to articulate their value proposition to customers. Ultimately, to achieve success in creating Servitization revenue, organizations must get comfortable and become confident not only in creating but also pitching offerings that they know their customers find value in (because they’ve asked).

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TDC’s Mission to Minimize Vulnerability, Maximize Competitive Advantage

May 16, 2019 | 4 Mins Read

TDC’s Mission to Minimize Vulnerability, Maximize Competitive Advantage

By Sarah Nicastro, Creator, Future of Field Service

For 130 years, the TDC Group has been delivering innovative communications solutions that link Danes more closely together. Brands in TDC Group include YouSee, Telmore, Fullrate, Blockbuster, Dansk Kabel TV, CubeIO, Get and TDC Erhverv. TDC Group is working toward a vision it refers to as ‘Digital Denmark,’ in which the company is committed countrywide connectivity and digitally educating citizens with the ambition to become the leading infrastructure operator and the best service provider.

To accomplish these objectives, TDC recognizes the need to invest in digital transformation – both in technologies themselves as well as new digital skill sets that will lead the company forward. In the company’s 2018 Annual Report, CEO and President Allison Kirkby says, “TDC Group is committed to investing in building the infrastructure and assets that will provide us with sustainable, long-term competitive advantages.” As with many other industries and across many parts of the world, one of the major challenges for TDC is qualified talent to lead this charge. The company knows that its digital transformation requires the recruitment of more employees with digital competencies, yet there is a threatening lack of these profiles in the Danish labor market. In an effort to alleviate this problem, TDC co-founded Digital Dogme. The company is working to upskill its employees with the digital competences needed for the future as well as attracting new talent.

A Focus On Field Service

Modernizing its field operations has been an important aspect of TDC’s digital transformation efforts. The company employs a field force of 1,000 technicians with 45 highly skilled and incredibly knowledgeable dispatchers that schedule more than 1 million tasks per year. “For an operation of our size and complexity, relying on a team of highly specialized dispatchers puts us in a very vulnerable position,” says Mads Frølich, Product Owner at TDC. “This fact, along with our need to be more efficient and to be able to accommodate mounting customer pressures, led us to the deployment of IFS Field Service Management.” During its solution evaluation process, TDC focused of course on value but also on finding a company that it felt was equipped to meet its demands. IFS appealed to TDC based on the FSM solution functionality, but also based on the company’s stability and reputation for being customer-centric. “We set our expectations high,” says Markussen. “We needed a partner that would embrace that.” With its solution selected, TDC began configuration and integration which included a thorough process review and update. Deployment of FSM began in early 2018 and is ongoing. “It’s been quite a journey,” says Mads Frølich, Data Analyst at TDC. “Learning and training takes time, and managing change is at least as big of a project as the technology itself.”

The Change Management Imperative

TDC started its change management efforts early, working prior to the project’s start on gathering experiences from technicians and dispatch to ensure the solution selected would meet their needs. “We knew that the mobile solution needed to map to our technicians’ work versus forcing them to adjust to a new workflow,” says Frølich, “and dispatch was instrumental in defining how we’d configure IFS FSM and PSO.” As deployment began, TDC established a “war room” at each location where they’d hold daily meetings surrounding go-live. “The war room gave us an opportunity to thoroughly evaluate our progress, and to collect feedback in real time. It was key in us being able to appropriately gauge the happiness of our technicians as well as our customers’ reactions,” says Frølich. TDC enlisted the support of its frontline workforce to assist with change management and solution adoption. “We worked to identify super users, based on skills and willingness, who were trained ahead and then worked to train their peers,” adds Frølich. “This process, along with relying on regions that have successfully deployed to tell the tale of the value themselves as ambassadors, really helps in fostering acceptance and adoption. The message coming from peers really resonates with the workers more so than just classroom, directive training.” Markussen and Frølich urge others to keep in mind that change management is an inevitable, natural part of the process. “Change management is a process itself, and you can’t control it,” says Markussen. “The average age of our technicians is 50+ - and we’re asking them to adjust from complete control over planning their own day to an automated drip of tasks. This is a major adjustment and its natural to experience some resistance, but I will say once they are over the hump they do grow to like it.”

Preparing For The Future

TDC’s investment in IFS FSM is building a strong foundation for its field operations that will set the stage for the future. Already the company is better able to accommodate non-standard or into the schedule, and the company anticipates that it will ultimately see a reduction in travel time and better SLA compliance as well. TDC is working to mitigating risk by putting a solution in place that will reduce the need for manual intervention from the dispatchers, so that the company can better utilize the skilled dispatchers and reduce vulnerability of tribal knowledge. By focusing on the digital transformation of its field operations as part of the company’s broader objectives, TDC is setting the stage for further automation that will help the company better serve its customers and achieve competitive advantage as it strives toward Digital Denmark.

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KONE America's CEO Larry Wash Shares Innovation Insights

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KONE America's CEO Larry Wash Shares Innovation Insights

Larry Wash, CEO of KONE Americas, provides an engaging look into what it takes to truly build a culture of innovation. KONE has been recognized by Forbes as one of the top 50 innovative companies in the world, and it’s clear why.

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5 Steps for Understanding How Customers Develop Their Perceptions About Your Brand

May 13, 2019 | 3 Mins Read

5 Steps for Understanding How Customers Develop Their Perceptions About Your Brand

By Hamdy Michael Ayas

Delivering superior experiences to customers has many benefits for optimizing returns on investments and it can be a significant value adding factor. For example, it can lead to achieving a competitive advantage from the branding level. In addition, through the experiences of customers, a powerful positioning can be established for being perceived as the best of class in service.

This requires a strong understanding of how the customers want to experience their journeys of interactions with the organisation as well as acting effectively upon this understanding. Understanding the way that customers develop their perception about a brand leads to ways of managing their perceptions and delivering superior experiences. But how is it possible to structure the way that customers develop their perception about your brand?

Defining interaction touch points with customers: Every touch point of interaction between a brand and a customer contributes to forming the total experience that a customer will have. A Touch Point, as an interaction instance of a customer with the brand, can take place in many ways, from simple/obvious instances to well-hidden effects.
Creating superior experiences: Transforming your offerings from unidimensional products/services into comprehensive experiences enables the delivery of significant added value. For example, a sportscar, can have two engines with the same output. A smooth continuous sound from the engine can give the perception of stability and power but on the other hand, a rough and intermitted sound might give the experience of an old machine and set lower performance expectations. In terms of perceived value however, the rough sound can be associated with vintage machinery. In combination with other experiences of similar associations during the interactions journey of the customer this can result to a superior driving experience.
Giving some ownership of the interactions to customers: Every touch-point of interaction consists of a two-way communication and the input of the customer is crucial to be heart. For example, two questions that a field engineer can ask prior a visit, have an equal meaning but lead to very unequal results in terms of customer satisfaction. Getting the opinion of the customer and deciding together the date of a visit by using “When would you like us to be at your site?” develops a superior experience than just informing the customer that “We can be with you earliest on Friday”.
Traveling the customer journey: Usually, a customer is going through several interactions with a company/brand during an experience and there is an entire journey of interactions that determines the customer’s perception. For example, a customer navigates on the website to find information, comes in contact to submit a request, receives a service, uses a piece of equipment and so on.
Anticipate what customers expect in every interaction: In a Customer Corridor, during the end-to-end set of interactions that the customer has with the organisation, a set of expectations setting takes place. Most importantly, the way that the organisation interacts creates a set of responses on these set expectations and the customer’s perception of the organization’s brand is determined by meeting or failing to meet these expectations.

Therefore, offerings by themselves can create value but they are not enough to create customer delight. Customer delight is created by successfully playing the game of setting the right expectations for the right price and then exceeding these expectations. And setting the right expectations in a precise and systematic manner needs the development of value-driven operational qualities.

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Field Service Used to Be Easy: How Spencer Technologies Uses Data To Adapt

May 9, 2019 | 4 Mins Read

Field Service Used to Be Easy: How Spencer Technologies Uses Data To Adapt

By Sarah Nicastro, Creator, Future of Field Service

Founded in 1972, Spencer Technologies has grown to become a global company with more than 500 employees and 200 technicians throughout the United States, Canada, Mexico and Europe. The company provides project management and technology services to support retail stores and multi-site organizations.

I had the honor of interviewing Rudy Goedhart, Business Intelligence Director at Spencer Technologies recently at the IFS 2019 InFocus Group customer training and education event. Spencer has been an IFS Field Service Management™ (IFS FSM™) customer for more than seven years and Goedhart’s role is focused on leveraging the data the solution provides to make the company more efficient and to keep its customers happy. Everyone in the room chuckled when Goedhart exclaimed, “Field service used to be easy!” What he went on to explain is that historically, customers were really happy to hire Spencer in to do a job, have the work completed, and receive a bill. Period. Over the past couple of years, those expectations have evolved dramatically. “In today’s always-on world, customers demand insight. We realized about 18 months ago that we weren’t giving them enough information – they wanted more from us, and we needed to better use our technology to deliver,” says Goedhart. “Customers want to know, at a glance, how we’re performing against our SLA, how long the technicians have been on-site, the reason for any delays or re-visits. They want to check in continuously to get that status update and know everything is happening as planned.”

The Foundation for Critical Visibility

IFS Field Service Management™ (IFS FSM™) intelligently manages Spencer’s overall service lifecycle, helping the company to optimize all processes and touch points and deliver seamless service while placing its focus on customer satisfaction. With IFS FSM, Spencer can connect project, work management and task execution in the field as well as centralize the management of resources, projects, and associated requirements while reliably capturing field data remotely. Spencer has the ability to specify service deliverables including response times, coverage schedules, bill schedules, PMs and escalation rules. With IFS FSM as its system of record, and through using the customer portal functionality, Spencer is able to provide its customers with the continual flow of information they’ve come to expect.

3 Critical Data Applications

Goedhart categorizes Spencer’s use of data gleaned from FSM into three equally important categories: internal, customer-facing, and to minimize vulnerability. Internally, Spencer communicates progress on key KPIs continually at all levels of the organization. “We use the lobbies functionality of FSM to deliver the appropriate data to each function: leadership sees a certain set of data, technicians see another, and shipping and logistics functions see yet another,” says Goedhart. “Each view is customizable, but the point is that at every level of the organization, insights from the system as it relates directly to key KPIs are being communicated on an ongoing basis. This ensures we are all aligned as a team on what’s most critical at any given point as well as how we’re performing as individual functions and as a company overall. This level of visibility has helped us to avoid numerous escalations, which saves us time and money and keeps our customers happier.” The customer-facing data is what is newer for Spencer, born out of those increasing demands for information. Through reporting and the customer portal, depending on customer preference, Spencer is able to use insights from FSM to keep its customers in the know on what is most important to them. “All our customers have real-time visibility into our FSM system of record with real-time reporting,” says Goedhart. “Being able to deliver the level of insight our customers want using FSM has become a competitive differentiator for Spencer.” Finally, Goedhart notes that data has come in handy in terms of the company being able to protect itself and minimize vulnerability. In the instances a customer issues arises, one that perhaps historically would’ve resulted in a loss of billable hours, Spencer now has the evidence of service delivered to fall back on as needed.

Words of Wisdom

Goedhart shared some valuable insights with the crowd based on what he’s learned in the last 18 months as Spencer has taken on this mission to better serve its customers with data. First, he urges you to consider the value of the data you’re sharing – whether internally or externally. “If you’re sharing data, whether with employees or customers, it absolutely has to be both meaningful and actionable,” says Goedhart. “If it isn’t, it’s just noise – and that noise will cause confusion and frustration.” Finally, Goedhart suggests taking control of the narrative around data with your customers. “Make suggestions and offer choices instead of asking open-ended questions,” he says. “If you tailor the information to each specific customer and start over each time asking what is needed, it will cause a lot of wasted time and energy. Customers are coming to you because you know the business – show them that by offering them what they need. If you can anticipate needs and offer solutions that fit those needs, 99% of the time your customers will be happy with the standard offering you’re suggesting. But you have to control that narrative – otherwise you open yourselves up to too much input and not only endless but unnecessary customization.”

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Maximizing the Value of Augmented Reality in Field Service

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Maximizing the Value of Augmented Reality in Field Service

Marc Robitzkat, Global Director Marketing Technology at Diversey, chats with Sarah about the company’s mission to leverage technology as a differentiator and discusses the value Augmented Reality holds for field service organizations.

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A People-Focused Approach to Technology Strategy

May 6, 2019 | 4 Mins Read

A People-Focused Approach to Technology Strategy

By Charles Hughes

We like to think technology can solve any problem and improve any bottom line. But have the newest TVs ever made us smarter than good, old books? Why is it that after almost 50 years of aerospace technological advancement, it is still incredibly hard to fly a human to the moon? Technology alone is rarely the entire solution.

Technology needs to match the problem and fit the human using it. Nowhere is this truer than in a field service organization. The field service technician is the most important and most complex piece of a field services support model. Therefore, as the center of the services ecosystem, technology needs to be built around them. No system or application can replace human decision making, intimate customer knowledge, and an intuitive ability to satisfy customers’ needs. Done right, with proper training, technology can be a force multiplier. But it starts with people doing their job well. Military leaders use the term “force multiplier” to describe the effect of adding a capability to a team that exponentially improves the likelihood of success of the mission. Sometimes technologies demonstrate how a whole can be greater than the sum of its parts. When army infantry units are given mechanized vehicles, their maneuverability and speed are greatly improved, allowing the unit to cover more ground more quickly. Now add an armored company to the mix and you have increased firepower allowing the unit to defend or attack more aggressively. An army of 100 can challenge an army of 1,000 less well-equipped soldiers.

How To Use Technology As a Force Multiplier

Technology can be a force multiplier for your field services organization, but only if your team understands that tools do not substitute for service, they merely enable it. Moreover, technologies require training and acquired skills. Like a military unit, you must develop a well-trained team of professionals that are dedicated to the mission of delivering outstanding field services support to their customers. Develop that underlying culture of service first, and then start overlaying technology to increase the service power of the team. Field services organizations that look for a silver bullet to solve their service capability problems quickly find themselves automating poorly-designed processes, masking a training issue or resource constraint, delivering poor service more quickly and at an unnecessarily greater cost. You can provide a poorly-trained field technician a mobile device and it may make them more effective than not having one, but you won’t see the same jump that you would if you gave that same device to a well-trained and capable field engineer. Training and skills yield the return on investment, not the mobile device. Giving a scheduling engine to a poorly trained field technician will only get them to the next appointment, not prevent appointments that would have been unnecessary had the problem been fixed on the previous meeting. Having integrated inventory management and ordering empowers poorly-trained field technicians to order unneeded parts more efficiently. You will quickly find that investing in the training and development of your people provides a greater return on your technology investment. Once you understand the capabilities of your team, you are better positioned to deploy technology to create new service offerings, increase service levels, and generate more capacity. Develop an integrated roadmap that starts with a foundation supporting the long-range vision. For example, if your field technicians are not mobile, consider a mobility system to get them started. Determine if your mobility strategy (short or long term) should include schedule optimization, workflow management, inventory management, and data analytics. Should you purchase an off-the-shelf solution or develop one internally? Should you roll out a major release or used a phased approach? Seek to understand how your people will utilize and adjust to the technology. Don’t assume all team members will welcome technology with open arms. Capable team members may feel they don’t need the technology while less capable team members may fear the technology will expose their weaknesses. You may discover there is significant training or a culture shift that needs to occur within the team to prepare them for technology. The particular needs of each field service team may differ but consider your service offerings in conjunction with your technology choices. Now you are ready to develop a cohesive technology strategy and see a higher return on investment. Don’t forget the impact on your customers when developing your technology strategy. Technology tools that make life easier for your field technicians should not make it more difficult for your customer. Anything you deploy that makes it easier for the customer to request and receive service or stay updated on the status of their service request should be well received. If your solution causes the customer to change how he does business or requires incremental effort on their part, then be prepared for unhappy customers. Technology may seem the panacea to what ails your organization, and it can be an effective force multiplier, but don’t let it become a band aid for a systemic issue in your organization. Take steps to ensure your people are capable of effectively utilizing technology to improve their service delivery capabilities. This people-focused technology strategy will give you the edge on your competition and maximize your return on investment.

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My Top 3 Observations from Field Service Palm Springs

May 2, 2019 | 3 Mins Read

My Top 3 Observations from Field Service Palm Springs

By Sarah Nicastro, Creator, Future of Field Service

Last week was spent in sunny Palm Springs taking notes on the top-of-mind trends and themes among service leaders at Field Service Palm Springs 2019. There was great energy at the event, a very well-done production by WBR. I had the opportunity to connect with old friends and make some new and I was fortunate to participate in and listen in on some interesting sessions. Before this week of post-travel catch up gets away from me, I wanted to share three points that I found notable at the event.

#1: The Elevation of the Service Industry is Apparent

One of the things I noticed most is how much more of a conversation this year’s event was among attendees. In year’s past, you’d have a handful of really innovative organizations up on stage talking about their initiatives – and a whole room full of attendees looking up at them thinking, “huh?” Maybe not quite – but this year there was a stark contrast to the division among leaders and laggards at the event. Rather than many learning from few, everyone was learning from one another.

This change illustrates the elevation of the industry – the fact that overall, service is becoming more strategic, competitive, and for many organizations a key differentiator is exciting. This evolution resulted in delegates that were all somewhere along this service transformation journey, and all active participants in the exciting conversations happening at the event.

#2: All Paths Lead to Servitization

Servitization was arguably the key theme of the event. The idea that companies can no longer just sell and service products, but rather need to level up and begin providing outcomes and experiences was front and center in the event’s content and conversations. The vast majority of those in attendance are in full agreement that this is the future and are at varying points on the journey of figuring out how to master this within their organizations.

Sub-topics under the general theme of servitization included the criticality of customer centricity and exercises like customer journey mapping and VOC (voice of the customer), how best to communicate new offerings to customers, the challenges around how to charge for new/different services, and the need to adopt the latest technologies to be able to keep pace with customer demands.

#3: Some Topics are Timeless

Over and over again at the event the themes of change management and soft skills came up – truly in almost every conversation I was a part of. I know it can seem like these are topics that have been covered time and time again, but they are critical to what the attendees are looking to accomplish, and it was clear organizations of all sizes in all industries still struggle with these aspects.

If you think about it, it makes sense – there is a greater, deeper change at play in this industry than ever before. Organizations aren’t just asking employees to adopt a new tool – they’re asking that, but along with adopting an entirely new way of doing business. One that involves new and different interactions with the customers, and therefore necessitates more sophisticated soft skills.

Each of these observations from the event – and more – demand their own deeper dive, so keep an eye out for more coming soon.

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5 Detrimental Digital Transformation Missteps

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5 Detrimental Digital Transformation Missteps

Greg Lush, previously VP of Innovation at EMCOR and master of all things digital transformation, recently launched consultancy Last Mile Worker Solutions. In this episode, Greg joins Sarah to discuss some of the common traps that can outright derail your digital transformation initiatives.

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