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February 14, 2020 | 4 Mins Read

The Biggest Obstacle to Outcomes-Based Service

February 14, 2020 | 4 Mins Read

The Biggest Obstacle to Outcomes-Based Service

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By Tom Paquin

Arguably the most high-profile trend in service management today has been the transition from traditional break-fix models towards outcomes-based contracts. This means that rather than treating service like an insurance plan, or charging for parts and labor only after service has been delivered, organizations are building contracts based on things like uptime, output, and time to resolution.

The benefits of this new approach are obvious—you’re creating contractual revenue, providing a value-add to your customer, and you’re turning service into an engine for business growth rather than a tabulation of expenses. You’re also benchmarking technician performance against the business, which means higher technician utilization, faster turnaround, increased predictive outcomes, and so on. That’s better than a win-win. It’s a win-win-win-win-win.

So why are only 28% of organizations currently employing outcomes-based service? According to research recently completed by Strategies for Growth for IFS, while only 28% of organizations have some variation of outcomes-based service today, an additional 32% plan to employ outcomes in their business models soon. Those 32% of firms are at some point of the journey, which for many, might be a surprisingly long road. What might be holding them up?

That same research gives us a picture of some of the challenges, and what was #1 on that list, cited by over a quarter of respondents? The lack of managerial will.

I’ll note that usually when I’ve asked about the biggest obstacle to any new initiative, #1 is always cost, which makes the fact that managerial buy-in is #1 even more significant (cost was a close #2). It makes sense, though, as businesses that lack a service-oriented mindset are quick to say, “Why would I upend my entire product catalog? Why can’t service be left where it is, as a necessary nuisance?”

Those questions ignore the powerful impact that service is having on the economy, which is worthy of a library of articles of its own. No matter what, though, the challenge remains the same—There is a disconnect between upper management and the evolving needs of the service business. So what do we need to do to bridge that gap?

I don’t presume to know all about the political, economic, and shareholder-fueled machinations of the modern enterprise, certainly, and your mileage will no doubt vary, but the question invariably becomes—How do you sell service?

Selling Service

You’re here, reading an article on our service website, so I’m not sure that I need to sell service to you, but perhaps you need to sell it to someone at your organization. The way I started when selling businesses on service was to show the average profit margin of a manufacturer that only offered products versus one that offered both products and services. Usually that gets someone to sit up straight.

Service is a no-brainer today. It’s saving brick and mortar retail, technology and mobility have put the barriers to entry in the basement, and straight down the line it improves business outcomes. If you have service today, an outcomes-based model simply puts it at the center of your business. So how do you pitch it to a management team, or a sales team, or even technicians, who are resistant to change?

The importance, of course, is emphasizing the cross-functional business gains. Sure, outcomes-based service might add a bunch of new SKUs and change the architecture of a sales conversation, but it’ll also add recurring revenue. It might emphasize specific service functions that may not have been priority before, like speed of repair, but in doing so it should actually improve your service business. You can sell outcomes-based service as a way of structure your business around a system that incentivizes better service performance. It’s as simple as that.

The last piece, as always, is the technology. Outcomes makes accurate, bias-free reporting a necessity. It’s the only way that you can offer accurate benchmarks to your customer in the first place. It may sound crass, but you need to dictate the terms of your ouctcomes, and own the system that reports them. The best companies put their own data right in their customers’ hands.

Outcomes-based service fundamentally shifts the nature of what constitutes a product, and this can really frighten a business leader, who is used to seeing something work one way for their whole career. Getting them on board is not necessarily a one-and-done task, but if handled correctly, it has the potential to take your business to new heights.

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February 10, 2020 | 3 Mins Read

The Employee Engagement Myths Holding You Back from Optimal Performance and Retention

February 10, 2020 | 3 Mins Read

The Employee Engagement Myths Holding You Back from Optimal Performance and Retention

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By Sarah Nicastro, Creator, Future of Field Service

I had the pleasure of interviewing Don Rheem, author of Thrive By Design: The Neuroscience that Drives High-Performance Cultures, TEDx Speaker, and CEO of E3 Solutions, this week for the Future of Field Service podcast. He was filled with knowledge, passion, excitement, and thought-provoking points that I can’t wait for you to listen to when the episode is released. In the meantime, I wanted to recap some of Don’s points that really got me thinking. I promise, I’m not giving away the gold of the podcast episode – this is just the tip of the iceberg when it comes to what we covered.

Don started by sharing some of the science he explains in his book, which is fascinating. He revealed that focusing on employee satisfaction is a waste, because it is a byproduct of employee engagement. Similarly, a focus on having a good company culture is all for naught if the individual employees aren’t engaged. Don revealed that employees feel engaged when they are provided an environment and relationships that offer a sense of security and the ability for connection. Regardless of age, personality type, or demeanor, at a base level we as humans have commonalities in what we need from an employer to be engaged. We cover all of this in detail in the podcast, but I asked Don a question in closing around where companies commonly miss the mark when it comes to employee engagement and that’s what I want to share with you here. So here are four myths around employee engagement that could be holding you back from the optimal performance from and retention of your employees:

#1: You Know How Engaged Your Employees Are (Or Aren’t)

“Senior leadership tends to think that they have a pulse on the status of employee engagement within their company, and therefore they don’t need to take the time or invest the money in actually measuring engagement,” says Don. This is a big mistake, because you simply don’t know what you don’t measure – regardless of how tuned in you feel. Don says that measuring employee engagement doesn’t have to be expensive but is a crucial investment in beginning the process of understanding your baseline and determining if, where, and how you need to improve.

#2: Employee Engagement is an HR Issue

Another common problem is that leadership pushes the project of employee engagement measurement and improvement off on HR. “Of course, it’s important to partner with HR on a project like this,” says Don, “but pushing it off to HR altogether sends the message that senior leadership doesn’t care enough to be involved personally in something as important as employee engagement.”

#3: Our Employees Will Become More Engaged If We…

According to Don, one of the biggest employee engagement missteps is not understanding that it pivots around individual managers. The old saying, “employees start companies; they quit managers” is absolutely true when it comes to employee engagement. “Companies make the mistake of focusing on improvements at the employee level, but what is important to understand is that managers play the most important role. When we survey for engagement levels, we see huge swings among teams. It’s the same company, the same culture, and the same pay scale – the variance is almost always caused by managers,” says Don. Therefore, it is critical to focus your efforts on equipping your managers to provide an environment and relationships that foster engagement.

#4: Lack of Engagement Is an Easy Fix

Don says that undertaking an initiative to improve employee engagement isn’t at all worthwhile if you won’t commit to the work needed to make an impact. “This isn’t a passive project, it takes real effort. You have to commit to transparency – you need to release the results of your findings to everyone. Then you need to identify three things you found in the data that you know you need to do work on – tell your employees what you learned and acknowledge your responsibility in making improvements. Finally, you must act in those three areas and show how you’ve made progress. If your employees don’t see you actively taking effort, you’ll get nowhere,” says Don.

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February 6, 2020 | 3 Mins Read

Benchmark Your Mobile Field Service Maturity

February 6, 2020 | 3 Mins Read

Benchmark Your Mobile Field Service Maturity

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By Tom Paquin

I remember the first time that I saw an iPhone. Having never owned any sort of palm or blackberry, it was like I was encountering an advanced alien technology. The power of its two-megapixel camera, its ability to provide wi-fi enabled geotagging (though no GPS), and its incredible ability to show more than one text message on a single screen was almost beyond comprehension. Staring into the inky blackness of that tiny monolithic square, I felt like I was getting a small window into the Rodenberry-inspired future that awaited us all.

Thirteen years later, smartphones are now boring. They’ve reached a design plateau (in spite of some attempts to mix things up), a steady annual stream of iterative improvements, and the market has been heavily consolidated into two operating systems, and a handful of hardware manufacturers gobbling up the market share. There is no mystique, no awe; we now have internet-enabled shoes and water bottles.

That boring-ness has derived itself from the relative ubiquity of smart devices. Mobility is cheap, accessible, and heavily-proliferated in both the developed and developing world. An obvious effect of that is that businesses have spent over a decade empowering their employees through this new channel.

If you benchmark service firms—even down to small businesses—on the maturity of their mobility solutions, you’ll see that more than half are already at a point where their solutions could be defined as an highly mature mobile field service solution.

Mobility is the norm, and that doesn’t just mean GPS and appointment starting and stopping. There’s a wealth of criteria that goes into mobility today, and not everyone is taking full advantage of what’s available. Do you know how you stack up?

When thinking about how you’re leveraging mobile, there are a few standouts that will help you along the path to maturity. Below are some things to keep in mind.

(One quick note—we’re focusing here on consumer-grade mobile utilities, rather than rugged devices, AR headsets, and so on. Expect more on those other device categories in the future.)

Use every part of the animal. Mobile devices are optimized from toe to tip for their form factor. From their dual cameras to the neural chips embedded in them to process augmented reality, every piece of a mobile device. A web app isn’t going to cut it when it comes to taking advantage of all of these pieces, either. You need something that’s calibrated to tap into the hardware potential of devices in the field. To that end, though, you also need to maintain some degree of consistency in the make and models of devices leveraged by technicians. In a BYOD-powered world that can be tricky, but good mobile device management will help you see what you have, and where the holes are.

Pave the way for a 1:1 solution. For a variety of reasons, the cloud might not be your FSM endgame, and that’s absolutely fine. But—you need to ensure that technicians don’t have to wait until they’re sitting in front of a workstation to get a job done. The service firm of the future is already on a path to dramatically minimize the footprint of the back office. Your technicians need to be able to manage parts, make schedule changes, and put down notes wherever they are.

Oversight, oversight oversight. You can’t just give your technicians an app to download. You need oversight into the historical data of a technicians’ device. This means not just mobile device management, but also tying the device data into your central systems to evaluate in aggregate job performance, metrics, location data, time on task and so on. The best systems aggregate that data and use it as the tool to power predictive activities, planning and scheduling, and route management. You need to have any device you work with managed remotely, and you need that remote information to exist centrally. This can be done whether or not you’re a BYOD house.

These are a few small tips. But will put you on the road to mobile excellence, and prepare you with the right foundations for the next disruptive technology.

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February 3, 2020 | 4 Mins Read

The Labor Shortage Remains a Major Challenge – What’s Your Strategy for Tackling It?

February 3, 2020 | 4 Mins Read

The Labor Shortage Remains a Major Challenge – What’s Your Strategy for Tackling It?

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By Sarah Nicastro, Creator, Future of Field Service

As we kick off 2020 with a lot of talk about service transformation, migrating to outcomes, and how to leverage technologies like AI, there’s a need to revisit a topic that remains top of mind for many service organizations: the need for new technicians. According to a recent Forbes article, America is facing an unprecedented skilled labor shortage – the Department of Labor reported in January 2019 that the US economy had 7.6 million unfilled jobs, but only 6.5 million people were looking for work.

While you can’t control this challenge, you do need to have a strategy for how to handle it. This means examining your company’s processes and methods for recruitment, hiring, and retention and thinking about what you need to change to adapt. Here are five areas to consider as you face this hurdle in 2020:

#1: Find ways to influence early. Gone are the days of posting open positions and having qualified candidates line up. You’re going to have to work harder than that now. Moreover, you need to think about who you actually need to influence, and in most cases, this is young adults of high school age – and some would argue even younger (as well as to a lesser degree, their parents). This is because much of the trade labor shortage is due to kids feeling that college is the “only” option for them. Companies that are having success with recruiting have adapted and have found ways to get in front of these kids to show them the potential the trades offer – to plant the seed that there’s more than one viable path to success. This can be done through career fairs, working directly with schools to come and speak or put on a sponsored event, advertising around schools, thinking about venues and activities that kids those ages would be frequenting and brainstorming how to get a message there, and so on. But the key here is that getting your message in front of a 30-something candidate is starting too late – to really impact this issue, you have to influence early.

#2: Recognize – and emphasize – how service has changed (and is changing). With all of the ways service has become more customer-centric and technology-driven, the job of a technician doesn’t look today like it did five or ten years ago. The perception these younger candidates have about what the work of a service technician is may be outdated, and it’s very important to message around what service looks like today. It isn’t just turning a wrench – it’s being a customer service expert; it’s utilizing soft skills and consultative selling; it’s using technology like IoT, AI, and AR. These are changes that your older technicians may have met with resistance, but your younger prospective candidates may be excited about.

#3: Work harder so you can hire smarter. Just as the days of posting jobs and having candidates line up are gone, so too are the days of being able to hire experienced technicians – there simply isn’t enough of them to go around. You have to work harder for talent today, period. This means focusing on hiring for talent, skills, and potential rather than experience. You need to seek out the characteristics and traits that you know are ingredients to success with your company, and then do the work of training those employees on how to do your particular flavor of service. The technical part is trainable – the demeanor, drive, and inclination is not. Set up mentorship programs, develop deeper training courses so that you can equip a good candidate with all of the knowledge needed to do the job well rather than trying – and failing – to hire employees that already have that knowledge.

#4: Use technology to your advantage. The talent problem becomes more manageable when you begin making better use of your resources, and in some instances then need less of them. Arming your technicians with tools like AI and AR can alleviate some of the more menial tasks and enable those resources to focus on the bigger jobs. You can also use AR as a way to further leverage the knowledge of your older workforce by having a technician nearing retirement age train up multiple new employees remote from a back office. The opportunities are really limitless but looking for how technology fits into the equation of solving this problem is critical.

#5: Value and utilize your resources. Given the drought of new talent, it is important to look beyond your recruiting efforts and put equal attention on what you’re doing to retain your current employees. What’s the state of your company culture? Do your employees feel engaged and empowered? Do they have career progression plans to keep them happy over the long term? Without confident answers to these questions, the recruiting efforts you’re focusing on are for naught. As you bring new employees on, what’s your onboarding experience like? Do they feel welcome and valued right away? These are critical considerations. If you’re putting in ample effort here and have a happy and engaged workforce, you can also call on them to assist in your recruiting efforts by putting referral programs in place.

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January 31, 2020 | 4 Mins Read

What to Expect when you’re Expecting (Your Employees to Quit)

January 31, 2020 | 4 Mins Read

What to Expect when you’re Expecting (Your Employees to Quit)

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By Tom Paquin

Back when I was an industry analyst, I ran a study to benchmark the strength of the service workforce. Through my research, I discovered that service companies expect nearly half of their service workforce to quit in any given year.

We could easily spend hours speculating as to why that is, and there are certainly some identifiable trends, like an overall aging workforce, that help explain these numbers, but the underlying truth is clear: Service companies expect to have to re-train half of their employee base.

It may seem like the logical approach is to tackle these issues as they arise, but forward-thinking firms know that’s a losing battle. Building a new employee base on the foundations that caused half of your employees to leave is not the answer. If you’re in a position where you’re losing somewhere more than 25% of your staff every year, there needs to be a fundamental shift in the way you hire, promote, and retain your talent.

Fortunately, there’s some truly inspiring stories across the industry of companies and individuals who are finding ways to rethink their hiring and retention practices. We’ve discussed this issue many times before, and from that, we can start to build a playbook for keeping your company together. Here are some key recommendations to help mitigate technician churn:

Consider your job listings carefully. What are the requirements for an entry-level technician? Do you expect to pay a new tech $30K, and also expect them to have three to ten years’ experience? You need to work with the workforce that’s actually out there. Back when I was sourcing for new IT technicians, I would call anyone who could spell “resume” correctly, and I’d set up an in-person with anyone who could tell me the difference between a hard drive and RAM. In IT service management that works, but it wouldn’t work in heavy equipment manufacturing, where you need to come to the table with a base set of skills. For that, it makes sense to target your listings towards the appropriate technical schools and apprenticeships programs. Not enough students enrolled in these programs? Well…

Build an apprenticeship program. Offer a one-year apprenticeship to, for instance, graduating High School seniors. Teach them the skills they need, and at the end of the year, make an evaluation with them about whether or not they should continue. Research shows it’ll be about 50-50, but you’re growing a crop of talent who won’t leave after another year, and after five years, your talent pool will be overflowing.

Hire for a mindset, not a skillset. In his two podcast appearances, Roy Dockery has discussed the great work he’s done hiring armed service veterans to technician roles. He, at vet himself, understands that skills and tools can be taught, but the right constitution is intrinsic to the right employee. Take your five highest-performing technicians and think about what makes them who they are. Ask them for referrals. Bring them into the hiring process. Consider their background. The goal here is to foster high performers. You won’t win every time, but if you are thoughtful about the trends that define a good, long-lasting employee, you’ll start to see positive change.

Consider the Technician Journey. Are your technicians happy? If you think that’s a silly question, guess what? You might be the reason why they’re leaving. Any job requires fulfillment to foster retention. Are your metrics exclusively punitive? Do you positively incentivize around things like NPS scores and upsells? What does the technician career path look like? To that end…

Consider a mentor program. One thing that I will always believe is that when you offer someone responsibility and respect their knowledge, they’ll step up to the plate. Therefore, the benefits of a mentor program organically extend to brand new employees, who learn the ropes (and the politics) of their job, and helps to inspire tenured employees to think about their career in new ways and sell it to a new audience.

Think carefully about technology. What a vague statement, but hear me out—Technology cuts both ways. For instance, there are so many great knowledge management utilities meant to bring technicians up to speed, which is great if you’re still seeing high turnover, but alternatively, throwing new service technology at technicians without seriously considering how they actually do their job increases the likelihood of losing otherwise strong talent. It’s a delicate balance, certainly, but it’s one that the right technical partner can help you manage with ease.

With anything, technician retention isn’t a one-and-done prospect, and a consistent review of hiring and retention practices will mean that you continue to mitigate turnover with smart business decisions. With the right plans in place, you can bring in new blood that improves your turnover rate, but more importantly, your overall business.

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January 27, 2020 | 6 Mins Read

Cubic Transportation’s Outcomes-Based Service Success

January 27, 2020 | 6 Mins Read

Cubic Transportation’s Outcomes-Based Service Success

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By Sarah Nicastro, Creator, Future of Field Service

Service organizations across the globe are painstakingly aware that the historical break/fix service model is no longer satisfying customers. Rather, customers are demanding outcomes – uptime, peace of mind, and results. The adaptation necessary to meet these ever-increasing demands is no small feat, which is why we see plenty of companies struggling to evolve. There are those, though, which have tackled this transformation with steely resolve and are leading the charge in delivering what today’s customers want. Cubic Transportation Systems is one such example.

Cubic Transportation Systems (CTS) produces and markets public transport fare reading and payment systems for the transportation industry around the world. If you can’t envision what this means, think about the Oyster card used within London. From the moment you purchase the Oyster card, to using the ticket vending machines to add credit, use the card to go through the gates, have the right fare taken from your account, and the smart calculations done in the back office so you are capped the right amount – all of that physical technology and software processing is done through the CTS system. . “Our history of creating and implementing payment and information technologies for the world’s most renowned transportation authorities and operators has taught us that to promote progress, you must create collaboratively – with your technology partners and your customers – and foster a culture of innovation within your company,” says Matt Cole, President of CTS and Sr. Vice President of Cubic Corporation. “We are committed to not only helping shape the transportation landscape, but are prepared to lead, envision and enable industry disruptors. Our technology platforms are designed to factor in the unknown, allowing our systems today to be relevant years down the road.”

This type of company mission and culture promotes the type of transformation service organizations are faced with conquering today. But while company-wide buy-in on this philosophy is a great head start, it still doesn’t make the journey easy. When you look at the practical illustration of what it takes for CTS to deliver this sort of innovation to its customers, it takes a significant amount of strategy, enablement, and execution to bring that commitment to life. Mike Gosling, IT Service Platforms Manager at CTS has been instrumental in the company’s journey to outcomes-based service.

Before Migration Comes Mindset

Success with outcomes-based service starts with mindset. CTS recognized that its customers were committed to improving the experiences of their customers, which put pressure on CTS to find ways to deliver even higher levels of service – or outcomes. Rather than the historical “call when it breaks and we’ll come fix it,” it becomes a matter of almost-constant uptime. Rather than push back on this demand or remain blissfully ignorant to the shift in customer expectations, CTS adopted a positive mindset and set out to determine what needed to evolve within the organization to be able to meet these needs.

This meant letting go of legacy thinking, and legacy processes. “It’s fairly straightforward to examine your processes and uncover what needs to change, but you also have to consider that you need to examine the legacy thinking that exists within the company as well – that is harder to identify and also harder to change,” says Gosling. “It’s just human nature to want to stay within your comfort zone, and it takes effort to take your entire workforce along on this journey and help them understand why and how things are changing and get them to buy into the mission.”

Gosling points out that while the process of weeding out legacy mindset can be challenging, it’s imperative to success. “Take the time to get to the root of what they’re thinking and saying – overcome their concerns rather than dismissing them,” he says. “It takes bravery to overcome this legacy thinking, but you have to be brave and work through it or it will hold you back from your future.”

Setting and Sticking to Success Criteria

Once you feel the right mindset is shared among the entire workforce, the next step is to create very clear success criteria so that you can gauge your success or failure in providing the outcomes you’ve promised your customers. “If you don’t have clarity on what success looks like, you’ll never get there,” says Gosling. “The criteria need to be very specific, and realistic but challenging.”

When CTS embarked on the outcomes-based service journey with its customer Transport for London (TfL), the local government body responsible for the transport system in Greater London, the process for setting these success criteria was to carefully examine the service contracts, top to bottom, and set the criteria for hitting those requirements. In this case, the number one criteria is system uptime, followed by three others.

“Once your criteria are set, it is imperative to stick to it – use it as your why,” says Gosling. “There will be plenty of scenarios in which you’ll be tempted to veer off course and make decisions that aren’t tied to the success criteria, but you have to remember that if you set your success criteria well, anything that deviates is a distraction from what matters most.”

Selecting the Right Toolset

CTS knew it couldn’t deliver the outcomes customers like TfL expect without relying on technology. “Technology is the path to delivering outcomes-based service,” says Gosling. “Adding field engineers to meet the demands of outcomes is not reasonable – technology is critical in today’s service landscape.”

To achieve its success criteria, CTS relies on IFS Field Service Management (FSM) which manages work orders, parts and assets to contracts, warranty, invoicing and billing. FSM gives CTS much needed visibility of what’s being done in the field. CTS also uses IFS Planning & Scheduling Optimization (PSO), a real-time scheduling and optimization software that uses AI and advanced algorithms to deliver the optimum schedule. “PSO is a phenomenally powerful tool,” says Gosling. “It is key to use delivering the outcomes our customers want in the most efficient way possible.”

CTS is also working to integrate Dexda, a machine learning-based event management tool, with FSM and PSO to incorporate IoT data from its equipment and move to more predictive service. “This will allow PSO to respond to events we think are going to happen based on empirical learning,” says Gosling. “Beyond enabling predictive service, however, it will also provide a wealth of valuable business insight on our products that can be fed back to engineering.”

3 Tips for Your Journey to Outcomes

On the journey to outcomes-based service, Gosling has learned three lessons that serve as valuable advice for those on this path. First, remember the importance of change management. This comes at the beginning of an initiative, but all along as well. With PSO, for instance, it was important for CTS to providing ongoing coaching and change management. “With a tool like PSO that self-learns and adjusts, there are times that are gut instinct for a scheduler that’s not accustomed to the technology to want to intervene,” says Gosling. “You have to manage this change and fight off those urges when they aren’t necessary. When manual intervention is necessary, you need to handle exceptions with consistency and document the outcome so that it can be factored into the workflow.”

Second, don’t try to avoid mistakes; they propel you forward. “When you’re innovating, mistakes will naturally occur,” says Gosling. “Making decisions means making mistakes. Mistakes are a learning opportunity that all too often are avoided when they shouldn’t be. As a leader, it’s important to set the example by owning your own mistakes and communicating clearly with your team about what happened, what was learned, and what will be different next time.”

Finally, avoid “that’ll do” thinking at all costs. “This journey is one of continual improvement,” says Gosling. “If you pop the champagne and put your feet up as soon as you hit your success criteria, you’ll fall back below quickly [or you need more challenging success criteria]. When you master one area, you keep watch of it and move on to another. You constantly assess where you are and where you’re going next, and out of this process is where the new innovative ideas are born. But you have to be in a constant state of assessing and looking ahead.”

Since CTS started its journey to delivering outcomes, and with its focus on mindset, metrics, change management, utilizing technology, and continual improvement, the company has improved uptime by 20 percent. Delivering outcomes is the future of field service and it’s inspiring to see a company that has successfully tackled such a major transformation.

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January 24, 2020 | 4 Mins Read

The Road to Servitization in Product-Oriented Businesses

January 24, 2020 | 4 Mins Read

The Road to Servitization in Product-Oriented Businesses

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By Tom Paquin

Recently I was hit by a peculiar targeted advertisement: A major automaker’s car subscription service. My interest being piqued, I clicked on the ad. From where I was standing car subscription services have always existed, and were called leased vehicles, and after some puttering around their very snazzy new website, I inferred that at its heart, this “subscription” was a millennial-oriented rebranding of that concept.

As I dug deeper, though, it became increasingly clear that that was only partially the case. In addition to the car and registration that typically comprises the totality of a lease agreement, this car company’s plan included:

  • Guaranteed pricing
  • Insurance
  • Vehicle maintenance
  • Annual upgrades

Feeling aspirational, I selected a luxury vehicle, and was given a monthly payment that, when taking into consideration the fact that you’re getting insurance and service included, with the option to upgrade after 12 months, seemed like a perfectly reasonable price.

We can discuss the environmental ramifications of this all another day but from an economical sense, this seems like a win-win. Customers who want it get a virtually worry-free car, no negotiations, no tire replacements, no insurance wrangling, and annual new car smell. The automaker gets an engine for customer loyalty, service control over their own vehicles to ensure consistency of parts and labor, and the ability to provide services like insurance through a third-party at bulk pricing, thus forming a key partnership.

This, at its heart, is true servitization. Sure, the car company is packaging and delivering a commodity, but the value is in the feeling of security that accompanies the sale. Car buying tops every list of most stressful purchase processes. Alleviating that stress is a service with minimal overhead and maximum value. It is servitization at its most effective, and if executed as well as it looks, could keep customers coming back for a long time.

If we can make servitization work with cars, we can make it work with virtually any industry, but it’s not without its caveats. There are a lot of places along the value chain where things can go wrong. Any industry that combines a product with service needs to think very carefully about how it manages every aspect of its brand. Here are some very important questions to ask as you start to consider servitization.

Are products delivered through dealer networks?

Let’s use an iPhone as an example, here. iPhones are sold through Apple retail, where the entirety of the sales and service process can be curated. iPhones are also sold through cellular providers, big box, and electronic retailers. When rolling out its servitized plan for iPhones, Apple had to decide whether to offer the iPhone upgrade program exclusively at its own retail stores, or externally, and chose to keep the entirety of the process in-house. This was a safe, if unambitious move.

Some product companies don’t have the luxury of a direct-to-consumer presence, though, so they have to work with dealer networks not just for sales, but also for service. Because of that, standardization of the parameters of service contracts, parts management, and service delivery are imperative to getting servitizaton right. Does this mean making all of your dealers adopt the same service management platform that you have? If it’s an automaker, then possibly, but if it’s Best Buy, then you’ll need to think about how to approach that in order to centralize data. Work with your implementation partners on the appropriate plan.

Is the service managed centrally, is it franchised, or is it done independently?

Just like the products themselves, it’s important to consider how the actual service system with which you work is handled. If you have a service infrastructure in place, is it self-sufficient, or is it bolstered by independent contractors? Do you want independent contractors involved in service delivery? If not, how can you incentivize consumers to go to first-party service centers?

Alternatively, if you have nothing but independents, do you have the means of managing them internally? What utilities are you using to facilitate that process? Do customers manage service and assets internally, and are assigned external service workers, or does information live in dozens of separate systems? There’s obviously a right and a wrong way to do this, and the tools are out there to centralize all of these processes. You owe it to your brand to get it right.

What does the long-tail service lifecycle look like?

This is where you make the business case for servitization. Perhaps you have an extremely long product lifecycle. We see businesses with products from 1955 in their clients’ possession, which completely changes the meaning of an upgrade cycle. In an instance like that—what are the service touchpoints, and how do you appropriately monetize those touchpoints?

In businesses with shorter product lifecycles—one to ten years—are there opportunities to keep customers tied to your ecosystem in the long-term? Many businesses have rightly concluded that service contracts represent a swift, easy, and cheap way to do just that, but you can’t just deliver service, of course. The service needs to be good.

It’s unclear whether this automaker will succeed with its all-inclusive approach to car buying, but it represents a pretty interesting test case in the way that businesses are thinking about products for their consumers. Especially in low-margin industries, service bundles provide the sort of profit cushion that could really make a difference. And when executed well, servitization can be what sets your business apart.

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January 20, 2020 | 4 Mins Read

The Hurdles To Achieving AR ROI In Field Service

January 20, 2020 | 4 Mins Read

The Hurdles To Achieving AR ROI In Field Service

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By Sarah Nicastro, Creator, Future of Field Service

According to ABI Research, the total augmented reality market is estimated to reach over $100 billion by 2024, at an average CAGR of 75 percent. The research firm says, “The mainstay early adoption verticals like Manufacturing, Logistics, and Energy are still showing impressive growth, while newer verticals like healthcare, media & entertainment, and retail/commerce/marketing are the fastest growing.”

Personally, AR is one of the technologies I find most exciting and compelling for service organizations because I can so easily visualize the problems it can solve. In other words, its value proposition is clear to me (and countless others). Take the talent gap, for instance, and think about how AR can help organizations to more quickly and efficiently train and support limited resources. Consider the value of remote resolution, and how AR can be used either internally or with customers to reduce the need for truck rolls in many cases or, at minimum, ensure better preparation when a tech arrives on site. Even knowledge management – being able to capture the information exchange in the AR sessions and catalog that as shared knowledge is incredibly valuable.

While I’ve talked with numerous service leaders having success with AR within their respective organizations, what has surfaced is the reality that there are a few shared hurdles that need to be overcome in order to attain ROI and reap the full rewards of AR. Here are four common hurdles that those I’ve interviewed have experienced and would caution you to expect and preparer for as you implement AR:

Older workforce resistance. The reality is, any new tool can be met with skepticism and hesitance by those workers set in their way. But I’d say a tool like AR has a buzz about it that can emphasize these emotions in some of your older workers. Those I’ve interviewed have reported some significant challenges with getting older workers on board with using AR. Overcoming this hurdle comes down to three things – having a proactive change management strategy in place, encouraging an open dialogue with these workers as they become familiar with the tool, and ensuring you have measures in place to hold your workers accountable for using the technology.

Connectivity issues. This is a hurdle I am sure is being addressed by those providing AR technology, but a recurring issue among the folks that have adopted the technology is experiencing connectivity problems. This ranges from not being able to initiate sessions to sessions being interrupted, but the end result is that it can be a very frustrating experience for the employees (and customers, if you are using this technology with your customers) and contributes to the adoption issues discussed above. I’d recommend you test, retest, and keep testing connectivity during your trial and pilot to ensure that the solution works to your expectations.

Battery life issues. Some of the folks I’ve talked with are using AR for very short trouble-shooting chats (three to five minutes) and others for longer support calls (20 to 25 minutes). Those that are using AR for longer durations have reported that the sessions kill the battery life of their mobile devices. This will present varying degrees of issue depending on how many opportunities your technicians have to charge their device throughout the day, but again is something you should test and bring up to your AR provider if you’re researching or evaluating this technology.

Wearables need work. Most of the companies I’ve spoken with about AR are using a smartphone or tablet for sessions, while many are interested in or considering moving to wearable devices. One of the service leaders I interviewed had tested different wearables and explained that while the AR solution works quite seamlessly on a smartphone, it isn’t as smooth on the wearables – that there’s still some work that needs done for the application to have the same impact on a wearable as it does a smartphone. I am certain progress is being made with this daily, but it’s important to identify the preferred device for your use case is and test it thoroughly.

Despite these hurdles, the value of AR in field service is clear, and that is echoed by those I’ve discussed challenges with.  All the people I’ve spoken to about AR use feel it is worthwhile despite some of the stumbling blocks. It is always worthwhile, though, to discuss both sides of the coin when it comes to technology – the value it will provide, but the fact that it is never a seamless journey. If you are looking to deploy AR, these issues are worth investigating and discussing during your evaluation.

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January 16, 2020 | 4 Mins Read

Avoiding Reckless Tech Adoption

January 16, 2020 | 4 Mins Read

Avoiding Reckless Tech Adoption

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By Tom Paquin

As someone who cooks a lot at home, I have been trying to improve my culinary chops for quite a while now. Between binging on cooking YouTube channels (Highly recommended: Bon Appetit) and simply getting creative with ingredients, I think that I’ve built up a strong home cook aptitude, and have proudly expanded my repertoire (and my palate) with new spices and ingredients. One thing that practice has taught me is the tenuous balance of done-ness. There’s a lot of precision that goes into the balance of overcooking and undercooking. Once something is on the skillet, the clock starts ticking. When do I flip this? When do I add the garlic? When do I take it off the heat?

The preparedness of a business for a new technology requires an intimate understanding of a similar balance. Leave your business in the oven too long without adopting the right tech, and your competitors will have surpassed you, your infrastructure will have become too rigid, and your customers will move onto someone who delivers more. We all know that, though, and talk about the dangers of resting on your laurels quite a bit. What happens, though, when you adopt a technology before your business is ready for it?

I discussed an example of this a few weeks ago with a service leader who preemptively deployed augmented reality tech without properly addressing infrastructure challenges, leading to the tech sitting uselessly on a shelf. In the inverse, though, I was talking to a service leader a few weeks ago who had yet to adopt IFS Lobby, a dashboard utility that’s part of the IFS service management platform, and asked him why he hadn’t yet.

“We need to explore every avenue before adopting any new system,” He said. That’s fine, of course, but had they explored any avenues yet? There’s ultimately no difference between technology you own sitting unused on a shelf and technology that you have the capabilities to use but refuse deploy. Both are useless. So, with any new technology, how do you know when your business is ready?

No two businesses are the same, of course, but based on what I’ve seen, when it comes to successful adoption, there are a few steps you can take to know you’re making the right move at the right time.

Hear from reference customers. We all want to be trailblazers, but the fact is that most technology advancements have been adopted in one way or another before you considered it. In service, what often happens is that technology saturation happens in sales, retail, or some adjacent industry, or in a disruptive tech play, which sets the standards that are adapted and iterated upon in a service environment. Find those customers and hear their stories. Look not just at the value, but at the best practices, at the initial legwork that goes into adoption, and, most importantly, where things went wrong. Best practices are often built upon mistakes. You can make them yourself, or you can learn from those who came before you. Save yourself the headache and learn from your neighbor.

Take stock of your digital inventory. This goes without saying, but there are a lot of digital switches at play in the modern enterprise, and the data collected from them, their functionality, or their output could be a key component that folds itself into a new technology adoption. Understand that technology mix, and whether or not any pieces are missing. Key at this step as well is looking at the software that will sit around your new tech purchase. Does everything speak a common language? How difficult will integration be? How will it impact or enhance the effectiveness of this software? Often these questions will come from your references, or from your own team, but often as well, they’ll come from the below.

Consult the experts early. Whether it’s a third party integrator or a branch of the company whose tech you’re buying, start asking—and getting answers to—"into the weeds” questions very early on in the process. This is pretty standard practice, of course, but this is frequently saved for the point when organizations are ready to adopt a technology, rather than when they’re evaluating if they should adopt a technology. At both stages, it’s easy to get handed a laundry list of performance gains, when really, you should be equally as interested in understanding how something actually works, and what the change management processes will actually be. If the people you’re working with can’t get you those answers, then it might be too early, or you should find a company that does.

Unlike business, there’s one thing that you can do to get the perfect meal, and that’s practice a lot, knowing that you might end up with the odd turkey with pink in the middle (apologies to my poor wife, who was a great sport during my trial attempts to modernize Thanksgiving). Of course with service, you can’t practice the adoption of a new technology, because each new technology is its own dish. For that reason, it needs to be more like reading a recipe. Keep a close eye on the directions, and make sure that you have all the ingredients before the food hits the pan.

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January 13, 2020 | 6 Mins Read

A Look at Field Service in 2020

January 13, 2020 | 6 Mins Read

A Look at Field Service in 2020

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By Sarah Nicastro, Creator, Future of Field Service

Field service is evolving enormously in recent years and technology and customer expectations will continue to advance just as quickly. Twenty years ago, field service may have been centered on break-fix repair, but the velocity now is towards long-term, contractual arrangements that are more satisfying for the customer and more lucrative for the service provider. Transformational technologies can enable whole new revenue models that make field service organizations stickier and more intimate with their customer even while generating more value. Here are four ways leading service organizations are adapting.

Prediction 1: Outcomes-based service takes hold

We will see more companies selling annual maintenance contracts. These contracts are attractive because they give a field service organization predictable revenue and demand and can deliver high margins.

For decades, product-centric businesses have been transitioning towards servitizing what they sell. First it was the addition of a warranty and the availability of after-market parts. Then it was reactive field service or depot repair. As early as 2018, IFS data suggests that 62 percent of manufacturers were already pursuing some form of aftermarket revenue. But manufacturers are now adopting more advanced forms of aftermarket service, with 16 percent of respondents offering maintenance contracts with specific service-level agreements (SLAs).

It is notable that modern customers not only demand a better service experience, but a holistic outcome. They expect to be left feeling positive as well as have their specific issue remedied. Technology is a mechanism whereby this change can be implemented, but nobody should overlook the people element as well.

I predict that that while 16 percent of manufacturers were involved in service contracting in 2018, that number will reach 25 to 30 percent in 2020.

Complete Servitization

The move towards servitization in most cases will deliver value-added revenue on top of product sales. In some cases, where it is attractive to the consumer, a product may be completely servitized, and the end user pays for metered usage or other metric captured in real time. In the 2018 IFS data, only 4 percent of manufacturers were fully servitized, including companies from the medical device, metal fabrication and oil and gas industries.

For customers who want to push enterprise risk off on their vendors, servitization will be an attractive way to buy. But actually realizing a profit on these contracts poses some significant management and enterprise software problems. When the service agreement is sold, a company will be committing to deliver against a contract that they could make or lose money on for years. Executives will need to make sure they have adequate what-if-scenario planning capabilities to enable them to deliver quotes that are competitive with minimal risk.

Companies can turn their data into a strategic tool that facilitates service sales while improving the customer experience. For this shift to be successful for companies, they’ve had to put some foundational technologies in place. Research IFS and Future of Field Service recently conducted with Bill Pollock of Strategies for Growth shows that outcomes-based service operations rely on the foundation of the service management platform, ERP, predictive maintenance, and IoT in particular.

More than half of respondents were running some type of enterprise system of record that handled the core service transactional business

54 percent are running their service business on a “Dedicated Service Management platform” like field service management (FSM) or enterprise asset management, just ahead of enterprise resource planning (ERP) at 50.8 percent

6 percent said they were using software for predictive maintenance and 42.8 percent were leveraging data from the internet of things (IoT)

With these tools in place, I forecast that an increasing emphasis on complete servitization, and that in 2020 we will see the percentage of manufacturers selling products by subscription or metered use will surpass 10 percent (from 4 percent in 2018).

Prediction 2: Digital Transformation Gets Harder Before It Gets Easier

People use the term “digital transformation” to sell any number of technologies, but we are dealing here not with a technology that can be bought but a fundamentally different way of looking at and doing business. The truth is that, to do it properly, it is a complex journey for service organizations and one that involves a departure from siloed operations, legacy tools, and outdated business processes. The change management obstacles that surround this are many, as individuals can find the old ways comforting even as the competition is overtaking a business.

What we have seen so far is rollout of transformational technologies at the edge. We track our field technicians’ location through IoT. We schedule them using AI. We may have an AI chatbot fielding inquiries online. Maybe we have some AI functionality in our inventory management processes. We’ll continue to see point solutions using AI and IoT. Where we are going next, though, is the introduction of AI in particular to the front office and administrative processes.

In its “Top Predictions for 2020” report, Gartner said: “Through 2021, digital transformation initiatives will take large traditional enterprises, on average, twice as long and cost twice as much as anticipated. Large organizations will struggle with digital innovation as they recognize the challenges of technology modernization and the costs of simplifying operational interdependence. Smaller, more agile organizations, by contrast, will have an opportunity to be first to market as larger organizations exhibit lackluster immediate benefits.”

History is littered with companies that couldn’t change as they needed to: Kodak in the face of digital photography, Blockbuster Video in the face of servitized and downloadable media. Today, we are at a point where disruptive technologies are embedded at the tip of the spear of forward-thinking service organizations. IoT sensors capture condition-based maintenance information, or an AI algorithm adjusts the field service schedule in real time based on constantly changing conditions.

In 2020, we will see more companies adopt these disruptive technologies in customer and service-facing settings. But I believe we will also see enterprise software vendors move further towards AI-driven automation of the front office in areas like service finance, inventory management, what-if scenario planning and customer interaction. And those who adopt AI as part of a commercial-off-the-shelf solution will win the race against those who take a go-it-alone approach.

Prediction 3: IoT Grows Up and We’re Left With All The Data

With more and more organizations saying they have some degree of remote connectivity for their assets, their drivers, and their parts, IoT is now mainstream. We are collecting large amounts of data and can now develop and apply analytics.

In our study conducted with Strategies for Growth, the biggest area of implementation interest across all industries is in predictive and prescriptive maintenance. Connected assets are the start of the story rather than the destination and customers are starting to realize that the old adage of “garbage in, garbage out” applies if data collection and hoarding becomes an end in itself.

A good example is multinational telecom company Telefonica, a provider of smart technology to collect data from assets (such as vending machines). The data is then fed into their existing analytics for decision support. The power of analytics is significant enough that it will also be important to assure customers that you respect their privacy and data rights. Google faced controversy after its 2019 purchase of Fitbit due to concern over how Google would use and monetize end user data.

During 2020, my forecast is that businesses will focus less attention on methods by which to collect additional data and more on making valuable use of the data they are already collecting.

Prediction 4: Companies Work to Balance AI vs. Human Experience

As advanced AI becomes more widely adopted among service organizations, companies will seek an equilibrium between the efficiencies of AI and contact with humans that customers and other stakeholders crave. On one hand, greater AI use not only reduces costs but also enables organizations to make better use of resources in sectors facing labor shortages. AI will do a better job meeting certain deliverables and should automate many repetitive tasks. Will this free up staff for more customer-facing work?

In various service settings, this is exactly what AI has already done. AI-driven schedule optimization for instance enables a single dispatcher to support a larger number of field service technicians, enabling them to manage by exception, perhaps spending more time with customers when they need a human touchpoint.

Service intelligence vendor Aquant in this Field Services Online article, while acknowledging Fortune had in 2016 warned that 48 percent of jobs would be lost to artificial intelligence and robotics, says the true future lies in a hybrid between people and AI. As noted by Deloitte in its report Smart Field Service: Connecting Customers, Assets and Employees, “In a digital world, it’s emotional connections that make the difference between satisfying experiences and those that delight the customers and build strong long-term customer relationships.”

Our job now is to use AI to engineer seamless, satisfying automated processes into our business without engineering the human contact out.

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