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June 20, 2019 | 3 Mins Read

Make The Most Out of Your People With Service Thinking

June 20, 2019 | 3 Mins Read

Make The Most Out of Your People With Service Thinking

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By Hilbrand Rustema

With commoditisation and decreasing growth rates on product sales, the service business is now seen as the new area for revenue and profit growth for manufacturing companies. However, recognising the need for a new business model and actually implementing the change are two different matters. So, the question is, how can you best deliver on these expectations and turn services into an area of sustainable growth and profits? The answer is Service Thinking.

What is Service Thinking?

Service thinking is a mind-set. With this mind-set the focus is no longer on making something (a unit of output), but rather on assisting customers in their value creation processes. The value of services is not solely created by the manufacturing company, but instead it’s created through a co-constructive process together with the customer, by applying technical or business knowledge to improve whatever it is the customer is trying to achieve.

The Importance of People

People are critically important in the service business. People represent 60 to 80 percent of the operational costs of a service operation and, in the end, it’s people who have the biggest impact on the customer experience and the satisfaction level of the customer. To apply Service Thinking, it is imperative that your people become ‘trusted advisors’ to your customers. Apart from technical or business knowledge, this also requires the ability to create a relationship with the customer, built on communication, trust, flexibility and adaptability.

The Challenge that Organisations Have to Face

The big challenge for organisations is that nearly every change, improvement or transformation requires change in behaviour and attitude of your people. The first step in doing this, is making sure that each layer of your company knows what the strategic change means and understands why it is needed. The next step would be to develop the required skills, knowledge and attitude people need to fulfil their role in this new situation.

What Can The Organisation Do?

In this route for applying Service Thinking, an organisation can do the following:

  1. Create awareness and explain why Service Thinking is so important to the organisation and what it means for its employees.
  2. Help its people to change their behaviour and develop their skills, by providing them with training for acquiring new skills, as well as with tools and coaching.
  3. Improve customer insight to get a deeper understanding of real customer needs by putting yourself “in the shoes” of your customers.
  4. Design your desired customer experience instead of leaving it to chance.

Furthermore, technicians and support employees should also be guided into developing their customer skills. This means their ability to communicate, build relationships, sense customer and company needs and so on. Developing these skills and attitude is something an organisation can begin to do internally. However, it is often more effective to kick start such a program by using an external more experienced facilitator who can bring real-life examples and case studies to accelerate staff engagement. Furthermore, changing the mind-set of sales people is also very important. Selling products is definitely not like selling services. The intangible nature of services requires that their value is articulated and linked to customer challenges and customer outcomes. What is required is to develop a new sales approach focussed on services, which includes training sales people, develop customer insight, provide support in developing sales tools to increase sales effectiveness, and define the sales strategy and performance management. All in all, it is clear that there is an enormous potential in services and companies which choose to take the path of unlocking this potential have to start applying service thinking. A prerequisite for this is a change in people’s behaviour and mind-set such that your company becomes truly customer centric. Read more about how Noventum can help you unlock your full potential with regards to Service Thinking, as well as People Development.

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June 18, 2019 | 3 Mins Read

LiveWorx19 Recap: Words of Wisdom for the Digital Transformation Journey

June 18, 2019 | 3 Mins Read

LiveWorx19 Recap: Words of Wisdom for the Digital Transformation Journey

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By Sarah Nicastro, Creator, Future of Field Service

I wrote an article on day one of PTC’s LiveWorx19 event last week that discussed what I heard during the keynote: an acknowledgement of the complexity of the digital transformation journey. I find it refreshing when executives within the technology community seem to genuinely appreciate how significant of a shift is really taking place in service and own the fact that the transformation isn’t just about the technology, but about really re-engineering the business from delivering service to delivering outcomes. As Gentry Pate, Global Supply Chain Director at Dell said in his session on Monday, “To accomplish our objectives, we really had to change our DNA.”

Technology is, however, an undeniable aspect of staying relevant, remaining competitive, and acclimating to this new way of doing business. At LiveWorx19, it was said time and time again that Digital Transformation is not only critically important, but an absolute necessity. Throughout the remaining days of the event, I had the pleasure to attend several exciting keynotes and informative sessions and wanted to take an opportunity here to share how some of the attendees are tackling the challenge of Digital Transformation head on. I spoke with Aly Pinder Jr, Program Director – Service Innovation & Connected Products at IDC Manufacturing Insights, who shared a number of important points in his session. “We can’t be good digitally by buying siloed technology to solve point-specific problems – there has to be a cohesive strategy,” he says. “Further, education needs to happen across the business on the move to outcomes-based service, not only within the service function. You will accomplish more if you create a strategy that service leaders advocate with all functions of the business.” I met with Aly after he delivered his insights and asked him his thoughts on what is the #1 barrier to Digital Transformation success. “Digital Transformation is both a complex, complicated journey and simple things we can do today,” he says. “Companies get hung up in trying to sort out the long-term, 10-year journey and fail to focus on the small wins that can be achieved now. Ultimately, success is a mixture of both – but you can’t let the overwhelm of the entire journey stop you from taking the first step.”

Digital Transformation is Both a Technological and Cultural Evolution

Larry Blue, CEO of Bell and Howell, echoed this sentiment when we chatted about his company’s use of ThingWorx IoT and overall digital transformation. “To succeed in digital transformation, you first need to understand what your true goal is – know what you’re working toward. Then I suggest starting with a small team and an initial project – don’t try to bite the whole apple all at once. Success breeds success, so if you can get an initial win you will be in a position to build from there,” he says. “Also keep in mind that this is both a technological and a cultural shift. It needs executive attention. There’s a saying, ‘People respect what you inspect.’ If you take the time to be personally involved, people take note of its importance.” Consider your most practical path to Digital Transformation. When Dr. Maria Wilson, Global Leader Data Driven Advantage at Howden, joined Jim Heppelmann, CEO of PTC, on stage for his keynote, she said “We chose to stay focused on our core strengths, and built a strong system of partners for digital enablement. We’re using those digital tools, including IoT and AR, to deliver a better customer experience than ever before.” So while Digital Transformation is certainly multi-layered and complex, LiveWorx19 was ripe with examples of companies making significant, impactful progress. As Peter Diamandis, MD, Founder, Executive Chairman, XPRIZE Foundation and Executive Founder and Director, Singularity University, said during his keynote, “When you’re at the top of your game and sitting pretty, it is really tempting to stay there. But you must question – not defend – your position.”

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June 13, 2019 | 4 Mins Read

Five Things You Might Not Have Known About Decisions Behind IT Outsourcing

June 13, 2019 | 4 Mins Read

Five Things You Might Not Have Known About Decisions Behind IT Outsourcing

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By Dr. Marlene R. Kolodziej

Executive decision-makers cannot always anticipate and fully understand the implications of information technology outsourcing (ITO) decisions for the long-term processes, capabilities, and performance of their organization, especially when considering ITO for cloud-based services.  My doctoral research explored the decision-making process, and particularly the criteria used by executive decision-makers, for identifying and selecting organizational competencies when engaging in Information Technology Outsourcing (ITO) using cloud-based services. Findings indicate that executive decision-makers are unable to articulate decision-making criteria and to define processes used for identifying and selecting organizational competencies to consider as part of ITO engagements for cloud-based services.

While the study participants were asked a number of questions, the desire was to answer the question “How do executive decision-makers describe the process followed for the identification and selection of organizational competencies to consider as part of ITO engagements?”.  Of course, there were additional questions, such as a) “How do executive decision-makers describe the criteria used for selecting organizational competencies to consider as part of ITO engagements?”; b) “What methods do executive decision-makers use to anticipate the long-term impact of their ITO decisions on organizational processes, capabilities, and performance?”; and c) “How do observations on anticipated impact differ from realized impact on organizational processes, capabilities, and performance from ITO decisions?”. The good news is those questions helped identify these five things regarding executive decision-making when outsourcing to the cloud.

#1: Executive decision-makers identify competencies primarily using intuition. It’s not new news that executive decision-makers select organizational competencies to target for ITO for cloud-based services based on the need to fulfill application, security, regulatory, or compliance requirements; to fill a gap; and/or to increase capabilities not found within their organizations.  What is new is the research found executive decision-makers identified organizational competencies to outsource to the cloud through a process of intuitively understanding the gap or criteria in their applications, security, regulatory, or general requirements. These decision-makers also made sure those competencies were not a core part of their business.

#2: Executive decision-makers thought they used a formal decision-making processes (but not really). While executive decision-makers used their intuition to select organizational competencies to target for ITO for cloud-based services, they also believed a standard decision model was used. Executive decision-makers assumed they used a formal multi-criteria decision-model (MCDM) as part of their decision-making process, when in actuality, their decision was intuitive but happened to align with a formal MCDM.

#3: Executive decision-makers rely on external expertise (though they really used their intuition). While now know executive decision-makers intuitively identify competencies to outsource to the cloud prior to initiating the outsourcing process, but the researched also showed  executive decision-makers engaged in a formal request for proposal process with external vendors. Although some participants used the expertise of external vendors to identify competencies to reduce cost, the identification of organizational competencies is much more of an organic process. Executive decision-makers decided to retain core competencies such as customer-facing applications and business relationship management activities while moving noncore competencies such as internal corporate systems, architecture design, cloud operations, simple sales management, and support to an outsourcing provider.

#4: Executive decision-makers build in contingencies (and are flexible). Executive decision-makers retain some onsite infrastructure for business continuity but also construct their ITO using cloud-based services with the flexibility to move data to another cloud-based service provider or back in house. Executive decision-makers also avoided outsourcing core competencies and are willing to insource those previously outsourced competencies should those competencies change to core competencies and become strategic. Essentially, executive decision-makers identified their core competencies prior to engaging in outsourcing to the cloud; understood their internal strengths, what made them unique, and what competencies were missing; and used the cloud to strengthen internal competencies or add new competencies to remain competitive, and revisited those competencies they outsourced to make sure those competencies were where they should be.

#5: Executive decision-makers built muscle memory (practice, practice, practice). Executive decision-makers experienced negative outcomes when engaging in their first cloud-based outsourcing, but subsequent cloud-based outsourcing engagement were perceived as having more successful outcomes. The an initial outsourcing engagement requires creating new frameworks and processes, whereas subsequent outsourcing engagements rely on the previous structure and lessons learned from prior engagements, thereby reducing the negative impact. Essentially, the more outsourcing you complete, the more successful each engagement will be. Previous research suggests the decision to outsource is an organizational strategy considered by many organizational leaders a requirement for staying competitive in the marketplace, given its potential for reducing costs, increasing profits, or developing competitive advantage. Executive decision-makers agreed that decision-making regarding ITO for cloud-based services commonly ignores the effort required to integrate applications into the infrastructure and underestimates the people, effort, and cost implied. Essentially, executive decision-makers are intuitive in their decision-making for ITO using cloud-based services, do not purposefully use a formal MCDM, rely on external expertise when needed, ensure they have contingency plans and are flexible, and are more successful as they outsource more.

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June 10, 2019 | 5 Mins Read

7 Tried-and-True Tips for Successful Merged Reality Adoption

June 10, 2019 | 5 Mins Read

7 Tried-and-True Tips for Successful Merged Reality Adoption

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By Evans A. Manolis

This much is certain: Merged Reality has become an increasingly important part of the service delivery process for many companies over the past two years. Remote Assistance has moved from a “cool to have” technology to a “must have” for service organizations that are looking to increase productivity and drive operational efficiencies.

Service organizations who have invested in Merged Reality technology are able to see a great impact on measurable service KPIs. Those include reduction of truck rolls/on-site service visits, increased first- time fix rates, decreased call handle times, improved remote resolution rates, maximized product uptime and perhaps most importantly, a positive impact on the customer experience. While service leaders understand the value that Merged Reality and Remote Assistance bring to both their customers and employees, they are faced with a challenge. How do they drive adoption and use of this technology among their front-line service teams? Over the past 24 months, I have worked with over 50 service organizations to help them address this challenge. What has become clear to me is that Merged Reality is no longer a technology play. Rather, Merged Reality is much more about change management and behavior change than it is about technology. It requires organizations to change the mindsets of service professionals. To change service processes. It means getting out of a comfort zone and committing to deliver service in a new way. And the reality is that none of these changes are easy. In order to help service leaders who are in the process of deploying a Merged Reality solution or for those who are struggling to successfully get one off the ground, I wanted to share 7 Best Practices For Merged Reality Adoption that I’ve seen proven to drive change and adoption.

  1. Build A Compelling Business Case. Start here. Make sure everyone knows what you are hoping to accomplish through the use of a Merged Reality solution and why you are launching this initiative now. Has there been a compelling event that pushed this initiative to the forefront? Be clear as to the reason this initiative is being put in place. Focus on the what and why of the program.
  2. Put Leadership in Place. All successful programs have three types of leaders. First there is the executive sponsor who has the vision for the program. Then you have the project leader, who has responsibility for the day to day operation of the program. This person is vitally important and without their full attention to the program, it is destined to fail, or at the very least, not yield the results you were hoping to accomplish. And finally, there are the change champions who are influential service employees who help drive the program to their co-workers.
  3. What’s in It For Me? This requires some thinking. Put yourself in the shoes of the service technicians who you want to use this technology. Why should they care about adopting and using a Merged Reality tool? Chances are they are very comfortable servicing their customers the way they have for the past five, 10, 15 or more years. What is in it for them personally? Forget about what is in it for the company or for you as the service leader. They generally don’t care about that but they do care about themselves. How will this solution benefit and be of value to them personally? Will it eliminate a plane ride and trip to service a customer in another country? Will it allow them to be more efficient in serving their customers thus allowing them to have more time with their family and friends? Will it make their job easier and less stressful? Will they be compensated for successfully using the technology? Communicate your message from their perspective and not yours. Get in their shoes!
  4. Start Small to Get Big. When service leaders see Merged Reality they think big picture, which over time is fine. But initially, focus on one or two high value, high visibility, critical use cases to get your program started. Where in your service organization can you use this technology and see the fastest time to value? Is there a specific challenge or problem you can initially focus on? Start there and then grow as the program takes root and becomes successful.
  5. Look for Short Term Wins. Gathering early program success stories is directly tied to the future success of the program. Be sure to communicate early successes to all those who are expected to use the solution. This is especially important for those service techs who may have used the solution once or twice but aren’t sure of the value of it. The “hedgers or fence-sitters.” Once they see that others on their team are having success, they will be more inclined to use the technology again.
  6. Analyze and Make Changes. Talk to your employees who have adopted and are using the technology (adopters) as well as those who are not (resistors). Look for root causes of both adoption and resistance. Understand why each has chosen their position. Let them know that their voices are being heard and you genuinely care about them. Don’t be afraid to make changes based on the feedback you gather from your employees. Your program is not cast in concrete.
  7. Publicize and Market. Once your program has started to bear fruit, make sure that all organizations within your company are aware of your Merged Reality initiative. Get it out of the service silo and communicate its success and impact to both internal and external customers. Make sure sales is aware of the program, as they can use it to win deals by differentiating you from your competitors. Conduct internal webinars to ensure that all employees are aware of the program.

As mentioned before, change is not easy — but is achievable. Keep working hard on it. It does not happen overnight, but the results you will get from your program are well worth the effort you will put in it to make it successful.

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June 6, 2019 | 2 Mins Read

Take the quiz: What is Your ‘New IT’ IQ?

June 6, 2019 | 2 Mins Read

Take the quiz: What is Your ‘New IT’ IQ?

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By Tom Paquin

Here at the Future of Field Service, we love talking about new product implementation, integration, and rollout, but we realize that represents a very small percentage of the day-to-day life of service IT. The meat of IT interactions happen in the moments in between those large scale implementations; Maintenance, onboarding, and off-boarding of employees onto the various systems that run your service practice. Right alongside those big implementations, these day-to-day operations are changing too. 

The Dawn of New IT

With the many technical advancements disrupting every area of service, it’s easy to forget about how technology impacts some of those top-level areas of IT, as well. These technical advancements, along with changing perspectives about the role of IT holistically, have led to the coining and conceptualization of what we like to call New IT. So—what is New IT, and how does it differ from, uh, old IT?In short, the way that I like to think about New IT is as the democratization of Information Technology. While traditional IT forces a top-down approach to the way maintenance is handled, New IT puts the power, and expectations of onborading and maintenance into the hands of the user. With the advent of cloud, fast connections, and remote device management, IT professionals should be interacting with end users as little as possible. In field operations, where employees should be remote 99% of the time, this is even more imperative. This allows and IT staff to focus on bigger, broader strategic initiatives that are more worthy of their time.Let's use onboarding as an example. Ideally, IT should not even have to unwrap the packaging on a new employee’s devices in order to get them up and running. Modern device management starts at the OEM, and is visible in a cloud-controlled database, so the computer leaves the assembly line with the employee's credentials ready to be configured. This logic invariably extends to your FSM software, which should be managed and deployed in the cloud for ease of integration into a New IT workflow. Moreover, a solution should be chosen that is configurable, modular, and frictionless for updates, maintenance, and management. If you're an IT professional, you might be wondering how you stack up, so we've created a short quiz to test your "New IT" IQ. It'll help you see how you stack up against the most mature of Field Service firms. Check it out below:

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June 3, 2019 | 3 Mins Read

Remote Services Drive the Creation of High-Value, Low-Cost Service Models

June 3, 2019 | 3 Mins Read

Remote Services Drive the Creation of High-Value, Low-Cost Service Models

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By Annick Perry

Customers are increasingly questioning the value of product-related services, and price pressure on product support services is increasing. However, many companies cannot afford to follow the reduced prices tactic as this would translate directly to lower profits. What they really need to do is re-engineer their service models to create low cost but high value services.

Such a model drastically improves profit margins by completely redesigning traditional service models to incorporate new enabling technologies, processes and customer experience designs, which increases your customer’s perception of value (for example through increased availability) and reduces the cost of delivery.

Adding Higher Value

To improve the Total Customer Value, you can either improve the brand experience, lower your price or implement improvements in the customers’ service experiences. All of these options mean that your service requires less effort on the customer’s behalf and therefore becomes more convenient and increases the total value for the customer. Simply explained, Customer Value is customer benefits minus customer sacrifices. Services are intangible so customers can’t evaluate your service offerings before buying them but do so via your brand promise. Improving the customer’s perception of value associated with your brand can be achieved by pro-actively managing the customer experience. Increasing value requires enhancement of this Customer Experience by actually designing it rather than leaving it to chance. Once you understand your customer’s expectations in relation to your brand and the brand promise, you then have to satisfy those expectations. This can be achieved for example, by analyzing various customer touch point opportunities i.e. points of interaction between the service provider and customers (a field visit, support center call, an invoice, website, app, etc.), then you can design a customer experience for each touch point.

By using information systems (IS) and looking at the management practices and policies guiding your staff, you can design the sequence and content of the customer experience, defining what will be done and by whom. Information systems should make it possible for your customer to have the right information at the right moment and from the right person. What’s more, this doesn’t necessarily increase costs because if you invest in developing your staff’s capabilities that means that they will become more effective with your customer and that in turn will lower customer complaints and losses.

Lowering Costs

One way to improve profit margins is by lowering costs. This means by using technologies like remote monitoring or remote diagnostics applications, your service provider can remotely monitor your customers’ machine or technology 24/7. This presents a significant cost saving opportunity because the more accurate your information, the better your ability to provide preventive maintenance before your equipment breaks down or the better you are able to diagnose and resolve remotely. If you integrate the equipment into the service delivery process, you will no longer require a customer call reporting the break-down; it will automatically trigger a request for repair so there’s no need for manual intervention. Cutting costs can also be achieved by using Knowledge Management (KM) applications, which can implement a better recording of the history of a machine or technology and can build reliable statistics about typical errors, causes and solutions. This knowledge can be distributed to your people in supports centers and field service engineers in order to guide them towards the right diagnosis and, hence, a faster repair time and lower service delivery costs. In addition, encouraging self-service can also lower service delivery costs. When customers are reluctant to pay a comprehensive price, you can encourage them to do some work for themselves. Self- service could mean ordering spare parts or consumables necessary to work their equipment, or it could be that the customer conducts self-help online through forums for example, or you could even offer assisted self-service (also known as looking-over-the-shoulder-service), whereby you remotely coach a customer to perform a certain action or repair. All in all, the use of Remote Services and the Internet of Things is the way to go about in lowering your costs in service delivery, while increasing the value you offer to your customers. The question is, do you have the service model that will allow you to join the game?

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May 30, 2019 | 3 Mins Read

The Digital Transformation Kiss of Death

May 30, 2019 | 3 Mins Read

The Digital Transformation Kiss of Death

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By Sarah Nicastro, Creator, Future of Field Service

With everyone racing full-steam ahead in their digital transformation efforts, there are countless questions that arise and require consideration: Are our processes streamlined? Are our current systems capable and being fully utilized? What new technologies do we need to invest in, and how do we make it all work together? How do we use these tools to maximize customer experience and create new revenue streams?

With the sheer volume of considerations that companies are weighing, there’s a very simple aspect of digital transformation success that often gets overlooked – employee adoption. Without employee adoption, your digital transformation efforts will fail – period. Resistance from the front lines is the kiss of death for digital transformation. I don’t think any company disagrees with this notion, but I do think plenty drop the ball in this area for one reason or another. To avoid the digital transformation kiss of death, you must slow down just a bit and carefully weigh how to engage and motivate your workforce so that digital transformation is something they are excited about instead of something they will fight tooth and nail. Here are a few points to consider:

  • Examine your past failures. Many organizations have spearheaded initiatives and made technology investments that have gone awry. It happens. But as you move forward with your digital transformation efforts, it is worth examining these past failures for two reasons. First, you need to ensure you don’t replicate your mistakes. Taking the time to look at what went wrong will help you create a solid strategy for success this time around. Second, those failures have a direct impact on your employees’ willingness to get on board with the next initiative. Being able to articulate that you’ve seen the err of your ways and describe what will be done differently this time around will be a good first step in breaking down the walls that exist blocking employee adoption.
  • Avoid confusion at all cost. As digital transformation efforts are commonly broader than the service function alone, it is imperative to create cohesiveness in both your strategy itself and the communication of that strategy to your employees. As soon as your workforce begins to think that there isn’t a clear strategy, or you don’t know what you’re doing, the seeds of doubt creep in and skepticism takes over. Get alignment on what the goals of digital transformation are for the company, and how you envision achieving those goals, before you begin to articulate the vision to your employees. Then, however, it is critical to begin open communication – early and often – so that your employees feel part of the process and have an opportunity to provide insights and feedback. The framework for where you’re going needs to be clear; the employees need to be a part of developing the blueprint for getting there.
  • Focus on creating a positive digital reputation. I love this term, and I am borrowing it from Greg Lush, founder of Last Mile Worker Solutions, who first covered this concept on a blog on Future of Field Service. Greg’s point is that to achieve employee adoption, you must consider and care deeply about your digital reputation. This means that the tools you select are purposeful, practical, and provide a positive user experience. If you are investing in technology just do invest in technology or selecting tools that don’t truly meet the needs of your frontline workers, you’ll never achieve employee adoption because adoption is dependent on the tool truly enabling your workforce and making their lives easier. If you focus on creating a positive digital reputation, you will in turn focus on selecting and investing in tools that are valuable and effective and as you go along, and your employees experience the value of those tools, they will become more open to and excited for the next steps of your digital transformation journey.

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May 28, 2019 | 3 Mins Read

The Call for Contextual Computing

May 28, 2019 | 3 Mins Read

The Call for Contextual Computing

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By Greg Lush

Would you describe yourself as a digital survivor? You know, the world has forced you to utilize digital tools such as email and file storage in the cloud. Often you wonder about how things could be better; however, you cannot seem to put your finger on the best approach. Instead, day after day you wrestle with a seemingly bottomless email inbox and a daunting business portal where you are expected to logically store digital collateral.

Long gone are those days when IT set up my computer and pointed me to a shared server drive. Between my brilliantly organized email folders, and the tree of folders on the shared drive, I was good…. Or was I? While I could locate items quickly, most of the time, requests from co-workers continued to rise as the information age seemed to bottleneck on each of us, those “in the know” comfortable on our individual data islands. Is it possible that the hope of personal and corporate “modern computing” have simply choked us in digital exhaust? Information traveling towards us at the speed of light without any context leaving us frustrated and defeated. We must think differently about how we leverage information in the future, if we have any chance of jumping off the hamster wheel. Think about a typical day for a moment, the routines that you go through from when you wake up in the morning to when you finish your day. It is likely that many parts of your digital life are already thinking in a contextual manner. For many of you a strong association between context and applications will exist. What is the traffic like; check the traffic application. How is the weather; pull up the weather. Now, let’s consider an email which may have just arrived in your inbox. This email is from Joe Smith with Smart Computing inquiring about how the job is going at 123 Main Street. Immediately you respond to Joe with whatever information you have rattling around between your ears. Now, you have the best intentions in mind; however, since you have not embraced contextual computing, your perspective is extremely limited. Come to find out that the rest of your team are proficient practitioners of contextual computing and have a collaborative group showing all pertinent information about Joe and the Smart Computing organization. One of the service providers at Joe’s site has inadvertently flooded two floors of the building. Joe’s question “how is the job going?” was asking about the flood; your assumption was the context of his question was about the new equipment installation. If your objective is to prove how disconnected you are with your customers and their concerns, then you NAILED it! ­Unfortunately, this scenario happens all the time. You may not see it directly, yet the ramifications will eventually be felt as the customers trust wains and your hopes of bring order to this entropy seem to get further away. All it takes is an approach which helps you see that organizing your content in context can be as straightforward as one foot in front of the other. As we dive into this next series of blogs, we’ll explore mechanisms which you may employ today to help you master the next phase of your digital evolution; contextual computing. You are in the cat-birds seat with a strong reputation your community will happily travel with you on this next step of the hierarchy of digital adoption.

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Makino’s Critical Shift from Reactive to Predictive Service

May 23, 2019 | 3 Mins Read

Makino’s Critical Shift from Reactive to Predictive Service

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By Sarah Nicastro, Creator, Future of Field Service

Makino is a globally recognized company that produces metal-cutting and EDM machines. Like many product manufacturers, Makino is looking for new ways to differentiate itself through service. As such, the company is incorporating IoT, AI, and ML into its operations to enable the shift from reactive to predictive service. “This is a critical shift for Makino. It allows us to make support a competitive weapon,” says Mark Rentschler, VP of Customer Support at Makino.

Makino, a long-time IFS FSM customer, adopted the IFS IoT Business Connector as a part of its predictive service strategy. The IFS IoT Business Connector, a set of components that connect Microsoft Azure IoT Suite, or other discovery environments, to receive and operationalize device data and deliver observations to IFS business software. Along with proprietary AI and ML, Makino is able to monitor conditions of its machines and predict failures before they occur. In certain instances, when customers permit connectivity, the IoT Business Connector can feed data from the equipment directly into IFS FSM so that a call can be placed, or a ticket created automatically. The solution works to determine product patterns and notify of issues prior to a failure occurring. Alerts can also be set to inform when preventative maintenance isn’t done properly or as scheduled. These insights help Makino not only to operate more efficiently, but to provide optimal equipment uptime for its customers.

Creating New Service Revenue Streams

With large equipment like what Makino manufactures, downtime is incredibly costly and disruptive to customers’ operations. Further, in today’s service landscape customers simply expect minimal to no downtime and for the equipment they’ve purchased to just work, period. Of course, service providers know this is no easy feat and work to keep pace with increasing customer demands. For Makino, the IoT-enabled OEE (overall equipment effectiveness) service offering not only enables the company to better meet its customer demands, but it also provides a new revenue stream for the company. This more sophisticated level of service that combines predictive analytics as well as equipment usage and operating data gives customers both insight and reliability that they are willing to pay a premium for, which is structured in the form of an annual subscription fee. “This solution provides more than just information and status updates, it really offers the ability to avoid failures that result in significant costs and disruption,” says Rentschler. “This value proposition is exactly what our customers want.” Makino began development of this offering about a year and a half ago, and first introduced OEE to its customer base in September of 2018 with commercial availability February 2019. The company has seen immense interest from its customers with beta testing of the offering going very well. Makino anticipates this move to predictive service to create a long-term revenue stream that will augment its product and traditional service revenues.

Managing Major Change

Rentschler, who has been with Makino for more than 24 years, acknowledges that the move to predictive service is both a structural and fundamental shift. This transformation goes beyond the introduction of sophisticated new technology and reaches into the company’s culture, operations, and even business model. “You have the introduction of technology itself, which requires our already electrically and mechanically skilled engineers to also become capable of networking,” says Rentschler. “With this being a new offering for our customers, you also have to consider the soft skills that are necessary to articulate the value and deliver on predictive service. These changes require continued communication and employee development – you can’t achieve full success without true collaboration.” For a company that has traditionally provided products with break/fix service, the introduction of a subscription-based predictive service model is also a notable change. “For a company that sells capital equipment, the world of subscriptions with agreements, renewals, and the like is a significant adjustment,” says Rentschler. While not without its challenges, Makino’s willingness to embrace the world of Servitization is commendable – too many organizations are hesitating because its simply easier to do what they’ve always done. For those, though, Rentschler has some wise words. “Go fast, because you’re already late,” he says. “This is the future of our industry, so you either embrace it or you’ll be left behind.”

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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

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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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