In my last blog post I discussed how Cloud Computing could have serious ramifications on the future of Aftermarket Service & Support. Currently, most service delivery paradigms are oriented toward an “old school” environment of very complex, installed base of networked technology. New advances in Cloud Computing (“New School”) now make it possible for everything from software applications, to operating platforms, to computer processing and storage (i.e., infrastructure) systems to be provided remotely through the internet. To access the clouds, all one needs to do is to plug in through their favorite digital device whether that is a Notebook, Netbook, Smart Phone, or some type of industry specific portable terminal (e.g., scanner, monitor, camera, dispenser, etc.)
While there is a high probability that cloud computing will become ubiquitous throughout the industry, there is a significant amount of “old school” technology out there that still needs to be maintained and supported. The challenge is to manage old school and new school environments on an optimal basis. Companies will, of course, still need to run aftermarket service as efficiently a possible using state of the art technology and best practices (e.g., Field Service Automation, Last Mile Delivery, Resource Optimization platforms, etc.). However, there are a number of current and emerging trends which need be considered when developing an optimal strategy to support “new school” computing advancements. These include:
1.
Variable Workforce & Installed Base Management- Service Providers need to be lean and mean while they transition from the old school to the new school. Cloud Computing is very disruptive to companies who maintain a large work force of field service and depot repair workers.
Variable force models provide a mechanism to convert high labor costs, which are fixed in the short term, into a truly variable, transaction based expense. Analytics about the frequency, cause, and corrective action associated with service events are even more critical than ever before toward optimal installed base management. Other applications like Remote Monitoring provide the online engine for collecting real-time data about installed base and offer a proactive tool for anticipating and even avoiding service events.
2.
New ways of monetizing services – Revenue streams associated with on site events such as SLAs, roll-outs, configuration management, etc. may no longer sustainable in the cloud computing environment. Service providers must monetize these types of services through a subscription based model as well as make the offering easily accessible through an “As a Service” model. Payment for front-end, start-up services like training, installation, etc. are now bundled into a transaction based, subscription model. This means that service providers will need to how to learn price services accordingly which may result in amortizing the costs over a period of time. Financial modeling and CAPEX management are among the skills that Service Managers need to succeed in this new school environment.
3.
Greater Demands on Reverse Logistics - The migration to cloud computing has a significant impact on reverse logistics because consumers will likely purchase more and more low-cost devices that plug into the clouds. This leads to greater requirements on the efficient disposal, repair, and recycling of used and unwanted products. The dominate support paradigm is also changing as well. Today, a virtual “firewall” exists between those who manage field service personnel and the customer relationship, and those who manage the reverse logistics supply chain.
Progressive companies are combining field service and reverse logistics under one roof as field service becomes more of a commodity service focused on the efficient movement of resources within the reverse logistics supply chain. Whereas the customer relationship is now transitioning to those who operate and maintain the cloud.
4.
I.T. Department requirements of the Individual Consumer – The proliferation of portable, smart digital devices which can download applications and plug into the clouds requires that the individual consumer become more tech savvy. In essence, every consumer will become their own I.T. department and will need options for support. We have already begun to see the emergence of B2C service providers who can answer questions occur about interoperability, compatibility, collaboration, service quality, and supportability.
Obviously, there is a lot to think about and even more to do to succeed in this new school environment. Blumberg Advisory Group is and has always been on the forward cutting edge in terms of working with clients to pioneer new advances in Aftermarket Service. A phrase we often heard during the early years of the internet was “act now or become road kill on the information super highway”. This statement rings true today so please act now and avoid becoming road kill.
I have been following a number of discussions on LinkedIn related to the definition of exceptional service within the Aftermarket. Most of the comments take the view that front line service personnel are the key to exceptional service and that these people should be trained to delivery service with a smile, have concern for the customer, and have authority and responsibility for front line decision making. These comments suggest to me that a “warm and fuzzy” disposition is all that is needed to ensure exceptional service.
The cold and hard truth is that exceptional service involves so much more. There is no doubt in my mind that all employees, from the CEO to the front line worker, are critical to the success of any business and that customers love it when service is provided to them by someone with a smile, a warm heart, and empathic ear. However, I can think of countless times when I've seen businesses who offered horrible service in terms of timeliness, accuracy, consistency, etc. while losing money hand over first even though they empowered their front-line employees and trained them with good people skills.
To me, exceptional service means to know what the customer wants and deliver it on time, every time on a consistent, predictable, and repetitive basis. It is the role of a Service Executive to understand and deliver extra-ordinary services. The key to extra-ordinary service is to define the tangible aspects of service from the customers' perspective (That's Market Research 101). In essence, define what the customer’s expectation is in terms of time, accuracy, and availability. Obviously this may differ from industry to industry and/or segment to segment. That’s why market research is so important.
Next, have a system and processes in place to deliver service on a consistent and repetitive basis. Obviously, we will want to train all employees on these processes. Exceptional service also requires you establish a problem-resolution process to account for mistakes/error as they will happen; we are only human and nothing is “fail safe”. Last but not least, measure performance and improve where needed. Make sure everyone from the CEO to the front line worker knows what the metrics are. Continuously ask the customers for feedback on how to better meet their needs and proactively offer solutions which you've identified through your knowledge management process.
In summary, the cold, hard truth is that exceptional service is not only about people and communication, but about data, technology, and processes. State of the art service management solutions, collaborative computing platforms, mobility solutions, analytics and other related technology make it possible for any company to create an environment where every employee, from the CEO to front-line, can deliver exceptional services.
To learn more about the cold, hard truth of exceptional service and how your company can deliver it too visit our website www.blumberg-advisor.com or contact us at 215-643-9060.
"What is the primary aim of our business?" This is a quesition that a colleague of mine, a turnaround expert, used to ask the client management team on every new assignment. The Management team's answers were predictable ranging from make a profit, to increase sales and customer satisfaction, to maximize shareholder value. "No", my friend would tell them, "the primary aim is to survive".
As companies ride out this recession and prepare for a recovery, the focus will continue to be on survival. In survival mode we need to remember the effectiveness of basic block and tackle moves. The "Strategic Business Model" provides such a framework. Basic tenants of the model are that the internal operating infrastructure and external sales & marketing function must work smoothly, effectively, and in tandem in order to fullfill the company's basic strategic service direction and achieve optimal levels of service performance. This means implementation Service Marketing and Sales programs to increase density of the customer base or installed base and implementation of state of the art service management systems like Field Service Automation, Service Parts Optimization, and Dynamic Scheduling solutions to improve service quality levels. Density is the key to profits in the Aftermarket Service Industry since it results in a lot of customers with similar needs and enables a company to leverage its infrastructure to drive effecinecy and effeciency.
Just as the company needs to work diligently and effectively in building a customer base to generate revenue, it must continously find ways to drive productivity and effeciency through its service delivery infrastructure. Benchmarks measurements such as Turnaround Time, FSE Utilization Rates, No Fault Found provide an assessment the productivity and effeciency of internal service management systems while Customer Satisfaction measures the external perspective on the service peformance. These measurements should be viewed in parrallel to determine if the internal infrastructure (e.g., Reverse Logistics, Field Service, Depot Repair) is capable of fullfilling the marketing promise and vice versa to determine if the marketing promise is capable of being delivered through the internal infrastructure. The Aftermarket Serivce organizations "Strategic Service direction" is achevied to the extent these facets of the business work effectively.
In laymen's terms, operating a Aftermarket Service operation is a little like driving a car in a cross country race. While it is important to keep an eye on the road (the market), sponsors (customers), and other drivers (competitors), it is also just as important to look under the hood to make sure the engine gets us where we need to go. The primary aim of companies in the Aftermarket Service world can be best achieved through continous measurement and calibration of the internal systems and external programs. This becomes even more important when the focus is on basic survival. This is the time when Aftermarket Service executivs and managers can not afford not to give careful attentino to their company's strategic direction and business model.
The Field Service Automation landscape looks very different than it did 25
years ago when I began my career. Back
then, the market was in its early growth stage. Today, the market is mature.
Field Service functionality can be found in different types of applications
which we categorize into ERP/CRM (e.g., SAP, Oracle, Microsoft Dynamics, etc.),
Integrated Service Management (i.e., Astea, Metrix, Vertical Solutions, Amdocs,
etc.), Field Mobility (e.g., Antennae Software, Agentek, etc.), Service Parts
Optimization (e.g., MCA, Servigistics/Click Commerce, Baxter, etc.), and Field
Service Optimization (i.e., Service Power, Click Software, TOA, etc.). Applications are available for purchase either
through an On Premise (i.e., License) or On Demand (e.g., SaaS) solution. As
such the decision making process is much more complex.
In the past, the business user had a very vocal voice in the selection of Commercial Off the Shelf Systems (COTS). Sure
the perspectives of technical and economic decision makers were considered but
now these participations have a greater role in placing constraints and/or
mandates on the types of systems that are purchased. The technical platform on which the field
service application is written is often more important as the feature
functionality of the application itself. The ability of this application to integrate
with other corporate systems is also extremely important consideration and
constraint. One thing which is continued
to remain certain is the applications will continue to evolve and new vendors
will continue to enter the market while others disappear.
Given all these complexities, we believe end-users can benefit from working
with an independent and objective third party advisor such as ourselves to help
define the solution, recommend a qualified vendor short list, and evaluate proposals. We believe our understanding of where this
market place has been and where is it heading, combined with our knowledge of
the current state of the art and vendor market is critical in helping clients
to select and implement solutions which meet the needs of today and the
requirements of the future.