November 2012 - The Service Council

Renee Cacchillo, Vice President, Service Delivery @ Safelite Autoglass has accepted a position on the Advisory Board

By John Carroll | News | No Comments

We are pleased to announce Renee Cacchillo, Vice President, Service Delivery at Safelite Autoglass has accepted a position on The Service Council Advisory Board. Renee will play a vital role in our future direction in her role as an Advisory Board member including her involvement as a Speaker at the 2013 Smarter Services Executive Symposium.

Please join The Service Council in welcoming Renee to the community!

Building the Business Case for a Mobile Workforce Management Solution

By John Carroll | Perspective | No Comments

There never has been a better time to build a business case for implementing (or upgrading) a Mobile Workforce Management solution. A majority of services executives foresee a brighter future in terms of accelerating service revenue growth and, accordingly, have turned their attention away from dealing with the years of cost-cutting initiatives they were forced to implement as a result of the recession, to a more positive strategy of managing revenue growth in an expanding global services economy. But they need the tools to in order to execute.

tech in field small

The findings from The Service Council™’s Q4 2012 survey on “Driving Service Revenues” support the case for an expanding economy as for the first time since the recession, services executives appear to be much more focused on managing for the future rather than simply attempting to pick up the pieces from the most recent economic downturn.

It looks like a bright future, too, based on the survey results. For example, nearly two-thirds (63%) of survey respondents believe their services-related revenues are going to increase over the next 12 months, and almost everyone (94%) agrees that they do not expect revenues to backslide in 2013. As a result, many are beginning to invest in new technologies to keep the momentum going.

A majority of services executives also have plans, for the first time in several years, to use their expanding revenue base to strengthen their respective services operations. Almost two-thirds (62%) plan to leverage their already strong internal service culture, coupled with their expanding revenue base, to focus on the following key outcomes:

  • More satisfied customers
  • Deeper partnerships with customers
  • More consistent service performance and delivery
  • Stronger competitive advantage
  • Enhanced market image and reputation
  • Healthier bottom line for the organization

As all of these, taken together, constitute a lofty set of goals, they cannot be attained simply by doing things faster, cheaper or by throwing more people at the problem. They require a comprehensive, structured and coordinated approach to services management and this, in turn, requires the acquisition of new service management and delivery solutions that can only be enabled by the adoption of new technology.

Further, unless the organization has all of the right technology solutions already in place; performing all of the required functions; and providing ongoing measurement, documentation and reporting capabilities, it may find itself falling further and further behind both the competition and – even more importantly – its customers’ (and the market’s) expectations.

The leaders in the global services community have already specified what they plan to do as the economy improves. First, they plan to strive toward building their revenue base in order to improve overall service profitability. Second, they plan to use these newly acquired financial resources to execute programs to improve customer satisfaction and loyalty. Third (and we haven’t seen such a pronounced push in this area for several years), they plan to allocate a portion of their growing profits to fund the introduction of new, expanded and/or improved services offerings to a similarly expanding marketplace. All of these plans fall under a general umbrella of improving existing levels of service performance and delivery for the express purposes of:

  • Improving the overall customer experience
  • Strengthening the bottom line
  • Growing the services business portfolio

But, there are also several less-than-positive reasons for why many other services organizations are struggling to find the right solution to help them manage their workforce. That is, that many – just simply put – have perennially not been able to meet their performance targets, and the prospects for doing so without the benefit of the right technology, tools and resources remain rather slim.

Perhaps one of the more compelling reasons for why some organizations are beginning to move more quickly to acquire a new, and/or upgraded, Mobile Workforce Management solution is that their past performance has not lived up to either their – or their customers’ – expectations. Other recent research conducted by The Service Council™ confirms the less-than-spectacular performance that too many services organizations have faced. For example:

  • Nearly half (46%) are not attaining at least 90% customer satisfaction
  • More than a third (37%) are not attaining at least 30% service profitability
  • More than a third (35%) are not attaining at least 90% SLA compliance

These current performance lapses represent only the tip of the iceberg for some organizations when you consider that their key performance metrics have actually gotten worse over the past 12 months:

  • More than three-quarters (77%) have not decreased their average Mean Time to Repair (MTTR)
  • Almost three-quarters (71%) have not decreased their average cost-to-dispatch
  • Almost half (42%) have not increased their workforce productivity (i.e., average daily number of completed calls)

Whether the organization’s motivation is to take advantage of an upturning economy to move toward more effective service delivery performance through a state-of-the-art Mobile Workforce Management solution, or simply that the time has come to finally step up to the type of solution that will enable it to meet its revenue, profitability, satisfaction and marketing goals, one thing is explicitly clear – the time is now for finding – and acquiring – the most effective Mobile Workforce Management solution that can leverage the organization through the anticipated economic upturn.

For more information, or to get the chance to participate in a Q&A session with Bill Pollock, President & Chief Research Officer of The Service Council™, simply click here to register for the upcoming Smarter Services™ Technology Evaluation Series: The Road to Mobile Workforce Management Transformation.”

The Service Council Expands Its Consulting and Advisory Coverage

By John Carroll | News | No Comments

Former Polycom Services Executive Team, Led by SVP & GM Geno Alissi, Provides the Industry’s Most Complete Portfolio of Consulting, Advisory and Mentoring Services

BOSTON–(BUSINESS WIRE)–The Service Council™, the global community where service executives “share, shape and sharpen their strategies,” today announced five new appointments to its Research and Advisory leadership team, including:

  • Geno Alissi – Senior Vice President & Principal Consultant
  • Amit Akkad – Vice President & Principal Consultant
  • Richard Grumet – Principal Consultant, Sales, Marketing & Business Development
  • Marge Hanson – Principal Consultant, Finance
  • Lyle York – Principal Consultant, Service Delivery and Operations

Geno Alissi, former Senior Vice President and General Manager of Global Services at Polycom, Inc., assumes operational management of the staff, reporting to Bill Pollock, President and Chief Research Officer of The Service Council. Geno is widely recognized among colleagues and clients in the services community as “a results producing executive with a passion for the industry and a personal commitment to both customers and the people with whom he works.” He is also acknowledged as an expert at managing high-tech services organizations.

Under Geno’s leadership, between 2003 and 2010, Polycom underwent an impressive service transformation growing its annual service revenues by 500 percent to more than $175 million, nearly doubling its gross margin and increasing its contribution margin by nearly two-and-a-half times.

Alissi will be supported by four former members of his executive team at Polycom, including Amit Akkad (VP Global Services), Rick Grumet (VP Worldwide PGS Sales), Marge Hanson (Senior Director of Finance) and Lyle York (VP Customer Support).

“The ability to supplement our existing community outreach with the knowledge and experience that Geno and his former executive team from Polycom bring to the table, uniquely positions The Service Council as the leading research, advisory, consulting and mentoring resource that supports global services organizations in embracing a Smarter Services™ culture,” said John Carroll, CEO of The Service Council.

Pollock agrees that, “The combined power of The Service Council’s research process already in place through our ongoing industry-wide research initiatives, coupled with the experiential consulting, advisory and mentoring capabilities offered by Geno and his team, positions The Service Council as the leader in providing global services organizations with cradle-to-grave support in their quest to attain Best Practices.”

“I am excited to be joining The Service Council and look forward to continuing the close collaboration with my former executive team in supporting our community,” added Alissi. “It will be our mission to assist global services organizations in attaining Best Practices by embracing the Smarter Services philosophy established by The Service Council, and delivering as part of our comprehensive Service Index™ offering.”

Press Contact:

The Service Council™
John Carroll, 617-717-8300
CEO
jtc@theservicecouncil.com

Driving Service Revenues Isn’t Enough; The Focus Needs to Be on Sustainable Revenues!

By John Carroll | Perspective | One Comment

Overall, nearly two-thirds (63%) of the more than 500 survey respondents from The Service Council™’s Driving Services Revenue Benchmark, report that the contribution of service revenues in their respective organizations is expected to increase during the next 12 months. In fact, 94% foresee no lessening of the overall contribution of service revenues during the period (i.e., stay the same, or better).

Is this a sign of an expanding services market? Or, merely Best Practices organizations executing on their best practices? The data strongly suggest that it is both of these key factors.

Much of the traditional strength of the service revenue pipeline comes from a variety of common sources layered across all major services organization segments. These service revenue sources essentially lay a strong foundation for maximizing the overall dollar potential for increased revenues over a prescribed period of time.

For example, a majority of organizations presently benefit from the use of at least four primary sources, including:

  • Service performed under Service Level Agreements (SLAs), or contracts
  • Service performed on a Time & Materials (T&M) basis
  • Sales of SLA / service contract renewals
  • Sales of service parts

Other commonly cited sources include:

  • Sales of professional services
  • Sales of extended warranty contracts
  • Service performed under manufacturers warranty

The common thread among each of these sources is simple: Once you have the customer in your grasp, you can depend on it over the long haul to contribute additional (and sustainable) revenues through add-on offerings including extended warranty contracts, contract renewals and parts sales, etc. Even T&M customers typically come back to you because they have already purchased your products and/or services in the past.

The days when services organizations could afford to earn the vast majority of their revenues and profits through hardware and software maintenance and support – exclusively – are over. This is a fact that the industry leaders have recognized for a long, long time. In today’s (and tomorrow’s) services marketplace, the “real” money is to be made from selling the value-added services and “pull-through” products to both the same, and a new (to you) customer base.

Today, everyone basically acknowledges that the margins on products are gone; but not all have also acknowledged that the margins on traditional services have also disappeared. That is why the only way to ensure both a strong – and steady – revenue stream is to broaden the service offerings you deliver and provide the added value to a hungry and expectant market base.

For more information on this subject, check out The Service Council™’s Readership Library at: http://theservicecouncil.com/serviceconnect/readership-library.

Until next time, keep your customers satisfied!

U.S. Service Sector Growth Eased in October – But Hiring Is Up Significantly

By John Carroll | Perspective | No Comments

According to a report in the November 6, 2012 issue of The New York Times, “The rate of growth in the nation’s services sector slowed modestly in October, though a measure of employment improved to its highest in seven months.” As such, the newspaper suggests that the economic recovery will likely “remain modest” in the foreseeable future as a result.

The Institute for Supply Management’s (ISM) services index reported a slight decline from 55.1 in September 2012, to 54.2 in October. While this represented a decrease of only 1.6 percent, market forecasters had been primed to expect a slight uptick to 54.5. According to Reuters, an index above 50.0 “indicates expansion in the sector.”

ISM uses similar indices to measure new orders (decreasing from 57.7 in September to 54.8 in October) and employment (increasing from 51.1 in September, to 54.9 in October – its highest level since March, 2012).

However, since Summer 2012, the services sector has managed to expand moderately, although manufacturing has contracted to a small degree. Nonetheless, the October index represented the first decline of any kind in several months.

The Times concludes that each of these reports, taken together, suggest an economy that is growing at a rate of about 2 percent per year, with the services sector taking the lead over manufacturing. Estimates for Q4 growth see this pattern continuing.

All in all, services sector growth in the United States, albeit somewhat moderate, still appears to be stronger than in other parts of the world. For example, the Times cites slowing growth in China, and the “slowest rate in almost two years” in the UK.

The stage was set earlier in the year, and Q4 should be very interesting to watch. We’ll keep you apprised.

Until next time, keep your customers satisfied!

Why Field Service Has Become More Important in a Tight Economy

By John Carroll | Perspective | One Comment

The findings from The Service Council™’s most recent survey on “The Role of Service Culture in Driving Service Revenues” clearly support the case that Field Service remains a critically important component of the overall services economy and, in fact, is once again increasing in importance among the most successful services organizations.

For example, according to a near majority of more than 500 survey respondents, the top benefits of a strong service culture with respect to their impact on driving service revenues are (1) more satisfied customers (62%), (2) deeper partnerships with customers (48%) and (3) more consistent service performance and delivery (48%). As such, the common thread that ties each of these three factors together is, of course, the field service organization.

Past research has shown that it is primarily field service operations that ultimately define how customers “see” the organization in terms of satisfaction, partnerships and delivery. While other components of services operations also have a direct impact on the overall credibility and reputation of the organization, customer partnerships typically start at the individual field technician level and are personally cultivated over time. It is essentially at the field technician level where (1) customer relationships are first established, (2) the closest customer partnerships evolve, and (3) the performance of the entire organization is measured by customers – quite a significant load falling directly on the shoulders of the field technicians.

In a world where more services executives measure customer satisfaction (65%) than service profitability (59%), and more organizations measure service revenue per field technician (28%) than total cost of service resolution (20%), the field organization is likely to remain a top priority. However, it will still need to be fully supported within the organization – from the bottom down, and the top up – with respect to the effective management of all customer touchpoints.

Again, while not all of these factors touch upon field operations for all respondents, it is among the most successful of these organizations that provides their field operations with all of the tools and resources required to build, maintain and sustain partner relationships with their customers.

To read the entire article, look for The Service Council™’s monthly feature on the inside back page of the December 2012 issue of Field Technologies magazine.

Until next time, keep your customers happy!

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