December 2013 - The Service Council

PTC Resolves to Connect with Machine Data, Acquires ThingWorx

By Sumair Dutta | News | No Comments

A couple of hours remain till we welcome the New Year here in the United States, but elsewhere 2014 has arrived and resolutions are being made, enacted on, and already broken. In the service space, automation provider PTC has made a splash to begin the new year with a much awaited move into the Machine 2 Machine (M2M) or more popularly known as the Internet of Things (IoT) space with the acquisition of ThingWorx. With the aid of ThingWorx’s connectivity and application development platform, PTC looks to offer manufacturers the opportunity to improve the way they design, deliver and support products leveraging remotely captured data. To achieve this vision, PTC is paying a hefty sum north of $100m dollars (Note: the Servigistics acquisition cost $220m) and believes that the ThingWorx platform will further strengthen PTC’s offerings, particularly in the Service Lifecycle Management space.

Remote service, as enabled with connected machines and equipment, is not a new concept in the realm of service and asset management. In industries such as oil and gas, utilities, medical devices and more, organizations have long connected with their serviceable equipment to aid in service processes. Improved diagnostic information captured directly from serviceable equipment has enabled:

  • Better self-service
  • More efficient reactive service with accurate knowledge of the service issue and necessary part
  • Improved preventive and predictive service as machine parameters approach performance thresholds

Outside of improving service processes, remotely captured performance data has also opened the door to the creation and delivery of net new services that enable new revenue streams for the servicing organization. These services range from reporting and analytics packages, to improved training and consulting services. In essence, remotely captured machine performance and usage data has changed and is continuing to change the relationship paradigm between servicing organizations and their customers. With the support of usage and performance data, servicing organizations can transform the way that products are delivered, serviced and managed in order to maximize the value seen by customers. Access to this data impacts the way products are priced and sold (lump sum capital equipment purchase vs. pay per use or pay for output), the way service contracts are structured (standard repair vs. performance-based), the way service is delivered, and much more (think consumables, end-of-life services and more). As a result, the servicing organization becomes much more of a solution partner thereby enabling a level of differentiation that cannot necessarily be matched by other OEMs or third-party service providers. Our research shows that increasing competition in both the product and service realms is seen as the top challenge facing organizations in 2014, as seen by 40% of respondents in a recent 2014 Trends research survey.

TSC’s research also shows that 41% of organizations (and 56% of industrial manufacturers) strongly believe that remotely captured machine data will significantly impact their service transformations in the coming 3 years. For these organizations, connected products are a viable opportunity given the reduced cost of connectivity and the ease with which we can connect with products. More so there is much more familiarity with connected products, particularly in the consumer space. However, challenges do remain in broader adoption of a full-scale connected infrastructure, and these issues will impact the success of PTC’s recent acquisition.

  1. Access Fears and Security of Data Challenges – Early adopters of remote service faced significant challenges in convincing their customers that the data being tapped into was secure and only being used for service purposes. Customers were afraid that OEMs were tapping into their IP and therefore processes and audit trails needed to be established around the type of data being accessed, where the data was being stored, and what was being done with the data. These challenges still remain. More so, with greater connectivity across the consumer and industrial worlds comes greater fear of security breaches, unauthorized access to networks, data theft and more.
  2. Building a Clear ROI for Customers – While remote connectivity is a great value to manufacturing and servicing entities, organizations have often struggled in selling its value to customers. A large percentage of customers are still struggling with an uncertain global economy and facing tight cost constraints. Therefore, these organizations are reluctant to pay more for remote service if they don’t see a direct ROI or cost benefit to themselves. As a result, servicing organizations often struggle with the pricing and bundling of remote service with new equipment of service contract sales.
  3. The Internal Sell – Organizations continue to struggle with incentivizing and motivating their sales teams to actually sell service and not give it away for free. The added sale of remote connectivity and the value relationship that needs to be established add another layer to this challenge.
  4. Data Everywhere – Remote monitoring and connectivity tools greatly increase the amount of product performance data available to service organizations. This isn’t always a good thing if organizations aren’t afforded the analytical and data management tools to make use of the data. The ThingWorx platform currently offers some analytical capabilities to react and respond to real-time data feeds, but deeper data analysis tools are lacking. For strategic decision making around service direction, product engineering and more, PTC will need to look at providing enhanced analytical capabilities via a partnership or subsequent acquisition.

2014 will be a vital year in the growth of the Industrial Internet of Things. Major software providers are clamoring to get a seat at the table and the PTC acquisition is the first of many to occur in the space in 2014. We can expect other enterprise software providers to make inroads in the space (applications, platforms, devices and services) along with further investments in analytics and big data tools to enable organizations to manage and sift through the increasing amount and burden of performance data available.

Research Spotlight: 3 Questions with Anthony Moffa from Tyco Fire Safety Products on 'Service Culture'

By Sumair Dutta | Perspective | No Comments

We spent some time with Anthony Moffa on a recent webinar tied to Service Culture and its role in supporting Service Transformation (Recording available here). Anthony is the Senior Manager for Global Data Services at Tyco Fire Safety Products and brings over 25 years of experience in various service, operations, and IT roles. In fact, it was his past experience at a start up that fueled his interest in the role of culture to support transformation initiatives. We sat down with Anthony to get his thoughts on culture.

TSC: Given your experience in a variety of IT, operations and service roles, how do you define a service-focused/oriented culture? What does a customer-centric culture mean to you?

Anthony: It’s a bit cliché, but you need to start with the mindset that the customer’s job or experience is the focus, not your product or service. Too often we work to solve the symptom or engineering problem rather than use our engineering skills to solve the customer’s problem. That’s the subtle difference between being product or process-centric as opposed to customer-centric. So for example, in my business we design, install and service fire detection equipment. The customer generally doesn’t care what we’ve installed or how it works; they just care about meeting the code requirements, keeping the fire marshal happy and getting a certificate of occupancy. Customer-centricity is critical especially if your products are commoditized. In that case you really don’t compete on the product it’s all about the experience. In my startup experience, I learned a simple lesson. You don’t need perfect products if you have exceptional service. I’m not proposing that cheap or poorly designed products are acceptable; I’m just saying that a customer will be OK with the occasional hiccup if the service is exceptional.

TSC: Where does one get started when considering a cultural transformation in a very product-centric organization?

Anthony: Overall I think it depends on your business. There’s always the option to study and imitate other service centric organizations but that has limitations.  I’m a big fan of ethnocentric voice of the customer, sending your product people into the field to meet your customers and spend time with your technicians to experience their jobs. I’m also a proponent of hiring people with service attitudes. Service-centric means I have to address the people issues as well as the product or technical ones.

TSC: Are there examples of organizations that have made successful cultural transformations when it comes to service?

Anthony: I think GE’s home appliance service organization is an example of a service culture turnaround that had a number of moving parts and scored huge success with performance and customer satisfaction. They used technology to completely redefine the home appliance service experience. Having experienced it firsthand I can attest it was actually pleasant. Another one that comes to mind is Wide Open West or WOW Cable. They compete with the likes of Verizon or Comcast and they actually charge a bit more for their service but they keep growing and they have a very loyal customer base as a result of their internal culture and customer focus. There are also great examples in the consumer space tied to Nordstrom and Zappos. These are more and more pertinent as our customers are quite often exposed to these B2C experiences as consumers and begin to expect the same experiences in their B2B dealings. As I mentioned earlier, one has to be careful in trying to imitate other organizations. As a consumer Nordstrom is an enjoyable purchasing experience, it’s personalized service from trained, well appointed and generally pleasant sales people. Taking that same approach in my business though may not translate completely. For my customers it can often be about freeing up their time, not taking up their time.

You can hear more from Anthony on our Role of Culture in Service Transformation webinar. If interested in learning more about the three questions series or to nominate a future participant, feel free to reach out to me at sd@servicecouncil.com or via @tservicecouncil or @suma1r. Also, check out the newly released agenda for our 2014 Smarter Services Symposium. Feel free to register or send me any questions regarding the event.

Lessons Learned from Field Service Automation Implementations

By Sumair Dutta | Perspective | No Comments

Available field service research, including ours at The Service Council, highlights the benefits of field service and mobile automation. From reduced paperwork to reduced errors, to greater productivity and profitability, there are a myriad of reasons to move away from paper-based field service processes and to automate.

However, quite often we in the analyst community, seem to indicate that automation is as simple as flipping a switch. One minute you’re paper-based, and the next you’re automated and enjoying all of the benefits highlighted above. In addition to money and time, investments in leadership, collaboration and discipline are required to support successful automation implementations. In our research on mobile device implementations, 49% of organizations indicated that their projects ran over budget with another 57% stating that their projects were not completed on time. It is noteworthy to report that between 26% and 32% of organizations didn’t know whether they were over budget or beyond pre-planned timelines, another scary thought.

Let me state that implementation challenges aren’t just specific to the field service arena. These challenges have persisted in enterprise-wide solutions like ERP or CRM, as well as function-specific solutions tied to things such as Voice of the Customer or Customer Communities. Given the increasing importance being placed on service and support, and specifically the importance being placed on front-line empowerment, the focus on field service implementations is vital. My journey around the investigation of field service implementation best practices or lessons learned (or ‘I wish I had known’ moments) commenced at a recent ClickSoftware North America user event wherein current ClickSoftware customers were sharing ideas and best practices on managing their Click implementations. (Some of these ideas are captured in my ClickConnect summary blog.) On a side note, kudos to ClickSoftware and other providers in the space for increasingly opening up forums of communication for customers to learn, share, and exchange ideas tied to gaining the maximum utility from their adopted solutions, as well as, the opportunity to collaborate with peer organizations. Quite often learning comes in the form of complaint and mis-steps but as Bill Gates states, “Your most unhappy customers are your greatest source of learning.”

We have data that points to some of the best practices in mobile and field service implementations, but for this project, I interviewed 10 different field service organizations of various sizes, with different implementation timelines, and a variety of field service solutions. To list all the best practices or lessons learned here wouldn’t be optimal, so I thought I would list the top two answers at various stages of the implementation cycle.

Pre-Implementation

  • Determine a baseline for current performance
    ROI is key when undertaking an automation project and to that end, it is essential to understand which metrics need to improve and by how much. ROI shouldn’t only be calculated on cost savings or time to recoup cost of investment.
  • Make sure you have an accurate customer database
    The link between customer databases, CRM and field service is extremely valuable to ensuring seamless service delivery. Investment in a project without a clean customer database can lead to incomplete results.

Honorable mention:

  • Be very specific in the questions you ask to provided reference customers.

 

During Implementation

  • Understand the true cost of making changes
    This isn’t just tied to the cost of configuration changes or customizations at the point of solution development, but also in the cost associated with making updates to these configured or customized solutions. Even the littlest change in the beginning can have a compounding effect when it comes to cost.
  • Do not understaff the implementation team
    A cross-functional team involving field engineers, IT, service operations and more is vital to any implementation from the point of needs recognition all the way to go live and beyond. During the process of implementation, this team leads the charge in delivering requirements and modifications to the vendor and essentially serves as a translation layer between the two organizations.

Honorable mention:

  • Develop a beta group of testers in the back office as well as the field
    Beta groups also support the development of champions who assist in driving user adoption. Also, ensure that you have analysts in place that can review incoming data during the test stages in order to suggest modifications to data reports, dashboard formats and more.

 

Post-Implementation

  • Have established and previously agreed processes and timeframes for fixes
    In every implementation, there are mis-fires or errors that need to be addressed. Building in a mutually agreed plan to deal with fixes or changes post-implementation can go a long way in ensuring that these changes are addressed in a timely and effective manner.
  • Establish a team focused on continuous improvement and be persistent in providing ROI information to upper management
    Post go-live, it is essential to have a team in place that can review performance data and prioritize improvements that need to be made to the solution in itself or to the processes impacted by the solution. To support these additions, it is essential to provide management with consistent visibility into the ROI of the established solution.

Honorable mention:

  • Internally demonstrate the value of the implementation to the process and         the customer

These are some of the best practices tied to recent field service implementations that we’ve been witnessing through our ongoing research coverage. In summary, most interviewees highlighted the challenge of balancing a well-defined (and possibly rigid) implementation plan with the opportunity to be flexible in picking solution attributes. For most of these organizations, the key was to have a well-established (an often cross-functional) team in place to overview and manage the implementation process with specific business objectives in mind.

I’d be interested to learn from others with regards to their implementation best practices, please do post in the comments section.

Note: This blog is also posted on ClickSoftware’s blog site Clickipedia.

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