May 2015 - The Service Council

Notes from Maximize 2015: Elevate, Connect, and Succeed

By Sumair Dutta | News, Perspective | No Comments

It’s been a busy couple of weeks with some major events in the service management and field service spaces. Hence the slight lag in my reporting. Between May 13-15, John Carroll and I had the opportunity to attend Maximize 2015, ServiceMax’s major user event in San Francisco, CA. The event was extremely well attended with over 600 participants from brands such as Coca Cola Enterprises (Europe), Schneider Electric, and GE Software. Several TSC members and research panelists were also in attendance.

There was a lot of information shared across the two days of the event and I’ll attempt to be brief in my summary. Here goes:

1 – Overall Themes

  • Service transformation is still a major challenge. While some organizations such as McKinley have invested in and seen incredible returns in service revenue (100% growth in 2 years), others are still struggling with the internal business case for an investment in service. Yet, the tide is turning as more organizations (even extremely large ones) are beginning to transform from product organizations to solutions partners. The information exchange enabled via service relationships enables this transformation.
  • Talent is and will be a major challenge. In our research, 70% of organizations indicate that they will be significantly impacted by a wave of retiring workers in next 5-10 years. The aging workforce is a major challenge across all geographies and all engineering-related disciplines. It balloons into a talent crisis when organizations are unable to deal with the knowledge loss and are unable to recruit the necessary talent. While investments in efficient processes and solutions might eliminate some field service tasks, there will continue to be an unfilled need for field service engineers. This challenge will lead to a significant rethinking of processes and plans around recruitment, training, outsourcing, workforce engagement, succession planning and more. Note: McKinley’s Kevin Rusin does not have a talent issue due to the investments made in modernizing the way field service is delivered.
  • An increasing level of maturity around mobile. TSC’s mobile maturity model for field service consists of 4 stages- Replace, Remove, Resolve, Build. (We started with 3 stages where Resolve and Build were combined). These stages reflect the complexity of mobile use in field service organizations. We are finally seeing organizations treat mobile as more than a paper replacement toolset (Stage 1). With better access into asset information, customer history, and resolution information, organizations are looking to eliminate the unnecessary tasks in a field service agent’s workday and are looking to leverage mobility as a platform to enable resolution and relationship building. Coca Cola Enterprises shared an interesting example where the removal of unnecessary administrative tasks (by 50% with the investment in technology) led to increased productivity. Increased productivity also enabled the field service business to increase its coverage of third-party machines in facilities such as McDonalds, Starbucks, and Subway, which has resulted in a 275% growth in service revenue over a 5-year period.
  • IoT ready. GE Software spoke of the opportunity in the Industrial Internet of Things and highlighted the challenge in managing the large amounts of data generated by industrial assets. For instance, a single wind turbine can generate 4.8TB of data daily leading to a 100TB of data generated by a windfarm. The Internet of Things will alter the way organizations deliver service. There is no question about that. The real question is around the sophistication of organizations to dig into vast quantities of performance data and yield the necessary insight to change service delivery and impact customer realities. Some of our thoughts on IoT in the enterprise are available in our latest research and webcasts.
  • There is the need to compete on knowledge. Customer knowledge, machine knowledge, technical knowledge, resolution knowledge; these are integral pieces of the service delivery equation. Organizations are not only looking to improve knowledge creation, access, and delivery internally, they are also looking to extend knowledge out to customers to improve self-service performance. In our 2015 preview research, knowledge management was identified as a prioritized area of investment.
  • Room for innovation. Gary Hamel, business thinker and management speaker, keynoted Day 1 of the event and shared his thoughts on innovation. Just as service needs to be built into the culture of the entire organization, innovation needs to basic tenant of growth across all levels of the organization. To quote Prof. Hamel, “New thinking is more important than new technology.” New thinking requires us to make innovation a priority in our day-to-day. More here – https://hbr.org/2015/04/the-5-requirements-of-a-truly-innovative-company
  • Service to success. With access to asset performance and customer usage data, service organizations can look to offer outcome and consumption-based services to customers. Instead of making the capital equipment purchase, customers can now purchase the output of the equipment or the utility driven by the equipment. These outcome-based models are popular in high-tech hardware and software. Variations tied to consumable usage are being leveraged in other industries such as consumer electronics and medical devices. What I find interesting is the use of usage data (or adoption data) in customer success campaigns wherein organizations can work with customers to improve the value they get from products and services. E.g. If a customer is only using a few features on a product and not the entire set, then they can be made aware of the additional features available in support of business objectives. In some instances, maybe the customer doesn’t need the unlimited plan of all they are consuming is a certain feature set. Customer success requires a focus on customer value, insight into customer consumption of products and services, and a plan to communicate value to customers.

2 – ServiceMax Notes:

Maximize is a big conference in the field service space. ServiceMax has done an incredible job of growing its customer base across all levels and geographies. Also worth noting is the expanding partner network in place (up to 35 implementation partners and another 35 Marketplace partners) supporting a growing field service ecosystem.

Product Updates

  • Installed Base Management – With the planned release of ProductIQ (Summer 15 release), field agents can have better access to equipment information leading to better levels of resolution and an increased opportunity for lead capture (See comments on mobile maturity)
  • IoT with PTC – ServiceMax announced an IoT partnership with PTC ThingWorx wherein machine data pulled via the ThingWorx platform will be integrated with service workflows in ServiceMax. Also worth noting is that ServiceMax will serve as PTC’s field service extension moving forward, which opens up significant enterprise opportunities in PTC’s existing PLM and SLM base.
  • Video and Wearables – There wasn’t a specific announcement tied to this but there were a number of partners in attendance, such as SightCall and Pristine, displaying their video solutions for field service. In most cases, partners have been smart to remain device agnostic and focus on the quality and integrity of the video. Our 2015 field service research shows that 45-55% of field service organizations are evaluating video-based inputs in their field service operations. More on this topic in another blog.

So much for brevity. If you were at Maximize and have additional comments, please feel free to post. If you weren’t there and have some questions, post a comment or send me a note at sd@servicecouncil.com.

The Internet of Things Establishes a New Normal in Service

By Sumair Dutta | Perspective | No Comments

The Internet of Things (IoT) delivers a significant boost to organizations looking to provide better service and maintenance. Data captured directly from equipment and machines allows servicing organizations to better predict future failures and resolve them prior to occurrence. In cases where incidents do occur, intelligent failure analysis and diagnosis allows for intelligent dispatch of the right resources to ensure that the issue is resolved effectively on a first-visit.

In short, data afforded by a connected service infrastructure allows for the service organization to:

  • Predict and prevent future service events
  • Plan for improving support tied to future events
  • Respond effectively to occurring service events

Data captured directly from machines can also allow for the generation of new service models or new revenue generating services. For instance, direct insight into machine usage or consumable levels can lead to direct shipment of necessary consumables for self-service. More so, insight into usage trends can allow for the servicing organization to sell reporting or consulting services at a fee. These services enable the customer to maximize the uptime and utility of their assets and products.

Our research shows that organizations that have made investments in remote monitoring solutions and technology have seen significant improvements in asset uptime and first-time fix. These improvements aren’t enabled solely as a result of the technology, but due to the maturity of these organizations to incorporate data directly captured from machines into their service and customer interaction business models. Data captured via the Internet of Things isn’t the only data available to these organizations. Machine data needs to be paired with front-line performance data, customer data, resource data, warranty data, and more, to get a true picture of the service delivery ecosystem. Therefore organizations need to have the infrastructure in place to capture data, aggregate data, analyze data, and subsequently convert this data into insight. This insight doesn’t only a yield a more predictive service organization, but one that is better across all lines of service, ranging from predictive to reactive to self-service.

There are challenges with incorporating IoT into the service business model. In our research, the major roadblocks touch on the cost of deployment, the complexity of deployment (tied to new and existing infrastructure), and the hesitance from customers to have ‘others’ tap into their machine data and procedures. The first two challenges continue to be impacted by improvements and enhancements in technology and connectivity.

The third challenge around customer access is a major hurdle and is one that needs to be addressed before organizations jump into their IoT journeys. Currently, the inherent value of IoT is seen in more effective service delivery, a benefit primarily felt by the servicing organization and not the customer. It is true that improved asset availability as a result of a connected ecosystem is a significant customer benefit, but it is one whose impact is being eroded, as IoT-enabled service becomes the new normal. More so, customers are becoming much more aware of what they have to give up (their asset information) in exchange for what will become a normal level of service.

As a result, organizations are beginning to look for new ways to communicate and deliver customer value tied to their connected offerings. In fact, the ability of organizations to continuously find new ways of delivering customer value and communicating this value will determine the winners in the new IoT-enabled era that we will enter. Uptime is a good starting point, but what else can be offered to the customer in order for them to allow the servicing organization to tap into their machines. Is it in the form of discounted contracts, more convenient payment terms, or a more customer friendly consumption model? At this point, the servicing organization still holds the power, but as connected service becomes the new normal, customers will look for better allowances to allow a particular service provider to tap into their information.

I’ll be chatting about this new normal on an upcoming webcast on May 12 at 12pm Eastern. You can register for that webcast here.

This post also appears on Verisae’s official blog.

Activate Your Service Connect™ Membership Learn More

Login