Uncategorized Archives - The Service Council

Proactive. Predictive. What’s the difference?

By Sumair Dutta | Perspective, Uncategorized | No Comments

There’s no doubt that service businesses are organizing themselves to be more predictive in the service that they provide. Instead of responding to a service event, they can now act on information and data available and prevent future repair issues with predictive actions. This has significant ramifications, especially on the customer who is potentially facing a shutdown of operations due to product failure. The impact on the service organization is significant too, as resources don’t need to be scrambled to meet an emergency service request. Being able to predict service needs allows the service organization the luxury to plan for future resource needs.

Achieving predictive service outcomes can be expensive. One can approach predictive service with more of a time-based preventive maintenance model, but that doesn’t really weed out all service issues and therefore doesn’t afford all the cost benefits of reactive service avoidance. We also believe that service buyers will begin to question the value of preventive maintenance schedules without real insight into how these visits are driving the outcomes desired by their businesses.

For true predictive service, one needs to get a better view into what’s happening with products in the field. This view isn’t limited to the operating performance of the product or the equipment, but also covers the environment that the equipment is in, and the nuances of how operators are handling the equipment. To enable real-time data capture and management, many organizations are heading towards the introduction of more sensors on their equipment. Anyone who has tried to do this knows how difficult it is. Sensors raise the short-term cost and complexity in R&D cycles and can get discarded in R&D’s attempts to remain on time and under budget. It takes a senior business leader who understands the long-term enterprise value of an investment in sensors to ensure that R&D and service can work hand-in-hand. Even then, it isn’t guaranteed that the service organization will receive all the information needed to develop a predictive picture. Sensor data can be supplemented by data that’s captured through customer requests or during on-site service visits – all models of data capture that should be considered by service organizations looking to introduce predictability into their delivery models.

While predictive service is being enabled, organizations mustn’t lose sight of the opportunity in becoming more proactive in how they approach their customers. Predictive service is one element of a more proactive customer management strategy. We believe that a proactive support strategy encompasses the following elements:

1- Predictive Service / Maintenance
2- Resource Planning for Predictive Service Operations
3- Proactive Operations Management
4- Proactive Installed Base Management
5- Proactive Customer Communication

I recently spent some time highlighting the various stages of The Service Council’s proactive support strategy on a Smarter Services™ Webcast called “Raising the Bar for Field Service with Predictive Technologies.” To hear a recording of the webcast, please click here. This webcast is supported by ClickSoftware and includes a wonderful presentation by team members at Stedin a leading energy management company based out of the Netherlands, who are focused on driving business value with the aid of predictive technologies. Next week, I’ll be summarizing my thoughts and presenting them on a post-event blog available on The Service Council’s website.

On the Service Leader’s Mind for 2018: Service Revenue

By Sumair Dutta | Uncategorized | No Comments

We just published our 2018 Service Leader’s Agenda Report (Get it here). One of the key takeaways from this report was the refocus on Service Revenue as a metric of success in 2018 and our conclusion is that service leaders are finally putting the infrastructure in place to achieve revenue growth.
Top Metrics for Service Leaders in 2018

Earlier this week I had the opportunity to chat with several service leaders on the topic of revenue growth. These leaders reflected a range of industries from medical devices to facilities management and financial services. The key takeaways and actions being prioritized are:

Know Your Installed Base

In this date and time when every single movement and action can be tracked, one would assume that companies have a good handle on their installed base and the associated contract coverage. Getting insight into installed base status and coverage is a great way to identify near-term revenue opportunities.

Talk to Your Customers

What your customers will want 3-5 years from now is very different from what they expect and want today. That said, they are already envisioning what service should look like and what they will be willing to pay for. While we talk about the role of consumerized experiences in the enterprise world, the impact of true consumerization will be felt in a much more critical way in the coming years. Customers might be willing to accept that the equipment they hold today is outdated but will wonder why the next generation of available equipment is already outdated if it doesn’t come with connectivity and desired service and support resources. As one service leader put it, “Customers don’t want to have to tell us what’s wrong, they want us to tell them.” The equipment of tomorrow better be ready to enable and support changing service needs.

“Customers don’t want to have to tell us what’s wrong, they want us to tell them.”

Expand You Service Product Portfolio

While service contracts, time and material work, and service part sales, continue to be the revenue stalwarts for service organizations, there is an opportunity for the provision of new services. In instances where customers are beginning to self-maintain, there might be appetite for training, knowledge, and other information-based resources. In other industries, new service contract or agreement terms and types might address the needs of customers who interact with or use equipment in different ways.

Get Sales on Board

All the steps above can lay a strong foundation for service growth, but eventually someone needs to approach and talk to the customer. This is where the sales team’s comfort with and desire to sell service offerings becomes increasingly important. At a recent meeting with a large service company in the facilities management space, I was happy to note that the organization had finally tweaked its sales compensation models to align incentives with desired action around service products. In this, the company had put incentives in place for standard service products and services but had also put in incentives for getting customers connected. Incentives for service sales need to be paired with improved training, better service offering collateral, and dedicated resources to aid sales agents’ in their interactions with customers.

These are just a couple of the ideas discussed on the recent IdeaShare (see future events) around revenue growth. They also happened to be most foundational. Technician lead programs, self-service portals with ecommerce functionality, and multi-vendor services, were also discussed as arenas for untapped revenue.

We’re currently looking into the world of new services via a research survey (Link). The survey looks into the types of services that are being evaluated in support of service revenue growth. If interested, please do participate. We expect to share the results in the coming weeks. You can also access a copy of our Service Leader’s Trends report to learn about some of the key initiatives and focus areas for the coming 12 months.

Friday Service Recap: AHT, Service Excellence, Silos, and More Customer Service Stories for the Week

By Aly Pinder | Uncategorized | No Comments

Every week, Sumair and I will post our most interesting service-minded stories for the week as part of a Friday recap. We’ll comment on one story each and then add 3 others for your review.

For the sixth installment, and week 11 of 2017:

Sumair’s pick:

Topic: AHT. It’s time to Move On.
Source: HBR: https://hbr.org/2017/02/call-length-is-the-worst-way-to-measure-customer-service

Commentary: We agree that AHT (average handle time) shouldn’t be the barometer for customer support performance. As customers engage in a higher degree of self-service for low complexity issues, they are likely to reach out for live support for issues that are complex and require proper diagnosis and care. In this, putting agents on the clock drives the wrong behavior. TSC’s research has shown that organizations are slowly gravitating towards a framework of scores to measure customer service and customer experience. Most organizations still look at CSAT and loyalty scores. An emerging group, 37% of our group, now measure and evaluate customer experience on the basis of customer effort or ease of doing business.

The authors do indicate that AHT is useful for an organization to assess its overall performance and its cost drivers and can help prioritize future investments. That said, agent performance and recognition should be based on resolution as opposed to speed.

Aly’s pick:

Topic: Breaking down silos to create culture of service
Source: Marketing Week: https://www.marketingweek.com/2017/03/09/siloes-bureaucracy-holding-back-customer-experience-study-finds/

Commentary: The siloed organization is nothing new. I feel like we’ve discussed this topic for a decade already, if not longer. But as this article highlights IT departments are still siloed from service, and HR still doesn’t work with customer support to identify and deploy a strategy. For service organizations that mainly support break/fix, reactive service engagements, the entire organization may not be needed and thus a siloed structure won’t cause havoc. But as service models evolve to being more proactive and predictive, other teams are needed to successfully deliver service. For example, IT is needed to design equipment to capture performance data, HR is needed to hire service workers with soft skills, and sales is needed to position contracts that charge for predictive support. As recent TSC data shows one of the top reasons why innovative projects like IoT connectivity don’t get off the ground is the inability to gain internal buy-in across departments (as stated by 41% of respondents) – silos of thought, strategy, and action. Service is a team game and the entire organization needs to be involved and bought-in to achieve service excellence and wow customers. If walls remain between functions of the business, the ability to deliver innovations in service will remain stunted.

Our Three Other Articles
1- Customer service still makes the difference at Mequon Ace (OnMilwaukee, 3/14/17)
2- VW Korea promotes higher customer service through ‘We Care’ campaign (The Korea Herald, 3/16/17)
3- In a tiny town, a phone company right out of a Rockwell painting (The Boston Globe, 3/11/17)

If interested in viewing our latest data and insight, please visit: http://info.servicecouncil.com/recent-content-and-events

We would love to have you become part of our research panel. If you would like to, please visit http://info.servicecouncil.com/tsc-join-a-research-group and select the area(s) of alignment. (* Participation in research groups is reserved for practitioners only. Consultants and technology solution providers are not allowed to join and will be referred to other ways of getting involved.)

Till next week.

Aly Pinder
Director of Member Research & Communities
ap@servicecouncil.com or @pinderjr

Sumair Dutta
Chief Customer Officer
sd@servicecouncil.com or @suma1r

Service Leaders Look to Plan Beyond Powerball

By Sumair Dutta | Uncategorized | No Comments

What would I do if I won $1.3b (or $900m or whatever amount after tax)? It’s a question that nearly everyone here in the United States is asking. Well, people outside are asking as well as evidenced by my parents, but not as much.

It’s interesting that I’ve asked a similar question in recent interviews with service leaders as part of The Service Council’s InService podcast series (Look out for new episodes featuring Ooyala and Heidelberg). The question is slightly different but essentially focuses on what service leaders would do if given a significant amount in financial resources. The answers vary but it mostly comes down to getting more resources. For some this comes in the form of people; for others its in the form of technology; and for a large number its in the form of customer insight. Yes, customer insight is a resource.

The fact is that service organizations are facing a major transformation. This is true for those that directly deal with consumers or those that deal with other enterprises. In B2B service businesses, the talk of transformation has all been around the increasing importance of service as a differentiator in the face of slowing product demand and increasing competition. In 2014 The Service Council (TSC) research, three out of four organizations indicated that the importance of service to an organization’s financial well-being had increased over the previous 12 months.

This transformation is different. Service buyers are changing. For one, the level of office held by the buyer is rising. As we at TSC conduct our annual 2016 Trends in Service survey, we find that 50% of organizations claim that they now face a higher-level buyer. Procurement or Purchasing still account for the largest share when it comes to buyers of service, but we a greater level of C-level financial or IT oversight in the purchase of services. And these senior-level buyers are demanding more value. As per the first 50 organizations participating in our survey, these were some of the areas/features that were most in demand:

  • Pricing – Lower cost service contracts
  • Field Service – Shorter response times and smaller windows
  • Terms – Consolidated terms and pricing for multiple facilities
  • Service Contracts – Performance-based
  • Services – Training
  • Portals – Self-service information and knowledge

All of these demands are being made in an environment when the cost of delivering service continues to go up.

This is why we see service organizations continue to focus on delivering value via solutions. These include information portals, training services, inventory management services, consumable monitoring and replenishment services, multi-vendor services, and more. At the crux of the issue is developing a clear understanding of customer pain points. With the aid of VOC programs, condition monitoring (and other IoT-related) systems, point-of-service tracking, and customer issue management systems, we now have all of the data we need. The desired result is to use this data to segment service customers and offer customized solutions to target unmet needs.

As mentioned, we’re still collecting data on 2016 trends. If you run a service business, please feel free to participate in our survey. We will be sharing results on a webcast taking place on January 21 at 11:30am Eastern. Joining me on the webcast will be representatives of the Technical Services team at Cisco Systems. Our chat will touch upon 2016 trends, service organization pressures, and the impact of a changing service buyer. (Register, if interested)

Stay tuned for more data on 2016 trends. Good luck with Powerball.

3D Printers in Service Vans: Lets Pump the Brakes

By Sumair Dutta | Perspective, Uncategorized | No Comments

Every day there seems to be a new article describing advances made in 3D printing. I just read one on how 3D printers were being used for whiskey glasses on the International Space Station. There is no doubt in my mind that 3D printing will disrupt and revolutionize supply chains. Some of that disruption is already occurring and early adopters are making some progress. Yet, most organizations are in a wait and see mode.

In late 2013, we lobbed a question to our community regarding the impact of 3D printing on service parts businesses. At that time, 71% of responding organizations (n=100) said no. Twenty-three percent (23%) said they didn’t know yet, and only 6% said yes. In 2014, we posted a similar question to a slightly larger group (n=175) regarding 3D printing and its broader applicability to the service business. In this case, 3% of companies were currently using 3D printers, 7% were building the business case for use in the short-term, and 24% were evaluating for use in the near future (24-48 months). Of the remaining 66%, most downplayed the role of 3D printing.

3D Printing in Service

What it seems to be is that those folks who were on the fence, continue to evaluate the technology more, and some have actually put pilots and projects in place. E.g. On a recent webcast with Lexmark International around service supply chain management, Brad Lawless, their Director of Global Service Parts Operations states, “3D printing is a critical part of my tool box today and one of the reasons that we have extremely high fill rates.” Brad uses the example of a 3D printing partner who provides a cost-effective 3-day turnaround for a high quality printed parted based on a model sent in by Lexmark. Yet, Lawless also states: “It will be years before you have Lexmark branded vans with 3D printers in them.”

So where do 3D printers fit in when it comes to service parts? Our recent 2015 parts research has found that inventory management of service parts continues to be a major area of focus for those involved in running service supply chains. The issue is in balancing the availability of parts for technician and customer use with the cost of inventory. If you run too lean, fill rates suffer. If you overstock, you have a lot of money tied in inventory. This gets even more complicated when you think of the variety of parts needed to support multiple products.

In the realm of inventory management, we also found that a large percentage of organizations were being burdened with a large inventory of obsolete parts or parts for products that are at end of life. Since most customers look to extend the life of their products to delay the eventual replacement discussion, they still need support in the form of parts and service. This creates a unique challenge for service organizations as they are planning to stock up and support their newer lines of product vs. products that are obsolete. More so, as suppliers move away from supporting older products, it becomes more and more difficult to order necessary products, thereby forcing organizations to essentially overstock.

Enter 3D printing. Service leaders we speak with see the entry point for 3D printers in the support of parts for obsolete or legacy products. If a part is needed, it can be created on-demand and delivered to the customer with a short turnaround, thereby reducing the inventory burden on the service provider. While the cost per part might be higher, it is offset by the decrease in inventory held by the organization.

Before that happens, organizations (and service leaders) have concerns around:
– Velocity of output
– Quality of output
– Validation that the part is up to standards
– Regulations around the use of 3D printed parts especially in regulated industries

These challenges can and will eventually be put to bed as advances are made to the technology and there is a greater demand from mainstream manufacturing to adopt 3D printing. It’s only a matter of time. Yet, for most in the service realm, these are still early days. A quote from one of my conversations, “The engineers love 3D printing. But the excitement fades when you talk to the operations manager.”

If interested in listening in to our conversation with Lexmark International and Durst Image Technology USA, visit our Re-Imagining the Service Supply Chain webcast page.

We’ll be discussing 3D printing on an upcoming parts IdeaShare entitled Innovation in Parts Management. Space is limited, but feel free to register and we’ll see if we can get you in.

Otherwise, feel free to send in your comments on 3D printing and we would love to showcase some of the ideas around the increased use of this technology for better service performance.

Getting More with Self-Service

By Sumair Dutta | Uncategorized | No Comments

Organizations, that support consumers and enterprises alike, are looking to enhance the self-service opportunities available to their customers. A 2014 The Service Council research effort found that 6 out of 10 organizations were looking to provide increased self-service resources to their customers.

One might think that’s all great when it comes to simple fixes around the house, but what about the service tied to complex machinery? In these instances, do organizations really want their customers to be tinkering with equipment? Not necessarily, but organizations do want to develop a better understanding of the breadth of service needs. This is done in order to expose service issues that can be solved directly by customers at their own convenience. Increased intelligence on service occurrences is being assembled with the aid of new technology. The Internet of Things (IoT) is empowering service organizations to dig deeper into service incidents. As a result, organizations can appropriately diagnose a service situation, determine corrective or preventive action, and execute on service delivery. Depending on the action necessary, service execution can take place at the hands of the customer with no organization involvement, at the hands of the customer with some organization assistance, or at the hands of the organization with no customer involvement.

The traditional driver for self-service investments was cost elimination and the reduction of the burden on the service organization. Now, there is the realization that customers often resort to self-service channels as a first attempt and therefore it makes sense to provide information and resolution paths on channels and mediums preferred by the customers. In essence, this serves to improve customer satisfaction and also reduce the burden on the service organization.

Does this mean that we should just dump all of our service procedures, support manuals, and more online and let clients fend for themselves? After all, it is in support of greater self-service. That would not be appropriate as it fails to account for the entire experience delivered to the customer. While the customer might eventually track the necessary information, the time and effort expended might negate the overall convenience of the self-service interaction.

Excellence in self-service requires a focus on effectiveness and experience. Effectiveness is related to the actual resolution of a customer query. A customer needs to have the confidence that when they seek support, there will be a path to resolution. If there is no resolution, trust is broken and that particular path of service inquiry will never be attempted again. Experience is tied to the way in which resolution is achieved. Factors such as customer effort, ease of information access, service journey flow, and more become extremely important here. Was the resolution achieved in such a manner that was easy for the customer and will lead to a repeat use of that particular mode of service delivery? While effectiveness is the basic requirement of the service transaction, experience drives commitment and loyalty.

To deliver an ideal experience, it is essential that organizations understand the customer journey and the context in which service is being sought. Simply taking a service procedure as conducted by a knowledgeable service agent and pushing it in the hands of the customer is ineffective and leads to frustration and self-service channel abandonment. Which then brings us back to a live service interaction, only this time with an unhappy customer.

I’ve laid out several ideas and best practices around self-service in a thought leadership paper (conveniently titled Getting More with Self-service) that can be accessed here or here. These ideas were assembled from numerous interviews with organizations that make up The Service Council community.

What’s more, I’ll be sharing some key findings and takeaways from the paper on an upcoming webinar on Feb 24 at 2pm Eastern featuring myself, Parature, from Microsoft’s Bill Patterson, and Peter Friedenberg of nTelos Wireless. Please join us (Registration required) and send over your thoughts and comments.

Activate Your Service Connect™ Membership Learn More