Drivers for Organizational Success – Field Service Benchmark Study Results

Service Strategies Corp. recently conducted a global research study on field service practices to benchmark industry-wide performance. Areas of focus include service offerings, field engineer utilization, performance metrics and the use of technology. The report highlights the results of the study and provides an indication of the levels of performance, priorities and the outlook for growth that service executives have for their business.

Here are a few highlights from the study related to service business prospects in 2019.

Economic Outlook

The economic climate is an important factor when considering growth in the next 12 months. The majority of survey respondents indicated a positive outlook for the coming year, with a full 80% being positive and only 4% indicating a declining business outlook

How do you see the Economic Outlook for your business changing over the next 12 months?

18% SIGNIFICANTLY IMPROVING

62% IMPROVING

16% NO CHANGE

4% DECLINING

This level of optimism is encouraging for the service industry and reinforces the belief that companies are recognizing that their service business plays a more significant role in client retention and long-term growth.

Service Revenue Outlook

A contributing factor of economic health is the Service Revenue growth predictions. Executives appear optimistic about improving market conditions. The majority of survey respondents have a positive service revenue outlook for the next 12 months. Approximately 72% indicate improving or significantly improving service revenues. Only 7% indicate an expected decline in service revenues over the coming year.

What changes do you estimate in your Maintenance and Support Revenues over the next 12 months?

16% SIGNIFICANTLY IMPROVING

56% IMPROVING

19% NO CHANGE

7% DECLINING

Investment Outlook

Due to the optimism about the economic climate and anticipate growth in revenues, service organization are in the position to invest in critical parts of their business. These investment areas are prioritized based on where the organization can improve the customer experience by upgrading staff skills, improving processes and leveraging new technologies to streamline service delivery.

What is your investment outlook for the following areas of your service business in the coming year?

71% STAFF TRAINING

68% SERVICE TECHNOLOGY

62% SERVICE QUALITY IMPROVEMENTS

60% STAFF LEVEL INCREASE

49% MANAGEMENT TRAINING

48% COMPENSATION LEVEL INCREASE

33% AUTHORIZATION TO TRAVEL

Keys to organizational success

In follow up to the investment decisions to fund improvements throughout the service organization, executives then prioritized the specific initiatives that would define their strategic objectives for 2019.

1. Optimize existing processes – Not surprising, this was ranked number 1 as it is an ongoing objective for most organizations. In fact, a review and update of all business and service delivery processes should be conducted on an annual basis because change is constant in the service environment and organizations need to adapt quickly to maintain efficiency and deliver a consistent customer experience.
2. Increase technical expertise of the staff – Upskilling staff through technical training programs on the product and related technologies was a high priority. Products are generally increasing in complexity and higher-level technical skills are required more so than in the past to effectively problem solve and service the product. Increased funding in the training budgets is required to cover internal and external classes.
3. Implement new field service technology initiatives – There are a number of newer technologies that can dramatically improve the efficiency of the service organization and help deliver greater value to customers. These include IoT (Internet of Things), Augmented reality, Mobile tools, Scheduling systems, Big Data etc. Most of these require significant capital investment and a thorough needs analysis before the vendor selection process is even started. The time to fully implement can be a year or more depending on the size of the organization and scale of the roll out.
4. Increase the skill of the service management team – Many managers, especially in the service industry have risen up through the ranks and due to tenure and good technical skills. They are then promoted into management without any formal leadership or management training. Fortunately, companies have come to realized that in order for these managers to succeed and deliver the expected performance from their teams, formal service specific management training is an absolute necessity.
5. Increase soft skills of the staff – Although technical skills were highly rated, it is just as important to fix the customer as it is to fix the problem. Therefore, how our service engineers communicate and build relationships with customers has risen in importance. The service engineer is the primary interface with the customer and have a significant influence on client retention and loyalty. Many companies are expanding their responsibilities to include account representative/ambassador type of role. In order for them to succeed in this role, more training is required to enhance their customer service, communication, negotiation and account management skills.
6. Implement knowledge management initiatives – Many of the service issues customer report are repeat issues. Without a functioning knowledgebase that can be accessed by all service staff, these same issues are solved and re-solved which is highly inefficient. 76% of respondence to this study indicated that they do have some form of knowledge base, however their process for capturing knowledge is limited and the search capability of the system was inadequate. More investment in knowledge management processes and the tool will be necessary to realize the full benefit of this critical support system.
7. Improve product quality to reduce demand – The reliability of product has a direct correlation on service demand. Poor quality products do have a higher cost to service as they generate more service issues. The Service department needs to work closely with Engineering to provide service reliability data, such as MTTF (Mean time to Failure) and MTTR (Mean Time to Repair) so that Engineering can quickly address these issues and constantly improve the quality of the product. Also related would be supportability features incorporated into the product to assist service in diagnosing problems and simplifying maintenance procedures.

Outsource more work to third party providers – In past years, the main reason for outsourcing was to reduce cost. This is no longer the case as service executive now want to deploy a more flexible resource model and outsourcing provides the required skill set to scale quickly for first level and provide coverage in territories where the company doesn’t have any presents.

This list of eight priorities to drive service improvements could apply to most service organizations. Some of these initiatives don’t require any capital investment, only effort, time and some degree of change management.

The Benchmark Study of Field Service Practices covers many topics and is an invaluable resource to compare the performance of your organization against the broader industry. For more information on the full report go to https://servicestrategies.com/research-report-field-service-benchmark-study/