Running the Numbers: The Big Picture for Field Service

[From Supply & Demand Chain Executive, August/September 2004] Customer demand for more effective field service is driving a cross-section of companies to put more strategic focus on this aspect of their supply chain, but insufficient performance metrics are hampering corporate efforts to improve field service, according to the results of a new study from technology consultancy Aberdeen Group.

In June 2004, Aberdeen Group and Supply & Demand Chain Executive magazine conducted an online survey that was designed to identify emerging best practices for field service management and provide a framework by which readers could assess their own field service capabilities.

More than 260 enterprises in high-tech, discrete and process manufacturing, utilities, and other industries responded to questions to determine the degree to which field service management impacts corporate strategies, operations and financial results; the structure and effectiveness of existing field service procedures; current and planned use of automation to aid these activities; and the benefits, if any, that have been derived from optimized field service management.

According Mark Vigoroso, vice president of post sales service research at Aberdeen and author of the report, the study shows that a sea change is underway in the field service arena, with companies transforming this function from a tactical cost center to a strategic profit center.

Firms that maintain a holistic view of field service, considering all the core components, are squeezing latency and costs out of their field service operations, Vigoroso said. These forward-thinking enterprises are staking revenue, profitability and client satisfaction goals on their field service operations and are leveraging technology solutions to reach these objectives.

First, the study showed that companies are putting a more strategic focus on field service, with more than three-quarters of firms indicating they currently run or plan to run field service as a strategic operation with revenue and profit goals in place. Seventy-two percent of respondents said the driving factor behind this concentration is demand from customers. This was followed by 56 percent who said shrinking profit margins and 52 percent who indicated that competitive pressures were the cause of the increased push for field service management within their organization.

Second, since customer demand for more effective field service ranked so high, it is not surprising that 71 percent of firms cited increasing worker productivity as their primary strategy for optimizing those operations. Fifty-nine percent specifically noted connecting field personnel to the back office as a means to this end.

Finally, Aberdeen noted that 48 percent of companies said they are hampered by insufficient metrics to gauge and improve field service performance. An additional 48 percent also said that disjointed processes across customer relationship management (CRM) and service inventory management were challenges to field service delivery.
Aberdeen said one problem could be that companies measure their performance based on compliance with service level agreements (SLAs), and while this is an important benchmark, it fails to give an overall view of customer experience. Therefore, 55 percent of respondents to the study chose defining and tracking performance metrics that are tied directly to overall customer experience as the response by which they would optimize field service delivery.

Aberdeen concluded that the survey results point to a growing gap between best-in-class field service organizations and average companies. Those companies considered best-in-class capitalize on the ability for excellent field service operations to drive margin, top-line revenue and customer retention for their organizations. For example, they monitor, diagnose and predict customer service requirements proactively, instead of waiting for problems to occur and then responding. They also support real-time collaboration among such stakeholders and the call center, control desk, parts depot and field technician, and they provide them with access to the same real-time data. Finally, best-in-class firms automate and synchronize the field service components of people, process, parts and data.

In order to start an organization on the track to becoming a best-in-class firm, Aberdeen suggests that companies evaluate their processes to ensure that they can effectively understand and document criteria for customer delight, and then reverse engineer their field service organization to meet or exceed those criteria. Next, they should measure field service performance based on overall customer experience. Then, companies should foster a corporate culture and business processes that are oriented around client satisfaction. Aberdeen recommends increasing collaboration among internal stakeholders, and eliminating paper- and spreadsheet-based processes, opting instead for Web, e-mail and mobile technology solutions.

To read the Field Service Optimization Benchmark Report in its entirety, go to www.Aberdeen.com.

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