The Net Best Thing: In the Field and All Grown Up

Field service management has been the redheaded stepchild of customer relationship management. But the next generation of solutions for the service and support chain may mean a move to the head of the class.

June 1, 2002

[From iSource Business, June/July 2002] It's a scene that is as old as photocopy machines: Something breaks. The call goes out to the manufacturer's field service organization, which schedules a service call. The next day, a service rep shows up, only to realize that he has the wrong manual. The following day, on the second visit, phonebook-size manual by his side, the rep identifies the broken part, but he needs to go back to the shop to order a replacement. One more day and one more visit later, the machine is whole again, the factory is humming and the service rep is borrowing your phone to call in for his next assignment. Down time: four days.

Now imagine this: Something breaks. The call goes out to the manufacturer's field service organization, which pages a service rep to respond immediately to ensure compliance with the company's service-level agreement. Later that day, a service rep shows up, pulls out a wireless, Internet-enabled personal digital assistant (PDA) and logs onto a Web site that provides access to a manual for the broken machine. The rep identifies the broken part and is able to trade it out for a replacement that he has conveniently brought with him because an analysis of data from previous service calls on this type of machine indicated this part was a likely failure point. The rep uses his PDA to mark the job complete, log time and expenses associated with the repair, order a new spare for the part and download his next assignment. Down time: a few hours.

Fantasyland? Not in the least. In fact, all the technologies necessary to make the latter scenario a reality already exist, and a few early adopters are testing the waters with these new solutions. The next-generation service and support chain is almost ready for prime time.

The Redheaded Stepchild

The service and support chain, really an extension of customer-relationship management (CRM) activities, encompasses all the activities that occur after a product is delivered to the customer. That includes everything from preparing, distributing and updating technical information for maintenance personnel (see the sidebar, Let's Get Technical, at the end of this article) to managing warranty programs, field service personnel, and inventories of spare and replacement parts.

This link in the supply chain has been something of a redheaded stepchild to CRM in recent years, despite the fact that companies have been providing solutions for service and support literally for decades. Revenue opportunities in field service may not appear to be as business savvy as, say, sales force automation or Web self service, says Karen Smith, a research director for CRM at Boston-based technology consultancy Aberdeen Group. In a recent survey of solutions for field service management, Aberdeen notes that this segment of CRM has been growing at 8 percent annually, a rate that Aberdeen called respectable, yet comparatively disappointing.

Smith and others cite a host of reasons for the slow development of solutions for the service and support chain. Companies typically have viewed their service organizations as cost centers, with little potential for profit, so executives have seen little need to invest in this function. Demographics could also play a role: Field service staff are frequently older workers, often unionized, and might offer more resistance to introducing efficiency-raising technologies that could threaten jobs. In addition, because field service is, by definition, done in the field, greater automation of service activities has been, to some extent, hostage to the slow development of more extensive, more reliable high-speed wireless Internet networks and to the high price tags on PDAs and other devices with which to equip service personnel.

Increasing Interest

Those factors notwithstanding, executives increasingly have begun to focus on service and support in the past 12 to 18 months, and Smith sees interest in these applications gaining momentum in 2002. No doubt this heightened attention has resulted in part from the greater number of software providers rolling out solutions to address one niche or another in the service and support chain. Companies also are looking to achieve in the service and support chain the kinds of hard-won efficiencies they have attained in manufacturing, procurement and other business functions.

Solution provider Xora, for example, offers solutions designed to give mobile employees access to data in enterprise applications through wireless devices, voice recognition and the Web. Field service personnel at Home Finishes Inc., a company that provides home warranty service, use the solution, accessed through a Web-enabled cellular phone, to file time and expense reports onsite as they complete jobs. The information goes directly into Home Finishes' back-end systems, which can update customer information and create invoices automatically, cutting out the time and errors inherent in manual report processing and reducing the invoice cycle by up to two weeks. A Xora implementation runs from $125,000 or $150,000, although the provider recently announced a scaled-down version, beginning at $60,000, for mid-market companies.

Another provider, Xelus formerly LPA, a company founded in 1972 offers a solution, its Enterprise Service Management suite, for forecasting and managing service parts inventory. The goal of the solution, according Xelus Vice President Stan Beal, is to get the right parts in the right location at the right time. Dallas-based Aviall, the world's largest independent distributor of new aviation parts, has implemented the Xelus solution to streamline its parts inventory management, according to Joe Lacik, vice president of information services at Aviall. By more efficient inventory management, we certainly hope to reduce the amount of inventory we need to keep on hand and yet still satisfy our customers' needs, says Lacik, adding that Aviall was considering specific targets for inventory reduction but was not ready to publicize those goals. Lacik credits the inventory tracking and planning capabilities provided by the Xelus solution as being a key factor in a recent customer win for Aviall, a 10-year, $3 billion deal with Rolls-Royce to provide worldwide aftermarket parts support for the British manufacturer's T56 model aircraft engines.

(For an in-depth look at how one company, Subaru of New England, is using a parts inventory management solution from provider Servigistics to reduce its inventory levels, see At Your Service, the Links column in the April/May 2002 issue of iSource Business.)

The Measure of Success

Beyond efficiency gains, companies also are looking to beef up their service functions as a way to strengthen customer relationships in an increasingly competitive market. Case in point: ADC Telecommunications, a $2.4 billion, Eden Prairie, Minn.-based company in the highly competitive market for broadband communications equipment and services. ADC is using Agile Software's Product Collaboration solution to give its field service personnel access to bill of materials-based technical information and schematics on the company's products, allowing service reps to respond more quickly to customer field complaints according to Gary Lenik, director of materials for ADC.

Lenik says his company has not tried to calculate a hard ROI figure on its use of the Agile Product Collaboration solution, looking more to increased customer satisfaction as the key indicator of success. You could say that you are using less infrastructure to get the work done, and you could put a number on that, Lenik explains. But how do you put a number on being able to respond to the customer five times faster? You can never really measure it.

None of these gains will come without some difficulty, of course. Aberdeen Group's Smith points to several challenges in implementing service and support chain technologies. First, companies must be willing to invest in the necessary hardware to take advantage of the wireless applications coming onto the market, although the proprietary systems used by companies such as UPS and Federal Express are giving way to low-cost, Web-enabled telephones and PDAs with built-in modems, making these solutions available to a wider range of organizations.

More problematic will be the need to re-engineer service and support processes within the enterprise to take advantage of the new technologies. The traditional model for how field service organizations deploy their resources has involved lining up all the jobs for the day, scheduling them in a batch mode, then dispatching all the technicians at the beginning of the day with their lists of job items. Regardless of how well companies had optimized that process, it will be sub-optimal to being able to interact in real time with a technician in the field to schedule jobs on the fly as the day progresses, based on incoming customer requests. As with any implementation that requires such a radical cultural shift, enterprises reforming their service and support functions will want to undertake a significant education effort to build confidence in the new technologies from the grassroots up to the executive level.

Smith suspects that increasing numbers of companies will be willing to undertake such efforts as they come to understand the costs of not improving their service and support functions. As a company's market share and revenue begin to slip because of a lack of field service effectiveness and resources, the value of successfully deployed and adopted field service management solutions starts to take on greater meaning.

SIDEBAR: Let's Get Technical

Service and support provide fertile ground for new efficiencies, like technical manuals, for example.

Burlington, Mass.-based solution provider Enigma had a client that used desktop publishing software to prepare paper manuals for large equipment. The head of the project at the client, which agreed to be interviewed but declined to be named, described the process as a real nightmare due to the size of the manuals, their complexity and the difficulty in revising the texts over time. Not to mention the four to six weeks it took to shepherd each of 150-plus manuals through the printing process and the $2,000 to $3,000 it cost to distribute 300 to 400 copies of the manual to users at some 75 sites around the world.

A few years ago, the client began using a technology called DynaText, developed by Electronic Book Technologies and later acquired by Enigma, to produce the books on CD-ROMs, reducing distribution costs and eliminating the printing process.

Beyond the efficiency gains, users found the electronic versions of the manuals easier to navigate. After a positive reception to the CD-ROMs, the client moved to put the manuals online, too.

Enigma's solution allows the client's staff to post technical documentation on a Web site, giving maintenance staff immediate access to up-to-date information even before they receive the manual on CD-ROM.

Although Enigma's customer hasn't formally tracked the solution's ROI, a client representative said the software appears to be paying for itself just in terms of high user satisfaction and reduced cycle times.

SIDEBAR: Plethora of Providers

In its November 2001 report entitled, "Service on Site: The Opportunities for Field Service Management," Aberdeen Group offers a comprehensive look at the development of solutions for the service and support chain, as well as profiles of 28 key solution providers in this field.

The list of providers includes such e-business stalwarts as Baan, i2 Technologies, Microsoft Great Plains, Oracle, PeopleSoft, SAP and Siebel, which offer service and support capabilities either as separate solutions or as functionality built into a broader suite of applications. Agile Software is a recent entrant into this market, too, with its Product Service & Improvement solution.

Smaller players in this niche include:

Antenna Software

Founded: 1998

Woburn, Mass.

www.antennasoftware.com

Astea

Founded: 1979

Horsham, Penn.

www.astea.com

Clarify *

Founded: 1990

San Jose, Calif.