ServicePower Field Service Optimization Software

Another Look at Optimization
By
Michael R. Blumberg

In a survey of 120 high-tech service organizations conducted approximately one year ago, we found that nearly all of the respondents surveyed indicated that service optimization is important to their organization. In fact, approximately three quarters believe that service optimization is extremely important. However, a majority of the constituency surveyed for this study focuses on only a limited number of optimization goals, such as maximizing service profitability, customer satisfaction, or service revenue.

These goals represent very general business objectives and focus primarily on external measures of performance. They also tend to be easy to measure through financial reports and customer satisfaction surveys. A smaller percentage of respondents surveyed indicated that they have more specific optimization goals for internal operating performance measures, such as field engineer utilization, inventory investment levels, logistics fill rates, or response time. In contrast, these internal performance parameters are more difficult to measure unless integrated systems are in place down to and including the field level. Our experience suggests that firms may not track these measures because they simply lack the systems, mechanisms, and/or knowledge to do so effectively and consistently.

We believe a service organization can only reach its optimization objectives through a commitment to both internal and external performance measures and the infrastructure and systems to support and control them. Achieving high levels of service productivity and efficiency is often part of most service optimization strategies. To that end, “best-in-class” performance, defined by exceeding a higher level of efficiency and productivity than “best general competitor,” represents the ultimate outcome of a service optimization program. This can be measured either by the firm itself or by independent comparison and evaluation.

It is interesting to note that only one-third of the respondents surveyed rate their service organization as “best in class.” This result corresponds very closely to the number of respondents that have optimization goals for both internal and external performance measures. The majority of respondents have found that process improvements along with education and training of staff on these improvements are the most effective mechanisms for achieving “best-in-class” status. Many respondents do not perceive the deployment of basic service management systems or advanced technology to be effective in achieving “best-in-class” performance. However, a significant number of respondents did validate that systems and technology, implemented in conjunction with process improvements and training, is indeed very effective in achieving their overall optimization goals.

These findings validate the view within the industry that technology has the greatest impact on organizational effectiveness if it is implemented in conjunction with strong management focus on the overall service business model (including revenue), process improvements, and training of people.

While a majority of respondents have implemented basic service management systems, almost half of the firms surveyed have not yet implemented advanced technology for optimization, such as diagnostics, optimized scheduling, and spare parts optimization software. Those firms who have implemented advanced optimization technology have found it to be very effective in maintaining high levels of service quality and effectiveness, reporting improvements in performance by as much as 20% or more. This is very consistent with prior observations by our firm. It also supports vendor claims with respect to the impact of their technology on performance. By and large, the survey results suggest that those companies who have implemented optimization technology demonstrate better performance in key areas than those who have not.

In general, we believe that a commitment to tracking a broad array of performance metrics, benchmarking performance against other firms in the industry, and continuously striving for improvement in performance are the keys to obtaining best-in-class status. Tying performance metrics into service level agreements enables a service organization to realize and empower the value of this status in the market and provides the incentive for making continued gains in productivity and efficiency.

In summary, we believe the results of our optimization research effort validate that optimization of field service processes is achievable and the payoff is quite significant. Despite the benefits of optimization, managers and executives responsible for field service can face many obstacles and challenges in achieving their optimization goals. These challenges can stem from a lack of buy-in, at all levels of the organization, and/or a lack of knowledge within the organization about how to achieve these goals.

Furthermore, a service executive can become very overwhelmed if he or she does not possess the knowledge to make change or have the desire, experience, or capabilities of being a change agent, in terms of both internal and external (i.e., market improvements and staffing). We strongly encourage service executives to seek the help of experienced staff or outside experts if this is the case.

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Michael R. Blumberg, MBA, CMC, an authority on marketing research/strategy formulation in the high-technology service market, is president of D.F. Blumberg & Associates, Inc, a Fort Washington, PA based management consulting firm that provides client services in strategic planning, market research, productivity improvement, and management systems design and implementation. You may reach him at michaelb@dfba.com or (215) 643-9060.