Thank you for Subscribing to CIO Applications Weekly Brief
Revolutionizing Field Service to Be the Product
By Manas Pattanaik, Industrial Products, Connected Field Service Leader, PwC and Gibu Philip, Cross Industry, Connected Field Service Manager, PwC and Harvey Han, Oil and Gas, Connected Field Service Specialist, PwC
Manas Pattanaik, Industrial Products, Connected Field Service Leader, PwC
Revisiting field service
While providing quality Field Service for a customer’s operational asset has always been a priority for manufacturers and service providers, the service model is transitioning to a new paradigm where the service portfolio is packaged as a product. There are several drivers for this change which include the following:
• Expectation for service excellence is higher while complexity and range of services provided are on the rise
• There is a growing customer trend shifting away from product ownership and moving towards consumption of a service to meet field operational needs
• Advancement in technologies such as intelligent sensing and internet of things make it possible to connect operational events and data faster allowing dynamic adjustments to the services rendered
This allows service providers to bundle their field services as a product to manage them better end-to-end as opposed to treating them as a collection of offerings. We call this new service model a service product.
To implement a service product model, use of the right digital technologies is key
Implementing the change
Providing field services through a service product and realizing the benefits from it requires a change from the traditional service model. The service product approach differentiates in the following ways:
• Common base of the service product
A thorough understanding of service elements within the product and how they correlate to each other. This is important to generate greater overall service quality. In field service, key service elements can be technician scheduling, technician dispatch, technician enablement, alignment with the installed base, and work order management at the field. As an example, scheduling and dispatching of a technician should be integrated with enabling the right technician.
• Encapsulation of service elements
Traditionally, the intangible nature of services has provided a formidable sales and marketing challenge for the service provider—how do you differentiate yourself quickly and easily? On the other hand, for a customer, evaluating a service vendor has presented a buying risk—they never really know what they are buying until after the service is delivered. A service product allows encapsulation of service elements within it thus providing a composite product signature that leads to a more defined understanding of services upfront.
• Integration with customer’s ecosystem
A service product offering makes it easier to integrate with a customer’s ecosystem. For field services, this is particularly important as there are many variables while providing services to an operational asset in the field. Moreover, the specific needs and priorities of the customer can vary by industry. For some customers, priority could be reducing its asset downtime while others could lay more importance to cost of service or compliance in their operating environment.
• Association between different service products
Many times, not one but multiple service products are required to address the needs of a customer. An example of this is a well workover in the oil and gas industry where multiple service groups are brought together. Another example is building a complex facility like a refinery or an offshore platform.
In such cases, an orchestration within each service product as well as across all service products in action is important.
In summary, a service product model minimizes the risk of unknowns by making the intangible tangible. It also provides a stronger engagement model between the customer and service provider while providing benefits to both parties.
Benefits to both parties
From the eyes of the customer
As customers stress the value of service they derive from a product rather than the product itself, a service product model enables this new focus and measurement. A service product allows a customer to concretely define the operational value of a product that belongs to the company. Having this capability is important for the customer to understand and measure the true cost-benefit of the product during its lifecycle and where it delivers value to a business.
From the eyes of the field service provider
There are three ways how a service provider can benefit from a service product model. First, by bundling the services and managing their interrelationship inside the service product as pointed out in the earlier section, the company can provide better services to the end user or customer. Second, with this model, the service provider can create multiple flavors or custom solutions of its base product thus creating profitable monetizing options that are more attractive to its customers. Finally, a service product model will allow the service provider to develop new sources of revenue by packaging and crystallizing services (e.g. after-market or after-sell services) that would have otherwise not been distinct enough to sell.
In summary, as field service equipment manufacturers and service providers strive for a higher level of service excellence, customer satisfaction, and even customer partnership, a service product model provides them with a great amount of flexibility and the ability to differentiate. Simultaneously the customer has a better understanding of the operational value of a service associated with a product and can effectively apply it to a field asset in the right context, thus benefiting from increased asset uptime and reduced cost of operations.
Enabling through digital technologies
To implement a service product model, use of the right digital technologies is key in the following ways:
• Companies are examining gig or piece-rate operating models to enable an agile workforce that can shrink and expand to meet market demand. These models bring a potential tradeoff in quality of work due to training or experience gaps. A whole new set of mobile and cloud capabilities, knowledge management, and a network of digitally enabled technicians connected to their ecosystem through IOT platforms help mitigate risks with forward-thinking operating models.
• Many companies change how they manage the equipment in the field. They monitor equipment condition, predict failures with sophisticated algorithms, and proactively service equipment before an issue occurs. This takes an orchestration of customer needs, field and back-office data, analytics, technicians, schedules, tools, and inventory. Without this holistic approach, small deficiencies turn into missed Service Level Agreement’s, unhappy customers, and increased service expense
• Software platforms are purpose-built to provide integrated field service management thus enabling the core concept of service product as outlined in this article. Many of these software platforms are available from market established companies today. There is a Gartner report available to qualify the vendor companies that are active in the field service management space.
So what does this mean to a savvy CIO? As field service management solution moves from traditional service offering portfolio to a service product model, the CIOs in the customer companies are recommended to understand the implication of this, both in terms of vendor software platforms and selective use of the right digital technologies. Moreover, a good field service management solution operates in an integrated fabric that contains supply chain, materials management, asset performance management, and enterprise asset management capabilities in the company. The CIO should consider where value is created in the larger space and the implications of it. Finally, field service product as the new avatar needs to align with the understanding, motivation, and performance of the workforce. The CIO can play a leading role in executing the transition.