PLEASANTON, CA--(Marketwired - June 13, 2016) - While a majority of companies are looking to improve customer satisfaction levels to drive business growth and most believe field service management can contribute, actual field-level investment remains meager, according to a new ServiceMax study released today. The report reveals a lack of board investment toward the hidden potential of field service departments to drive profitability, reduce warranty leakages, address parts supply chain challenges, and drive customer satisfaction and retention. This gap shown in the study and under-investment in field service technologies can present a number of challenges to organizations.
Despite 73 percent of the 200 IT and field service decision makers surveyed saying both profitability and customer satisfaction are positively impacted by field service management, 48 percent noting that field service management improvements would increase customer satisfaction, and nearly 86 percent admitting field service is valued by the board, a mere 3 percent cite field service management as a top three priority area of investment.
On top of this, nearly one-third (30 percent) of respondents say they risk losing customers if they do not place enough value on field services, and nearly half (46 percent) feel they risk falling behind competitors. Despite all this, 86 percent surveyed said they expect field service to become a primary revenue driver in the next two years.
Five Key Research Findings:
- Boards failing to realise potential of service departments -- and under-investing as a result.
- Field service will get a second tech makeover and is set for nascent boom.
- 86 percent of companies say field service will become a primary revenue driver in 2018.
- 30 percent say IoT connected machines can't replace human instinct in field service.
- Warranty leakages and parts supply continue to drain efficiency.
"While businesses cite customer satisfaction as strategic, equipping their customer field service technicians with 21st century tools and investing in field service management are not yet strategic priorities -- but they should be," said Callum Budd, Project Manager at Vanson Bourne, which conducted the survey for ServiceMax. "Although service leaders and IT management understand the ability of field service management tools to positively impact profitability, supply chain, upselling, cross selling and warranty leakages, senior executives and board level management have yet to make the link. It's a classic case of having your cake and not eating it by failing to capitalise on the un-activated potential of your field service organisation."
The report also predicts an imminent boom for the field service industry with 86 percent of companies saying field service will become their primary revenue driver in an average of two years. Half of companies plan to incorporate wearable technology into their field service management capabilities, 51 percent plan to use augmented reality, and 49 percent plan to use connected devices.
"Field service only relatively recently joined the information economy with its own dedicated software platform and cloud-based field service management tools," said Dave Hart, Senior Vice President of Customer Success. "And while IoT, augmented reality, drones, wearable technology and mobility all continue to effect change in organisations, field service is dramatically reaping the benefits with customers seeing their service revenues in some cases double due to incorporating this next-gen technology. Yet as the data demonstrates, clearly many companies have yet to fully capitalize on this opportunity."
Despite the huge potential for sensors and IoT connected machines in self diagnosing themselves, the report found that 88 percent of companies say there are challenges to connected devices, and 30 percent don't believe sensors can replace human insights and instinct.
"Rather than being replaced by machines, we see customer field service technicians as harnessing IoT insights to assist them in making their own conclusions in the field," added Hart. "Service techs are the face of their organisation to the customer and are seen as trusted advisors. Customers want relationships with human beings, rather than machinery. Connected customer field service should complement -- not replace -- service technicians."
Lost revenue from warranty leakage (not knowing if service repairs are covered under a customer's contract) and parts supply chain inefficiencies were also highlighted as ongoing issues. Only 10 percent of organisations say they perform extremely well at managing leakages and less than one in five (15 percent) say reducing leakages is a top-three priority investment area. Likewise, 90 percent report challenges regarding their parts supply chain, and 22 percent say it is not part of their business strategy. Again, advances in field service management technology directly address both of these issues, increasing visibility into customer contracts and warranties, reducing revenue leakage and increasing top-level parts profitability.
To download a copy of the executive summary and/or the full report findings, please click here.
ServiceMax leads the massive global industry of field service management software -- an $18 billion market worldwide. The company continues to reimagine and create solutions for the 20 million people globally who install, maintain, and repair machines across dozens of industries as the only provider of complete end-to end mobile and cloud-based technology for the sector. ServiceMax goes to every length -- from joining technicians on service calls to publishing the industry's leading online publication -- to help customers discover untapped innovation, unleash new revenue streams, drive efficiency, and most importantly delight their end-customer. To learn more, please visit www.servicemax.com.
About Vanson Bourne
Vanson Bourne is an independent specialist in market research for the technology sector. Our reputation for robust and credible research-based analysis is founded upon rigorous research principles and our ability to seek the opinions of senior decision makers across technical and business functions, in all business sectors and all major markets. For more information, visit www.vansonbourne.com.
About the report
During April 2016, research firm Vanson Bourne interviewed 100 IT decision makers and 100 field service decision makers from the US, UK, Germany and France. To qualify for the research, respondents' organisations could be from any size and sector, but the organisation had to have at least one field service engineer. The IT decision makers and field service decision makers were interviewed using an online methodology and a robust multi-level screening process was used to ensure only appropriate respondents participated in the project.
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