During Maximize 2021, the Global Customer Transformation (GCT) team offered a set of 12 roundtables spanning a range of topics, from COVID-19 implications to asset-centric business models and commercial maturity. These topics fuelled a wide range of conversations and I will detail a few of those here.
From Short Trial to Longer-Term Innovation: Lessons & Practices from COVID-19 That Will Persist
A little over a year ago we learned about COVID-19. Denial, anger, bargaining, depression, and acceptance. We’ve been through it all. COVID-19 drove a number of changes in the way service was delivered and consumed. Organizations quickly deployed new solutions and digital technologies to enable their workers to continue to deliver service to their customers.
In this roundtable, the participants shared their thoughts on what changes were merely short-term adjustments or disruptions to the normal and which ones were longer-term innovations here to stay.
To no surprise, employee safety, compliance, and remote service are high on the list of the more permanent changes. These reflected underlying business issues that existed all along, only to be amplified by COVID-19.
What COVID-19 has also shown us is that disruption has many forms. So, it’s best for organizations to prepare to be agile and resilient. As a final thought: How is your organization going to handle the backlog of deferred work orders? How are you going to prioritize these while meeting your contractual obligations?
Recommended Maximize sessions (On-Demand here):
- Keynote: Making Your Service Business Resilient with ServiceMax
- Business Transformation: Listen to Your Assets: The Benefits of Using Asset Data for Business Outcomes
Recommended readings:
- Transforming Field Service When the “Field” Has Changed
- The Year Ahead for Energy: 3 Paths to Success Post-Covid-19
- 8 Considerations for Your Remote Support Program
- How Will AR & VR Impact the Future of Field Service Management?
The Technician Profile: Changing Role, Changing Skillsets – Where Do We Find Them?
Assets are changing. Service work is changing. The nature of customer relationships is changing. Has the technician skillset changed to match the evolution of service taking place?
We ask a lot of our technicians. We ask them to be our brand ambassadors. They want to be a hero on site. Maybe the best gift we can give technicians is empowerment. To give them tools allowing them to engage with the right information at their fingertips. It is vital to establish the right balance between autonomy for the technician and control for the manager.
Is that possible? Sure. The discussion showed plenty of examples of how the combination of state-of-the-art service execution tools and empowerment drive adoption and thus the projected business results. Once people see transformation in action, the mindset will follow leading to an intrinsic motivation.
Recommended Maximize sessions (On-Demand here):
- Keynote: Building Resilient Relationships. Being a Technician during the Pandemic
- Tips, Tricks & Training: Save my Bacon – Remote Assistant in the Field
Recommended readings:
- 2021 Predictions for Chief Service Officers
- Technician Advice to CSOs: 3 Interesting Takeaways from Our Inaugural Tech Talk Event
Enhancing the Commercial Maturity of Your Services Business
Why is commercial maturity in service so important? Because margin contribution stemming from operational excellence is not enough due to margin erosion and commoditisation. In parallel, there is a constant drive for growth.
In this session, we asked the participants to self-assess their current commercial maturity using a poll. A low maturity was defined as one where a predominantly product focused organization sold services as an afterthought. On the other end of the scale, we positioned companies where both sales and service revenue generating activities are managed in unison over the life cycle of the product/equipment/asset.
To make the maturity assessment tangible and actionable we gave the participants a simple calculation exercise. Suppose you have installed base visibility of 100% and an attach rate of 100% with ‘gold’ contracts. Meaning all installed products have an associated all-inclusive service tier. How much revenue would that amount to? Do we have your attention, or more importantly would that raise the attention of business leaders?
Now compare this figure with your current services revenue. The goal of this exercise is to define the ‘gap’ and to use the gap as an instrument to drive your commercial maturity journey.
Of course, we know that not all asset owners will buy a gold tier contract. More likely, there will be a mix of warranty, part sales, installations, break-fix, field change requests, inspections/calibrations, preventive maintenance, and availability services. Each of these services has a different revenue and margin contribution. If you want to maximize your revenue, you’ll have to revisit your current services portfolio and evaluate how you present these offerings.
Recommended Maximize sessions (On-demand here):
- Asset 360: How to Unlock New Revenue Streams with Warranty and Contract management
- Business Transformation: How to Protect and Increase Your Service Revenue Stream with an Eye on Servitization
- Business Transformation: How to Revitalize Your Service Portfolio for CEX and Growth
Recommended readings:
- The Key to Sales and Service Working in Collaboration
- 5 Ways to Identify New Revenue Streams in Service
- Upsell Leakage: Everything You Need to Know
- How to Sell Customers on the Value of Preventive Maintenance
The Installed Base’s Role in Lifecycle Management
Peter Drucker said: “if you can’t measure it, you can’t manage it.” We could say the same thing about the installed base. If you don’t know where your product is, in what condition, and how it is being used, how can you excel in service? How can you serve asset owners over the lifecycle of the product?
A survey by Accenture stipulated that over the lifecycle of industrial assets approximately 8-12% of the cost is related to the purchase of the equipment. The rest is maintenance and operating cost. These numbers should convince any OEM to step up to the plate and offer lifecycle services.
What do you do when you sell a significant number of units via the indirect sales channel, via dealers and resellers? These are value chain actors that may shield their installed base data. The occurrence of an engineering change request may come to the rescue. As an OEM, this provides you with a legitimate reason to reach out to the asset owners, whether it is quality related or if the change enhances the capabilities of your product. So do software activations and updates, a growing feature of service products.
Recommended Maximize sessions (On-Demand here):
- Asset 360: How to Unlock New Revenue Streams with Warranty and Contract management
- Business Transformation: How to Revitalize Your Service Portfolio for CEX and Growth
Recommended readings:
- 3 Steps to Make Engineering Change Management Easier
- How to Maintain and Protect Your Brand as an OEM
- Looking for Design-for-Service? Start Here
- How to Sell Customers on the Value of Preventive Maintenance
These were just a few of the ‘live’ discussions that took place during our first ever virtual Maximize event. We hope for more in-person events next year, but till then we continue to appreciate the commitment and participation of our customers and prospects.
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