If you survived the database wars in the nineties and have been keeping your head down on the front line of the cloud wars in the noughties, stand by for the next outbreak of tech conflict — the field service wars.
In fact, according to ServiceMax CEO Dave Yarnold, the first shots have already been fired, which leads him to declare:
We’ve won round one of what will be the field service wars.
But Yarnold confidently expects a rapid escalation of hostilities as providers - including Oracle with its TOA buy last year - square up to the opportunity in the sector:
This is going to be a very large market. There’s been a prevailing business model that’s been based around putting a lot of effort into optimizing profits from sales and everything after that, the service, is about minimizing costs.
So you stick people in call centers out in the desert and you send the field service guys out with their clipboards. The only real technology applied is around taking out costs. Providers have said, ‘Give us a schedule for your technicians and we’ll squeeze out costs, get rid of some field guys’.
I feel that we’ve been on a mission - to kill the idea that it’s all about taking the costs out of field service. The core of our message is that we’re all about re-thinking field service.
The shift now is towards an outcomes-based business model, argues Yarnold, which involves longer-term thinking and defining outcomes and relationships:
You can see this in more and more industries as people ask how they can move to this outcomes-based model. The market has started to say that maybe the old field service optimization idea isn’t all there is. There’s a bunch of components that you need. You need to understand the people, the processes and the terms of the outcomes. And you’ve got to have a system that can accommodate that.
What's in a name?
With this in mind, and given that there is a prevalent cliche of field service being about the man in the van with the clipboard, is there an argument to be made that field service is not a helpful ‘brand’?
Just as so many CRM vendors found that term becoming the three letter version of a four letter word over time, does a company like ServiceMax need to coin a new terminology, perhaps outcomes-based service management? Yarnold is wary of this line of thinking:
You need to build your identity in your target market, no matter what you do. We do field service very well. We enable our customers to deliver flawless customer service. We want to be synonymous with field service. You need to be very careful. The power of the brand is around that space.
Nonetheless, the conversations with customers are about much more than the traditional definition of field service, he adds:
Customers want guidance on outcomes-based management and they express a lot of interest in the Internet of Things (IoT). Most of their awareness around IoT is around things like connected thermostats, Big Data and cool analytics work. But that’s got to be tied to the back end to deliver value. You’ve got to tie back to the things in the IoT. It’s about the things and things you need to do to the things. In certain industries, such as medical devices, you have to be able to track every single call and action. That’s stuff that needs to be maintained.
As a case in point of the bottom line impact service management can have, Yarnold cites the example of a customer which is a small company selling and distributing warehouse doors and elevators:
It’s a 67 year old company. Until recently it had been flat for 15 years. They looked closely at what they were doing as a business. They said, ‘Let’s differentiate ourselves by showing customers how much we care about them and about sales and service’. They implemented Salesforce and ServiceMax and got the whole company engaged around that.
They’re now seeing 100% year-on-year growth and going out and winning big new accounts because they have a reputation now as a company that’s looking forward and thinking differently about service. As a result they’ve got all the best technicians coming to them and wanting to work. They are awash with resumes of people wanting to work at a first that isn’t training up staff to be assets that can be squeezed on cost.
On a grander scale, Yarnold points to Coca Cola which in Europe uses ServiceMax on iPhones for managing and servicing vending machines:
That’s really a zero revenue business. It’s all about maintaining machines that allow them to sell their own products. They need to have a system that keeps that productive. But there are also ways you can capture up-sell opportunities as a result. If their teams are in McDonald’s and doing a great job servicing the soda fountains, why can’t they do the coffee machines or the friers as well even if they didn't produce those? That’s what’s happening and they’re getting revenue dollars that didn’t exist before.
Changing the conversation
These are examples that should be of interest to the C-suite in any organization, but to get those to the CEO and CFO’s ears has to mean moving the message on beyond the traditional IT decision maker with field service responsibilities. While the cloud model has given ServiceMax a head start here, there are still challenges to be faced on this front. Yarnold says:
The success of Software as a Service has led a lot of CEOs to think of that as a cool model. It may not be super-profitable initially, but the longer term implications are awesome. The challenge now is to elevate our conversation and talk to the CEO, the CFO, the VP of Sales and ask them why, since they have this service organization in place, why aren’t they leveraging those interactions for revenue creation?
We’re starting to see more of this. At the warehouse company I mentioned, our relationship is with the CFO, while my main contact there is the CEO. But we need to build more awareness. We’ve won the first part of the battle which was about managing service from end-to-end. Now we’re starting to take very large accounts with some of the biggest manufacturers and we’re getting attention from some of the largest ERP providers.
Yarnold draws a comparison between what’s starting to happen at ServiceMax and his previous employer, SuccessFactors:
We started by winning over the hearts and minds of HR, but then that escalated to other areas of the business and up the management chain. The same thing’s happening here.
But there needs to be a shift in C-suite thinking, towards putting services on a par with sales and not as an afterthought for investment, he concludes:
It drove me nuts when the iPhone 6 came out and all we heard about was how important it was to get them into the hands of the sales guys. You should be getting them into the hands of the service teams as well. They’ll use our app all day long and it will help them to differentiate the organization. With the sales guys, it’s great they have the phone, but is it going to have that much impact?
We've written a lot about the expanding footprint of what might be thought of as traditional field service management. The argument - and the case studies - that Yarnold puts forward should be one that has a place on any C-suite agenda. Yes, give the sales teams the latest iPads by all means. But neglecting the potential of the service team, by categorising them with a limited definition of their role, will increasingly be to leave money on the table.