SGS Automotive overhauls field service after earlier backfires

Profile picture for user jtwentyman By Jessica Twentyman June 23, 2016
Summary:
A struggling implementation of field service optimization technology comes good after some tinkering with the business processes at the heart of its engine

SGS auto inspection 370px

Field service optimization is fast emerging as a key battleground for enterprise software vendors, as Diginomica has pointed out before. But when you talk to end-user customers of these products, they’ll mostly tell you the same thing: Don’t put your faith in these products, unless you’re ready to engineer some real changes in the way that your technicians are dispatched to perform work in the field. No pain, no gain, is a good rule of thumb.

Take, for example, Tony Perkins, vice president of automotive services in the United States at global inspection, certification and testing business SGS. Not long ago, Perkins faced the nightmarish prospect of pulling the plug on a floundering field services optimization project. Had he done so, it would have been the second such project his division had walked away from in recent years. How he and his team recovered from this predicament holds valuable lessons for others seeking to optimize field service performance.

SGS is a vast and sprawling business, one of the “biggest you’ve never heard of”, as Perkins likes to joke. This $6 billion organisation provides testing and certification for all manner of products – the dyes in our clothes, the food on our plates, the cars that we drive. It’s that last category that Perkins’ division focuses on. More specifically, its Commercial arm provides vehicle testing as an outsourced service to automotive manufacturers and organisations that provide car financing in the US.

Vehicle inspectors

So if US readers have ever leased a car, it may have been SGS that provided an at-home inspection as that vehicle reached the end of its lease period. Every year, SGS inspectors provide around 450,000 of these inspections. Likewise, they are also involved in inspecting, auditing and providing condition reports for pre-owned vehicles ready for resale by dealerships and auctioneers. They’ll take pictures, they’ll identify previous repairs and they’ll provide a detailed report that gives the company’s corporate customers – and the next consumer who ends up behind the steering wheel – the confidence of knowing a vehicle is roadworthy.

Perkins has a team of around 400 of these inspectors working across 50 states, who all report in to a call centre based in Cincinnati, Ohio. A few years ago, when he first joined the division from elsewhere in SGS, it quickly became clear to him that there were significant problems in the way these inspectors were managed and jobs were allocated, he says:

Our call centre was scheduling appointments based on customers’ availability, rather than on what was good for our business and what was good for our inspectors. Inspectors determined their own routes and were paid on a per-day basis, rather than the volume of inspections they completed. They’d be given a book of work, and we’d just hope they’d go away and do it. There was some praying involved.

Prayers, however, brought the team little joy. A high volume of cancellations meant that many jobs were frequently returned to the queue. Revenue forecasts were unreliable. Inspectors were regularly hired and then furloughed according to fluctuations in seasonal demand. Inspectors weren’t happy, nor were call centre staff – and nor were managers in SGS Automotive Services, says Perkins:

We were always under the gun. Customer SLAs weren’t being met and profit margins, frankly, were terrible.

Crisis meeting

What was needed, it was decided, was a field service optimization tool that could solve the division’s scheduling and dispatch problems, improve customer service, and boost productivity rates so that more inspections and audits were carried out. Despite its history of a previous failed implementation with another, unnamed provider some years earlier, an implementation of field services optimization technology from ClickSoftware was agreed to be the best course of action – until the metrics started to come in after the 2Q2014 ‘go live’ date, that is.

We expected a temporary drop in productivity, sure. We suspected there’d be problems with user acceptance and process change. But what we saw was not just an accelerated drop in productivity, but also an increase in mileage and a fall in the number of jobs getting done each day. The only good news was a slight improvement in meeting customer SLAs, but that wasn’t enough.

Perkins decided to get tough. An internal audit was launched which culminated in a crisis meeting with executives from ClickSoftware, where pulling the plug was discussed as a serious possibility. Says Perkins:

I brought out a big hammer and started knocking heads. But while the hammer helped, it also became clear to me that it wasn’t the software that was to blame. It was our implementation of it. If you build an optimization tool around an inefficient set of processes – guess what? You’ll get terrible results!

In the first implementation of ClickSoftware, he says, the company had misjudged its decision on which business rules should take priority to guide optimization. Should it be meeting customer SLAs, reducing inspector mileage, maximising revenue per headcount or dealing with jobs on a ‘first in, first out’ basis?

We’d been thinking in terms of customer service and meeting our SLAs to customers – that was number one. That sounds sensible enough, but it’s exactly where we went wrong, because it led to inspectors driving some crazy routes. Once we changed it to maximising revenue per headcount, we found we were getting more inspections out of each inspector. So productivity went up, but it made our customers happy, too.

Getting results

ClickSoftware was relaunched at SGS in 2Q2015, following a reconfiguration of the underlying business rules to align with the revised priorities. The results of the re-implementation have been impressive. Productivity is up 20% and SLA penalties are down 40%. Revenue per headcount is up 9%. Says Perkins:

Most important is the fact that we’re now proactively managing our operations and that’s done an amazing job in terms of improving morale. It took real work to get these results, but software isn’t a magic solution and you can’t expect it to improve your business by itself. That’s so easy to overlook, but executive ownership and ongoing attention are really the only way forward in implementations like this.