Historically, field service organizations have not been viewed as centers of innovation. According to the TSIA Field Service Benchmark, the average age of warehouse management systems is 10 years old, case management tools average eight years, and scheduling and dispatch tools, as well as contract and entitlement systems each average seven years old.
However, today’s field service teams are under pressure to continually improve delivery margins, create revenue, and meet and exceed customer expectations. As a result, field service is becoming more digital, and embracing new tools and processes.
What is digital transformation?
At the core, digital transformation means using digital technologies to transform how an organization operates, interacts with, and delivers value to its customers. Goals for transformation projects range from increasing efficiency and cost-effectively scaling resources, to improving the end-to-end customer experience and ultimately driving revenue and profit.
Over the last decade, tech companies have launched transformation projects with varying success and in my experience, few have delivered the desired result. Many are hampered by the cost and complexity of technology which often included overly ambitious plans that proved impossible to deliver. However, the most common root cause of failure I have seen is change management. Digital transformation requires organizations to change their culture, their processes, and organizational structures but many companies simply can’t overcome the change management challenges needed to succeed.
In this blog, I’m not going to boil the ocean on enterprise-wide transformation. Instead, I’m going to focus on an area with proven technology, established processes, and a lot of successful case studies: digital transformation in field service.
Why is digital transformation important in field service?
Field service organizations are under pressure to meet tight service level agreements, deliver excellent customer service, and produce a high first-time fix rate. There are multiple trends driving digital transformation in field service which can lower cost of delivery and improve the customer experience, including:
• Mobility and mobile devices. With mobile devices now ubiquitous, field techs can perform most of their jobs on a mobile device. This includes remote trouble shooting, ordering parts, logging time on site and documenting work performed all from a mobile device, eliminating the need to carry laptops and other equipment. Mobile applications continue to evolve, incorporating features to further streamline activities and boost productivity.
• Aging field tech workforce. A TSIA Field Service Workforce Optimization and Compensation Study found that 40% of field service engineers in the US and Canada are over 50 years old. As these experienced techs retire, they take a lifetime of knowledge with them, and replacing this skillset is very difficult and expensive.
• Advanced Internet of Things (IoT) capabilities. In decades past, device companies built their own “phone home” capabilities to access remote systems for diagnostics, but these were problematic due to security issues and limits of internal development. Today “best of breed” providers are delivering highly sophisticated IoT technology that not only can proactively monitor remote equipment in a secure mode, but also leverage artificial intelligence and machine learning to identify patterns and trends in data.
• Virtual and augmented reality. Technology for AR/VR is now readily available and can provide field techs with line of site to customer equipment for remote trouble shooting. It can also help walk customers or less experienced field techs through problem diagnosis and parts replacements.
The benefits of digital transformation in field service
Digital transformation in field service has a wide range of benefits. On the tactical side, it is allowing the team to scale and lower the cost-of-service delivery more efficiently. In a more strategic sense, digital capabilities have the potential to transform the customer experience leading to higher annual recurring revenue (ARR). We are also seeing some changes to the core field service business model, moving from cost center to profit center, producing a new revenue stream from existing field techs. Some of the key benefits to digital transformation in field service are outlined in the following sections.
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Helps to save time and money
Though media articles on digital transformation tend to focus primarily on advanced capabilities such as AI, we can’t lose sight that it also implies automating manual tasks, and consolidating systems to allow easier access to information. From a purely cost savings and productivity perspective, digital transformation can benefit field service in multiple ways, including:
• First-time fix rates. By implementing intelligent mobile scheduling and routing, which can factor in a technician’s current location, parts on their truck, experience, certification and other impactful skills and details, it not only streamlines scheduling but can also dramatically reduce time onsite and increase first-time fix rates, which currently average 85%.
• Remote diagnostics. Access to accurate diagnostics bolster technician abilities allowing them to provide more onsite, remote troubleshooting and increases their ability to implement successful resolutions. Currently 49% of incidents require onsite assistance, and only 37% of customers have diagnostic capabilities embedded into the products.
• Remote coaching. As companies begin to see more of their field techs retire, they can prevent brain drain and loss of knowledge by using real-time video and virtual reality. Instead of recruiting expensive experts, I have seen companies move experienced techs into a role in which they coach less experienced techs—or even customers—through diagnosing problems and replacing parts, which dramatically lowers delivery costs.
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Increased customer satisfaction
With TSIA data showing a strong correlation between satisfaction with service and customer health and renewals, improving the customer experience has gone from an art project to a strategic directive. There is a lot in digital transformation to improve the customer experience and lower the effort required by customers, which in turn drives increased satisfaction. Examples include:
• Scheduling transparency. Much as we’ve come to expect when scheduling an Uber or ordering from Door Dash, mobile capabilities have allowed customers to be better informed about appointments, with updated arrival times, maps showing the location of the tech, and the ability to easily communicate with a tech prior to them arriving onsite.
• Digital channels. According to TSIA’s Channel Preference Study, customers are increasingly embracing digital channels for support. When asked which channels they preferred or occasionally use for product support, many newer digital channels were high on the list, including web chat (67%), WhatsApp (63% overall, and 92% in Brazil), and SMS text (54%). Particularly for customers contacting support from equipment rooms or data centers, phone calls or email may not be the most convenient method of interacting with support.
• Proactive and preventative. The ultimate customer experience is never having to contact support at all. This is enabled with more sophisticated IoT technology, which can detect potential hardware failures, order a part, and dispatch a tech all without customer intervention. Not only does this reduce customer effort but it can also eliminate downtime, which is a major cause of friction for enterprise accounts.
Support and field service operations have been on a long evolution from cost center to profit center. As tech firms evolve from selling on-premise hardware to managed services, the business model of field service is also transforming. Three examples of this include:
• Premiere support offers. We typically think of premium field service contracts as having shorter service level agreements for response and resolution time. However, digital capabilities are allowing more premiere options, which provide additional incentives for customers to increase wallet share. 47% of companies have a premiere offer for proactive monitoring of remote equipment and 43% are now making uptime commitments, which also requires remote monitoring to measure uptime and automatically detect issues that may cause down systems.
• Field service as a revenue engine. With their onsite familiarity with accounts, we are now seeing field techs dispatched for revenue work, not just repairs. One EMEA based copier/printer vendor uses field techs to perform for-revenue work, such as installing or configuring printers. Customers browse an online catalog of services, select what they want, and a field tech is dispatched to perform the work. Hundreds of field engineers are each undertaking up to 15 for-revenue projects per week.
• Data-driven selling. According to TSIA’s Field Service Benchmark, 48% of companies are incenting field service engineers to identify cross sell/upsell opportunities. This is increasingly becoming part of a digital strategy, mining historical purchase patterns to identify the most likely product or service to position to a customer at a specific time in their lifecycle. Field techs have a unique position, being in the offices of their customers, and are well positioned to identify business challenges that have associated offers that account managers can extend.
What role will service leaders play in digitalizing field service?
Service leaders obviously play a critical role in digitally transforming field service. They set the vision and strategy. They secure the funding and build the right team. They oversee projects, set goals for outcomes, measure success, and adjust as needed.
• Sell the plan with benefits to the company, employees, and customers. If you expect your employees and customers to go on this journey with you, you must lay out what is in it for them. Why are you doing this? How will this benefit the company? How will it improve the employee and customer experience? This step is often neglected and as a result both employees and customers feel browbeaten as new tools and processes are pushed and forced without much explanation.
• Identify influencers and involve them. It is naïve to think that employees and customers will immediately support new approaches and tools because they are told to do so. Though influence from above is necessary, building support for the project throughout the user community is also very beneficial in overcoming barriers to change. This means identifying high profile customers, executives in impacted lines of business, and long-term or highly visible employees, and involving them in project planning and early adoption.
• Heavily publicize early wins to gain support. Transformation projects vary in time, they can be 12 to 18 months or a larger phased project can be three to five years. To keep the momentum going, it is critical to heavily publicize early signs of success to show positive results, to reenergize change-weary employees and customers, and to recommit them to seeing the project through.
The future of field service and digital transformation
As I’ve outlined in this blog, there are many digital capabilities available today that pacesetters are leveraging to improve field service operations and the customer experience. However, with AI and large language models evolving, at a sometimes frightening pace, we are only at the very beginning of how digital technology will transform field service.
According to TSIA’s Field Service Benchmark, only 0.3% of B2B field service cases are being resolved by self-healing repairs. With increased intelligence, systems will be better equipped to self-diagnose and repair problems which at some point will eliminate much of the manual work involved in field service.
With quickly accelerating virtual reality, self-service will soon move from the website to a virtual world, with customers receiving automated assistance to do the work of today’s experienced field technicians.
As my colleague Kevin Bowers, Director of Field Service Research for TSIA said at our recent TSIA World INTERACT event, in the future a technician will be printing the part they need for a repair using a 3D printer in the back of their van on the way to the customer site.
Rapid technology innovation isn’t easy to predict. As long as each of us—from front line employees to corporate executives—continue to embrace the potential of new capabilities, are ready to do trials of interesting developments (acknowledging many will fail), maintain an open mind, and learn to thrive on change, the future benefits of digital transformation are endless.
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