Strategy & Leadership

Field Service’s Demise Has Been Greatly Exaggerated

I remember attending a conference at the beginning of my career in the late ’80s, where service executives from the leading computer manufacturers at that time (think Digital Equipment Corporation, Control Data Corporation, Burroughs and Univac) predicted field service would soon become extinct by 2001 — or soon thereafter. Their predictions were based on an observable trend that equipment was becoming more reliable and easier to support remotely.

Well, it’s been nearly 30 years and field service is booming.

Many of the predictions have come true, of course. Technology has become cheaper and more reliable. Product life cycles are shorter, which makes replacing older systems more affordable. M2M and remote support make it possible for many companies to resolve an issue remotely and avoid dispatching a service technician. Self-service options also make it possible for customers to manage the repair process. What’s more, fierce competition in markets like IT have reduced profit margins.

A New Type of Field Service (And Service Technician)

Do these trends support the argument that field service is going the way of the dinosaurs? Industry research suggests the answer is “No.” According to Markets and Markets, the global market for field service management software is expected to grow from $1.58 billion in 2014 to $3.52 billion by 2019. The growth numbers do not suggest field service will disappear anytime soon.

Technology isn’t threatening field service. Rather, the industry is booming because of advancements like M2M, the Internet of Things and servitization — but it’s a new type of field service. Here are five trends that will continue to sustain the changing field service industry.

1. Advanced Tech Makes Service Indispensable

Tools such as dynamic scheduling, mobility, knowledge management and spare parts planning software enable service organizations to optimize the coordination of parts, labor and other resources required to support the service delivery process. The result? More satisfied customers, more revenue, higher profits and lower costs.

Disruptive technologies like the IoT and Big Data provide service organizations with the tools to expand service offerings and be more proactive. As a result, customers are more dependent on field service organizations than ever before.

2. SaaS Streamlines Costs

SaaS-based applications allow service organizations to manage dispatch on a subscription basis. As a result, service organizations can quickly acquire and deploy modern service management systems, a process that used to require a lot of time and money. The subscription model also allows service organizations to better budget and manage costs, without building elaborate ROI justification models.

3. Technological Complexity is a Boon, Not a Threat

Every major technology sector, from IT to telecommunications, has experienced a similar trend: equipment becomes increasingly more integrated with microprocessors, hardware, network operating system software and connectivity equipment. This complexity requires fast, reliable and high-quality field service in many segments.

4. Cheaper to Send a Technician

Manufacturers now accept that there are trade-offs in cost and customer satisfaction in attempting to resolve all service requests through remote support. Although remote service can effectively lower operating costs and eliminate the need to dispatch a technician, there is a point in every service call when a truck roll is necessary.

The greater the service problem complexity, the longer it will take to resolve remotely, which leads to longer downtime for the customer — and higher support costs for the service provider. Field service dispatch can mitigate these costs and help to resolve the issue sooner.

5. Servitization Makes Its Mark

Manufacturers continue to look for opportunities to generate income through value-added services such as installation, integration, configuration management, training and process improvement. Field service technicians remain the best resource to deliver these servitization business models, which are rooted in emerging technologies like the IoT.

Why were the service executives in the late 1980s so far off in predicting field service’s demise? Firstly, they could not anticipate how software and technology innovations could create new revenue opportunities. Conventional wisdom held innovation as a way of cutting costs — and, of course, the biggest cost was people. Secondly, most companies viewed field service as a cost center, not as a profit center. As a result, they did not think strategically about innovation.

It is amazing how things have changed. To borrow the old Virginia Slims slogan, “We’ve come a long way, baby!”

A version of this article appeared on Reverse Logistics Today.

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