A 50 percent reduction in labor costs, and virtually no drop in customer service levels? That’s the promise of outsourced technology field service, according to a recent guest post on Supply & Demand-Chain Executive.
Take the post, which is written by Marty Reader, the executive VP of sales and marketing for FieldSolutions, Inc., a field service outsourcing firm, with a grain of salt, then. Nonetheless, he makes some compelling claims: By adopting Web-based outsourcing technology, national field service operations can reap huge cost savings by eliminating travel costs, most dispatch costs, employee benefits, and eliminate wasted technician downtime.
Reader cites (but doesn’t link to) industry research suggesting that using independent contractors can enable organizations to save up to 70 percent of such costs, compared to full-time employees, and 50 percent over local third-party companies. Meanwhile, customer satisfaction remains high, through the ability to weed out under-qualified technicians based on performance metrics.
“Through these processes, the service level agreements (SLAs) that meet customers’ requirements have held steady at extremely high levels of quality. These performance standards remain fixed at a 92-to-97 percent level of success for on-time performance and first-time resolution including documents; photos; sign-off sheets; test data runs; and parts/device returns. It’s important to recognize that these levels of performance are roughly equal to the levels attained by full-time technical employees and, consequently, signify a definitive change in quality expectations.”
The question of outsourcing service technician labor has been a vexed one for many companies — certainly the rise in companies like FieldSolutions and OnForce has made it easier than ever for large companies to adopt these Web-based online job-bidding portals — and given the staffing reductions of the past four to five years, several companies have chosen to turn toward contract labor rather than re-hiring full-time workers. However some technicians argue that the quality of work can suffer without full-time dedicated employees trained to troubleshoot company parts and equipment, and that such arrangements often take advantage of out-of-work technicians willing to bid a job below market value. It’s a topic we’ve covered in the past:
- The Good and the Bad of Service Tech Outsourcing
- Putting Field Service Techs to Work, One Order at a Time
- Service Outsourcer OnForce Touts ‘Efficient’ Job-Filling Model
Does your company outsource any of its field service operations? Let us know — why or why not?
Click here to download a free whitepaper, “Five Steps to Make Field Service Profitable.”
reckon it can. It takes commitment to really serve the customer as best as they can. Do this and you will be on your way.
As of now, our company isn’t outsourcing field service operations. Mainly, outsourcing is done through individual contractors at the moment.
Thanks for the input, Jeff. How large is your organization?
Thank you for this very informative post.