Oddly enough, MerriamWebster.com and Dictionary.com do not have a definition for Digital Transformation. One might suppose that the term is too new, but how can that be? The digital age started more than 50 years ago. According to Steven E. Schoenherr, Professor Emeritus at San Diego University, the Digital Revolution (also known as the Third Industrial Revolution) is the shift from mechanical and analog electronic technology to digital electronics and began in the latter half of the 20th Century.
This Digital Revolution really picked up steam in the 1970s and 1980s with the introduction of digital memory storage devices and the reduction in the size through the timeframes identified in Moore’s Law (increase the amount of digital transaction capacity by 100% every 18 months). This led to an amazing transformation in every facet of modern life.
Our friends at Salesforce define Digital Transformation as:
“The process of using digital technologies to create new—or modify existing—business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.”
Here at ServiceMax, we concur, but also add that Digital Transformation allows organizations to automate and digitize manual administrative processes, freeing people to focus on new and more value-added activities.
What Are the Stages of a Digital Transformation?
Within the market segment of asset and equipment management, the application of Digital Transformation varies almost as much as the number of instances where it has been attempted. Each manufacturer or service provider is at a different stage of maturity. When referencing the term “Maturity” we like to break it down into 4 stages. They are:
- Lagging – Significantly behind the market with regard to Digital Transformation
- Formative – At the beginning stages of pulling together the requirements and organizational will to implement
- Progressive – Have implemented and are working with Digital Transformative tools and improving operational result
- Visionary – Leading the development and utilization of digital toolsets and practices.
How Do Digital Transformations Play Out at Service Organizations?
Of course, there is no one “Digital Transformation” in equipment and field services. There are many discrete areas within a services organization, and they can all benefit from better tools and capabilities. We evaluate a number of different aspects of asset and equipment service delivery to determine an overall Digital Transformation Maturity Level.
For example, service organizations may invest in leading-edge mobile technology but not change the way they manage inventory. They might automate customer satisfaction surveys while continuing to utilize paper job tickets.
Here at ServiceMax, we evaluate 21 different aspects of service delivery to determine an overall Digital Transformation Maturity level. We look at metrics like:
- Service Contract Attach Rate at the point of sale and post point of sale
- Technician Utilization
- Service Contract & Warranty Leakage
- Utilization of the Internet of Things (IoT)
- Mobility solutions
- Data analytics and reporting
We believe that this gives us a holistic view of where and how organizations have approached Digital Transformation and where there are opportunities for further investment.
Is Digital Transformation Effective?
Companies that successfully transition from traditional, manual processes see significant improvements in operational performance, which lead to huge financial benefits. By removing busy-work, your teams can focus on their customers, fixing equipment correctly the first time, finding additional revenue sources, and ensuring that you can bill for everything that you should be billing for. Increases in as many as 30 separate performance indicators are not uncommon. In working with our customers, we’ve seen improvements such as:
- Service completion to invoice cycles reduced to a single day
- 20% improvement in technician utilization
- 2x improvement in back-office utilization
- 20% reduction in contraction leakage
When is a Transformation Complete?
There are many stages of Digital Transformation, from the organizations just dipping their toes in the water to those advanced practitioners who have already benefitted from significant improvements and are looking to continue to refine and improve their performance.
The one constant is that there is no “end” to Digital Transformation, it is a process that will keep on evolving, progressing, and expanding. Companies that have, for whatever reason, not taken advantage of it will find that they will fall further and further behind their competition. It is a journey and not a destination, and we here at ServiceMax are eager to help you take those first steps.