In 2020, we published a white paper that outlined how heavy equipment dealers were looking to transform their organizations with the aid of digital tools. For these dealers, the transformation was taking place in three primary phases to counter some economic, workforce, and customer-driven challenges. The three phases highlighted were:
- Business Visibility
- Digital-Driven Revenue Growth
We outlined how these phases weren’t necessarily sequential and how improvements in one enabled investment and improvement in another. In 2020, Covid-19 caused dealers to temporarily halt their digital ambitions in the short-term, but to overall accelerate their digital investments to cope with increased volatility and flexibility. We see Covid-19 continuing to drive digital ambitions in each of the transformation phases in 2021.
As we enter 2021, heavy equipment dealers will face a number of new and growing challenges to business visibility. These challenges were not all caused by the Covid-19 Pandemic, but in many cases, they have been amplified by it. While some businesses were caught completely unaware and forced to shutter their doors, many equipment dealerships found themselves in a new category – they were now officially “essential services” responsible for keeping the freight, produce, mail, packages, products, and all of the public’s essential items moving through the supply system.
This was in many ways fortunate; they continued to operate, generate income and maintain employment, but they also had to shift operations on the fly to adapt to Covid-19. Through Herculean effort, they adapted and adopted new working processes and procedures, all while ensuring continuity of services and adding additional health and safety practices. As stated by the CFO at one lift truck dealer, “We had to embrace a touchless transformation and not just a paperless one.”
Many equipment dealers and service shops now need a reset, a breather to understand what the future looks like post-Covid-19 and how to organize and manage their operations, resources, and technology moving forward. However, it seems that the “New Normal” will most likely look a lot like the present. As an essential service, equipment dealers and service organizations need to be able to “keep the world running” regardless of what is happening throughout the world. Therefore, some of the changes that have been adopted will most likely become permanent. Preeminent among them is the technology and systems that allow for improved business visibility and accountability to a geographically dispersed workforce.
Remote working, once generally frowned upon and considered part of “Business Continuation” in Disaster Recovery Plans, will most likely remain the preferred operational model. Organizations will come to appreciate that it is less expensive, drives greater productivity, and improves employee engagement to allow staff to continue to work remotely. Additional attention will also need to be paid to staffing. While there has always been a chronic shortage of qualified and interested talent within the dealer networks to service and maintain complex assets, the reality is that the pandemic has not created a ready pool of eager candidates. According to the Gartner Blog, 7 Macro Factors that Will Shape the 2020’s, “Reconsider what types of skill sets will be needed in the post-COVID-19 world, and begin or increase reskilling programs during downtimes. Introduce agile learning as a core management philosophy and consider ways to widen the talent availability pool by rethinking remote work or gig economy options.” All good recommendations, but all rely on continued and targeted investment in technology.
So, as shown above, business visibility has actually been advanced by Covid-19. Due to their status as “Essential Services” with essential front-line employees, dealer networks and service providers had no option but to embrace the technologies that enabled remote working and empowered those who were already working in the field. Building on that investment and process management, organizations need to expand beyond “remote working” and develop technician reskilling, newer tools, and easier adoption of technology for their teams. The data now available from these tools needs to be harnessed and used to drive improved efficiency, productivity, and reduce customer effort.
As a result of Covid-19, equipment dealers had to be extra flexible and responsive to customer needs. Service and Preventive Maintenance visits had to be delayed or canceled to account for business shutdowns or enhanced safety protocols. When visits were scheduled, they were typically more urgent in nature and dealers had to ensure the availability of resources to ensure asset uptime.
A greater amount of attention also had to be paid to safety when scheduling work on customer sites. New processes and protocols had to be quickly incorporated to allow for access to customer or dealer assets. These adjustments had to be made more than once and dealers needed to ensure that their systems were flexible enough to account for quick changes that didn’t require major IT upgrades. Limited access to customer sites also accelerated the investment in remote support tools, either to directly assist customers or to ensure that technicians could resolve service events on a first visit. This was imperative in ensuring the highest level of resolution with limited access. Even if access restrictions ease in 2021, we anticipate that dealers will continue their experimentation with remote support tools, primarily focused on making their technicians more effective in resolving customer issues.
In 2021, we expect a continued investment from dealers in reducing customer effort and making it easier for customers to do business with dealers. In some industries, this comes in the form of drive-by pick-up of ordered parts or equipment without the need for the customer to set foot within the dealership. In service, investments will continue to be made to give customers better access to portals or applications that allow them to view their service assets, track work history, schedule service events (without a phone call), and review related invoicing. These self-service investments will be made to empower customers with necessary information so that they don’t need to chase it via multiple phone calls, emails, and dealer visits.
Data-Driven Revenue Growth
Covid-19 related themes of remote work and customer-driven agility gave rise to significant opportunities for equipment dealers and maintenance providers to improve their data infrastructure to support business growth. While required to remain in production as “essential services,” the investment in technology and revised operational procedures also introduced new performance measurements, increased communications capabilities, and improved productivity.
All of the technology that enables remote workers also enables remote data capture. The same technology that allows for real-time communication between Dispatchers and Service Advisors with Field Service Technicians also allows for lead sharing between the Field Services Team and Inside Sales and Account Executives. Revenue Growth increases drastically when more PM’s are scheduled, more maintenance tasks are completed, and more parts are consumed. As the technology to allow folks to work remotely is employed, better visibility into the work in progress (WIP) is enabled, allowing for tighter scheduling, more jobs per day, and more invoices per week and month. In addition, the transition to electronic work orders/service requests also streamlines the back-office tasks of completing invoicing in their ERP systems, reducing the time from service completion to invoicing time, and reducing the amount of revenue lost from missing invoicing windows.
In the longer-run, digital data capture also lays the foundational structure for a digital service language and even a digital operating language. Improved data on equipment failure and resolution captured on a larger and more digital scale can afford opportunities for the organization to predict and plan for service events in the future. This allows for better decision making around resource levels, be it people, parts, knowledge, or expertise. A service language also greatly impacts the value of investments in Artificial Intelligence and the Internet of Things—areas where we expect dealers to continue to make measured progress in 2021.
Success in 2021: Employee Enablement, Business Flexibility, and Customer-Centricity
Dealers across various industries are optimistic about their prospects in 2021. Some of this is tied to improved expectations around the response to Covid-19 along with expectations of more ‘normal’ economic activity. Optimism is also fueled by the fact that dealers who have made the investment in digital tools are more agile and prepared to deal with subsequent shocks that might impact customer demand or need for service activity. These tools have empowered their employees with the right knowledge and information to truly support customer needs, drive customer loyalty, and foster stronger customer relationships.