Quick — put down your wrench!
I’m going to tell you the surefire way to save you millions of dollars in your service organization, while simultaneously growing your bottom line. This is going to enable you to finally have that seat at the table and transform your service organization from a cost center to a profit center!
What’s the secret? You just have to do these 642 things!
I’ve often stated that transformation is a multi-pronged process. One that involves changing some of the fundamentals about how you operate as an organization. But it’s not often that we consider the best way to approach that change so it can be focused, measured, and achievable. In talking with some of the world’s largest and most established organizations, I often hear:
“Where do we start?”
“What do we, or what should we measure?” and
“Are we talking about the same thing within our various departments?”
The best way to see faster time to value is by taking a modular approach to your service transformation, and the first place to start is with installed base (IB) management. As an organization, you have a certain level of installed base understanding. Installed base is the term that refers to the equipment that is installed at a specific site. Installed base understanding gauges how much insight you have into things like your ‘as serviced’ equipment history and location. The service organization wants to capitalize on all opportunities, and the more insight they have into where their equipment is, the better they can target new or add-on service opportunities.
As a business, there are specific strategic outcomes you are looking to achieve. The installed base understanding from the service organization plays a critical role in ensuring those outcomes are achieved. If you have an increased level of insight into not only your equipment, but also all the associated equipment in those locations, you can identify areas of opportunity for service up-sell and cross-sell. Increased visibility into your IB leads to higher first time fix rates, as you now know exactly where a piece of equipment is located, what the work history is on the machine, and exactly what types of spare parts you may need should break-fix work be required. But, as your IB knowledge grows, it is increasingly less likely you will need to perform break-fix work, as you know when equipment is going to break down, and can perform maintenance before the customer even realizes there is an issue.
I often recommend and see organizations taking a geographical approach to updating their installed base. They will equip technicians in the field with the capability to capture and update equipment serial numbers, location, history, and more while on site. This achieves a couple of outcomes: reduction in truck rolls when you are just trying to figure out where your equipment is located, and gives you the opportunity to identify competitors’ equipment that may be installed in the same location, but does not have a service contract on it.
Where does that that lead? To higher levels of customer satisfaction (CSAT), and net promoter scores (NPS). But, ultimately, you end up with a higher customer lifetime value due to renewed contracts, and long term, stable annuity streams. That money can be used to invest in the business, expanding your growth potential even further. It’s like lining up dominos — topple the first one, and the rest start to tumble over. You may need to make a few adjustments along the way, but the momentum will continue to carry forward.
So where do you stack up when it comes to your level of your installed base understanding? Perhaps you identify more with the laggards in your industry. You have little to no understanding of your assets in the field, or it is limited to serial numbers with no history, installation dates, or maintenance data. Best in class organizations are utilizing things like connected assets with full track and trace on history and location. They are also utilizing the most complete and visionary software solutions to provide intelligent asset management.
Not only do these best-in-class organizations focus on the IB, they also realize there are a plethora of other key performance indicators (KPIs) that can be influenced by a high level of IB knowledge, such as contract attach rate, mean time to repair (MTTR), productivity, reporting, and service level agreement (SLA) attainment.
Take for example, Molecular Devices, one of the world’s leading providers of high-performance bioanalytical measurement systems, software and consumables for life science research, pharmaceutical and biotherapeutic development. Once they achieved greater insight into their installed base, the benefits started rolling in. Almost immediately they saw increases in customer satisfaction, greater collaboration between the service and sales organizations, and had a feedback loop into product research and development. They also saw a reduction in spare parts waste — the number two most expensive part of running a service organization!
Stay tuned for the next step of our modular transformation journey, where we will discuss the benefits of a work order management solution. To learn more about how companies achieve complete visibility of their installed base, check out this webinar on monetizing your installed base.