Building a Business Case for Field Service Technology
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1 Building a Business Case for Field Service Technology
2 VP, Global Customer Transformation Patrice brings over 18 years of services and leadership experience to ServiceMax, and has held key leadership roles in several fastgrowing software companies. Focused on delivering high impact and long-term customer success, Patrice has a broad background in all aspects of implementation delivery, from methodology to package content, as well as creating/implementing best practice strategies for deployment, training, and adoption across large and complex organizations. Patrice Eberline Prior to ServiceMax, Patrice was with SuccessFactors, serving as Global Director of SMB Professional Services as well as SuccessFactors University. Prior to SuccessFactors, she was Vice President of Professional Services at Infor, where she led a global staff of consultants across 4 discrete Corporate Performance Management practices and hosted operations.
3 TOPICS Field Service in the spotlight Traditional approaches Business Value Realization approach and metrics that move the needle The Comprehensive Business Case Best Practices
4 Service Management has always been after the fact
5 Historically paper based or legacy systems
6 The past does not equal the future
7 ROI and TCO Tools Cost Focus Revenue Focus Field Service Specific Connection to Business Realistic Comprehensive
8 Cost Focus Revenue Focus Traditional Benefit Calculators Field Service Specific Connection to Business Realistic Comprehensive
9 Business Value Realization Cost Focus Revenue Focus Field Service Specific Connection to Business Realistic Comprehensive
10 Business Value Realization Cost Focus Revenue Focus Field Service Specific Connection to Business Realistic Comprehensive
11 No visibility into installed base? Inconsistent service? Low NPS? Missed upsells? Long invoice times?
12 Metrics to Improve First-time Fix Workforce Utilization 27% 30% Workforce Productivity 35% Customer Satisfaction Service Cost Service Revenue 44% 46% 48% 0% 10% 20% 30% 40% 50% 60% Metrics in focus for Percentage of Respondents, n=226 THE SERVICECOUNCIL. NOT FOR DISTRIBUTION. TSC Data, June 2013
13 New Internal Challenges Workforce turnover Aging workforce; loss of knowledge & skill Executive mandate to increase field efficiency Executive mandate to cut costs 0% 20% 40% 60% 80% Source: Aberdeen Group, May 2014 % respondents
14 TOP CHALLENGES, PERCENTAGE OF RESPONDENTS, N=170 Evolve or Competition in product & service Reduced service margins 39% 36% 29% 52% Get Left Behind Reduced customer spending Increased product complexity 35% 34% 31% 24% Currently Previous 12 months 0% 20% 40% 60% Source: December 2014, Aberdeen Group
15 Evolve or Get Left Behind Top Strategic Actions Driving Field Service Improve forecasting and planning for future service demand Increase availability of service knowledge in order to diagnose and resolve service issues more quickly Invest in mobile tools to provide technicians with better access to information in the field Implement predictive/prescriptive analytics to enable proactive service vs. reactive break/fix service Develop real time visibility into field assets (ie people, parts, vehicle) Best in Class 57% 48% 43% 40% 40% Develop standardized scheduling processes 38% Source: Aberdeen Group, May 2014
16 Business Objectives Underlying Problems Stakeholders Key Metrics The Business Case Solution Financial Modeling Business Case
17 Key Metrics Financial Modeling Field Service Value Realization Modeling
18 Business Information Investment Data Prioritization Field Service Value Realization: transparent defensible metrics-based Minimum ROI Expected + Additional benefit potential based on Company profile, etc.
19 SLA Compliance Improvements Increase in Employee Engagement Increase in NPS Uptime Increases Reduction in Supply Chain Costs Reduction in MTTR FSE Utilization Gains Trunk Stock Visibility Dispatch rate reductions Reduction in Inventory Carrying Costs Reduction in Workforce Planning time Field Tech Productivity Gains Emergency Shipment Reductions Technology cost reduction Reduction in Admin and IT support costs
20 Universal Nine 1 Contract Attach Rate 2 Leakages 3 Net Promoter Score (NPS) 4 First Time Fix 5 Service Level Agreement (SLA s) 6 Technician Productivity 7 Mean time to repair (MTTR) 8 Upsell / Cross- Sell 9 Uptime
21
22 Five Key Metrics
23 Service Revenue Attach Rate
24 Contract Leakage & Warranty Leakage
25 First Time Fix
26 Service to Cash cycle time
27 Measure Benchmark Repeat
28 Industry Reference Metric Laggard Average Best in Class Attach Rate 4.9% 11% 16% Leakages 40% 24% 14% First Time Fix 63% 80% 88% Service to Cash 46 Days 43 Days 33 Days Source Aberdeen Service to Services 12 Aberdeen Service to Services 12 Aberdeen Field Service 14 Hackett Group Credit and Cash Collection 11
29 Key Business Benefits Expected Increase in Service Revenue attach rates Expected decrease in warranty and contract leakages Expected increase in FTF rate Service-to-Cash cycle time Key Technology Benefits Legacy License and Maintenance Fees Legacy Upgrade and Customization Cost Legacy IT and Application Support Legacy infrastructure and hosting costs Legacy Training and Other ROI Additional Benefits Customer Sat/Loyalty improvement SLA Compliance improvements Renewal rate increases MTTR reduction FSE Utilization gains CSR productivity gains Cross sell / up sell Operating cost reductions around inventory carrying costs, spares, emergency shipments required, supply chain, etc
30
31 Financial Modeling High Level Return Summary
32 Financial Modeling $4,000,001 $3,000,001 $2,000,001 $1,000,001 Cumulative Cost/Benefit $1 $300,000 $200,000 $100,000 $ Months Ongoing Monthly Cost/Benefit Cost / Benefit
33 Financial Modeling Deployment Ramp Post Go Live Users Months post Go Live Cumulative Users Deployed Ramp and Payback
34 Financial Modeling Top 5 Key ROI Payback Benefits 50% 2% 16% 29% 3% Service Revenue Attach Rate Service Contract Leakage Warranty Leakage FTF (First Time Fix) Rate Key Operational Benefits
35 Financial Modeling Key Technology Benefits
36 Additional Benefits Metric Current Expected % Improvement "To Be" Benefit Increase in SLA Compliance Rate (Penalty Avoidance) % $12,150 Increase in Contract Renewal Rate % $93,000 Increase in FSE Utilization 0.7 0% 0.7 $0 Reduction in MTTR (Mean Time to Repair) 80 0% 80 $0 Reduction in Inventory Carry Costs % $2,800 Reduction in Service Supply Chain Costs % $0 Reduction in Emergency Shipments % $35,000 Reduction in Spare Parts Shrinkage % $15,750 Increase in RMA Fill Rate % 0.55 $72,500 Increase in Spare Parts Fill Rate 0.9 5% $36,250 Increase in CSR Call Deflection Rate 0.5 5% $125,000 Reduction in Field Service Dispatch Rate 0.5 5% $625,000 Increase in T&M Profitability - 0% - $0 Reduction in Field Operating Costs - 5% - $42,750 Increase in FSE Productivity - 5% - $390,000 Increase in CSR Productivity - 0% ROI - $0 Increase in Brand Loyalty Increase in Employee Satisfaction Increase in Customer Satisfaction/ NPS Top Additional ROI Benefits TBD TBD TBD
37 Business Objectives Underlying Problems Stakeholders Key Metrics The Business Case Solution Financial Modeling Business Case
38 TOP 5 BEST PRACTICES 1. Keep it simple, defined, defensible 2. Target Payback for no more than 2 years 3. Make a business-led initiative- tie to objectives 4. Don t forget the soft benefits 5. Use the business case as a framework for implementation focus, and as a baseline for monitoring results
39 A final note
40 Continuous Improvement BUSINES S CASE IMPLEMENT REFRESH DEPLOY MONITOR
41 Q&A Session
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