Transforming your service business - from cost centre to profit centre. Field ServiceWhitepaper

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1 Transforming your service business - from cost centre to profit centre Field ServiceWhitepaper

2 In an effort to maintain business viability and keep your engineers working out in the field some service-oriented businesses may be tempted to take on clients with narrow profit margins. They then tend to over-deliver to retain the client s business in an aggressively competitive marketplace. This trend is entirely understandable, but is not a sustainable way of doing business. We discuss here the value of adopting an evidence-driven approach to understanding which areas of your business and client base are most/least profitable and using this evidence to: Take strategic decisions about your future business direction Model what your ideal client looks like Hold meaningful conversations with your clients to build profitable relationships with them Analyse where internal processes are undermining your profitability All of which can be used to turn your service business from a cost centre into a profit centre

3 Knowledge is power On any given day, could you easily say for certain: Which are your most/least profitable contracts and types of job? Which are your most/least profitable clients? Could you then drill down to the underlying detail, for example to see where your engineers time has been invested on your current contracts or compare actual job and engineer costs against the original budget? To trawl through records and gather together this essential information could add a huge administrative overhead for your business, but with an integrated service management system in place it needn t become a hassle. Advanced Business Solutions range of service management software, including Siclops and Service Director, quickly shines light on whether the user organisation is making or losing money on a job. They are then able to take appropriate action, such as updating the plan or reviewing their billing structure for that contract. Property protection systems and servicing company, Barry Bros Security explains how their Siclops service management solution has enabled them to gain meaningful insight into their business data: All that valuable knowledge acquired about the client, their contract or the site is stored on the system. Siclops brings together the full history of their interactions with our different departments. We access this information to ensure clients receive an informed response, even if their regular contact is out of the office.

4 Compiling the evidence Your service management solution should be able to do all the work of collating real-time information automatically across your jobs. It should also make easy work out of presenting it in the formats you have defined as being most useful to your business, giving your management team full visibility of your contract profitability and equipping your decision-makers with instant access to vital information on your business, including your cash flow situation and profit forecasts. As a matter of course, your data should be regularly analysed in a multitude of ways and in varying degrees of complexity, from viewing a daily high-level graphical dashboard with key performance indicators, down to examining monthly detailed reports. Barry Bros explains the vital role of software in gaining quick access to business critical information and being able to share the information with fellow decision makers: Providing the excellent service on which we ve built our reputation means having ready access to everything that anyone within the company knows about the client and being able to respond quickly and put our hands on essential information.

5 Modelling the perfect profitable client To build a sustainable business, you need to focus on those jobs, contracts and clients that are most profitable, rather than trying to be all things to all clients. The Forum of Private Business ( warns that it s all too easy to become a busy fool. It is worth stepping back and analysing your client base to identify: Clients who are already profitable How can you quantify for them the work that you do, so that it is recognised and suitably remunerated? How can you keep these clients locked in by delivering service beyond the agreed SLA but without draining your resources and revenues? Clients who could become more profitable How could you better manage the time you spend on their projects? Can you identify where you are providing more than you agreed within the contract and budget? Do you have an evidence base that will support you in negotiating with clients to pay more or expect less? Clients who are unlikely to ever become sustainably profitable How could you redress the balance and bring these clients back within acceptable parameters? If the evidence shows that these clients are always going to be an excessive drain on resources, do you need to make the decision, difficult though it may seem, to agree to go your separate ways in order to free up your engineers valuable time and resources for more profitable jobs? By gaining a better understanding of every client s worth to the business, you ll be well placed to decide where to invest your resources for optimum return, both in retaining clients and pursuing new business.

6 Uncovering the value you deliver Improving customer service and providing unparalleled service quality are typical field service buzzwords. But how can you really ensure that what you are delivering is adding genuine value to your clients? And what can you do to ensure that your value-add is fully recognised by the client? Many service organisations now approach many of their major clients as strategic partners, rather than just mere end-users, working in collaboration to ensure both parties mutually benefit. In fact taking this collaborative approach bodes well for long-standing relationships and increased profitability, as Service Director customer Bullwell Trailer Solutions explains Feature Focus: Bullwell Trailer Solutions Independently owned Bullwell Trailer Solutions Ltd. specialises in providing trailer repair and maintenance solutions, carrying out servicing via their mobile service vans on customer sites and at the roadside. Each of their vans is run as a profit centre and their engineers use the business service management system to see how their improved efficiency and utilisation feeds through into the company s bonus scheme. The past twelve months have marked a record trading year for the business, transforming Bullwell from a two-time failure into a thriving concern. Turnover, which rose by nearly 1.1 million to 6.6 million between 2010 and 2011, continues to rise, with the latest figures putting it at 7 million. The company has seen magnificent growth and gross profits have risen from 18% to 30%. Bullwell Trailer Solutions wanted to give their customers a clearer, more detailed account of the work it does for them, to create real customer value and increase their profitability: We ve gained greater control of our costs and significantly increased our efficiency, so that we can now manage a bigger business with fewer staff. This means we can offer our customers a very cost-effective service, which is vital in a competitive market that drives down labour rates. The overall objective was for our customers to know exactly what services we were providing for them, and what it s costing. Service Director lets us provide customers with a set of KPIs and instant reports that show what they re spending with us and where. This enables us to identify where they could cut their costs. Not surprisingly, having this information on their business, and in easily understood formats, has proved extremely popular with customers. No one else out there can offer this level of detailed reporting and customers come to regard us as a partner who makes a valuable contribution to their business.

7 Making tough decisions Unfortunately, in some cases clients may be high maintenance and reluctant to renegotiate the terms of the contract. Where this situation prevails, it may be time to part company. It doesn t matter how much business is out there, turning work away is never easy to do. It can take nerves of steel to do this, but it can also free up your expensive resources to focus on where they can bring best return. Your service management solution should give you the advantage of arming you with the evidence and information you need. There may be good reasons to bid for contracts which you know from the start will generate very little profit: a contract may have particular prestige attached to it or it may extend your portfolio by taking your practice into a new market/territory. Before bidding for such work, you ll want to quantify the risks and have measures in place to contain any losses so that they don t overwhelm your business and become a bottomless pit. If you can draw on a solid foundation of knowledge of costs and time for previous similar projects, you will have a better understanding of the commitment you are making and the potential risks. With contracts of this nature, it s more important than ever to keep to the requirements set out in the SLA. Set clear expectations at the start, apply strong change control, and have a process to handle requests from the client for additional work.

8 Taking the sting out of paperwork As well as identifying which clients are affecting your profitability, you need to consider how your internal processes could be streamlined to improve efficiency, increase utilisation and reduce costs. Are you deploying your resources to best effect? Are you scrutinising how every minute is spent? Are you accurately and quickly capturing all time and expenses? And, importantly, can you do all this without diverting your team from revenue-earning activities? Keeping detailed, accurate records of time and expenses against specific jobs is vital to your profitability so that you can determine how every minute of your engineers time has contributed towards your bottom line. Non-chargeable activities, too, such as training, holidays and sickness, need careful recording, to ensure you can answer a fundamental question: Are you maximising your staff utilisation to the full? The latest range of mobile solutions, such as Service Mobile from Advanced Business Solutions, enables engineers to complete their workloads off site from their mobile device, automatically building their weekly timesheets. This feature has proved a great time-saver, as Montgomery Refrigeration points out: Engineers used to have to complete worksheets and then carry this information over onto their timesheets. The office would be full of engineers every Monday morning doing their paperwork. The fact that this is done automatically on their hand-held device as they finish a job means an efficiency saving of around 5% in this area alone.

9 Turning data into insight Having knowledge into your individual clients and business as a whole depends on being able to easily and quickly gather together real-time data from across your organisation. Gathering this information could, in itself, prove a time-consuming and expensive administrative overhead for your business. Any time spent entering data is a chore for your team and will distract them from your core work. Your business systems should remove hard-copy paperwork and automate the collection of information needed to report on your KPIs including: first time fix, SLA adherence, engineer productivity, job costing, call rates, net profit margin, stock value and customer satisfaction and retention. Service Director customer Daly Electrical explains how their new system has transformed their engineers day to day lives: We particularly like the integrated approach which will enable us for the first time to retrieve information from anywhere across the business. Until now, we have only been able to analyse the data from an efficiency or accounting angle reducing our ability to compare results. Our integrated Service Director and Exchequer system not only allows accurate return on investment calculations but ensures our projects progress can be monitored and improved.

10 Shortening the billing cycle Increasing client profitability includes being able to bill promptly and accurately. This will avoid unintentionally extending credit, while invoice accuracy minimises the queries that clients may use as a good excuse for delaying payment. Your systems should help to automate the creation and delivery of invoices, saving the many hours that can be consumed by collating and formatting information. Siclops customer Montgomery Refrigeration explains how automated billing is now an almost instant process: We ve completely eliminated the previous delay of up to three weeks. An engineer can have the job signed off on his hand-held device and we can invoice immediately and accurately, using the customer charge tables held within Siclops.

11 In conclusion... In this whitepaper, we have explained how you can drive the profitability of your business, by: Gaining an accurate understanding of the actual and potential areas of profitability within your business Quantifying the value of the work you are doing to increase or protect profit margins on existing accounts Improving your own internal processes to scrutinise how time is being spent and to uncover all job-related costs Building a body of knowledge on your jobs that leads to better informed decisions on which contracts to bid for in the future Achieving this level of control and empowering the business to be more strategic does not necessitate adding a new layer of management, increasing your administrative teams or turning your field teams into number crunchers. You should be able to depend on the service management software you use to manage your jobs to automatically generate all the information that will help you to gain greater visibility and control of your business. As our customers grow they expect us to grow as well, in capacity and in service level, Siclops allows us to do this whilst retaining a profitable business model. Mulmar, market leader in the supply, installation, maintenance and service of coffee machines.

12 Advanced Business Solutions With over 30 years experience, Advanced Business Solutions is one of the UK s leading providers of integrated field service management software including Siclops and Service Director used by service organisations and growing businesses to manage their operations, service engineers and maintenance technicians. From mobile data, call management and planned preventative maintenance, to scheduling, contract management and KPI reporting, our solutions provide instant access to real time information to optimise efficiencies, reduce time to invoice and gain unprecedented insight into the most, and least, profitable areas of your business. Advanced s integrated business critical service management solutions are used in a wide range of industry sectors including: HVAC, utilities, refrigeration, access & security, building & electrical, catering & vending, cleaning & laundry, lighting & signage, and medical & scientific. Advanced Business Solutions is part of the Advanced Computer Software Group. For further information, please contact the team: fieldservice@advancedcomputersoftware.com ServiceDirector Siclops Advanced Field Service Solutions Ltd, trading as Advanced Business Solutions and an Advanced Computer Software Group plc company. All rights reserved.