In case you missed it, the Syncron team is here at Field Service USA 2018 live blogging some of the keynotes, panels, and breakout sessions throughout the event. This morning we heard from a powerful lineup of thought leaders discussing the transformation of service models from selling a product to selling an outcome.
Next up, we’re taking a deeper dive on outcome-based service models with Hitachi and Microsoft. Michael Mendoza, Field Service Practice Lead at Hitachi Solutions America, and Ben Vollmer, Global Field Service Lead at Microsoft are walking us through lessons learned from real-world customers, with strategies for the people, processes and technology needed for success.
When it comes to an outcome-based service model, it only makes sense to break the change down into digestible stages for your organization. Here are we’re counting down the checklists from top to bottom:
6 Stages of Everything as a Service
You can’t just start offering everything as outcome-based out of the blue – there are logical stages of making this transition within your organization:
- Product and Spares
- Static Maintenance and Service Contracts
- Dynamic Monitoring and Condition-based Contracts
- Performance-based Service Contracts
- Product Ownership at Supplier Level
5 Shifts from a Customer View
Your customers need help with this transition to an outcome-based service model, too. Here are five ways to make that shift smoothly:
- Create SLAs based on response time.
- Delegate change management for the transition.
- Practice proactive support – moving from break-fix to uptime.
- Offer uptime as a service.
- Figure out new internal priorities.
4 Steps in Starting Your Journey
So, now that you’ve prepared your products and your customers for an outcome-based service shift, here’s where you should begin the change:
- Assess where your organization is in your journey.
- Gain participation of the right stakeholders.
- Define internal and external desired outcomes.
- Start smart, and start small.
3 Keys to Success
The keys to success are simple: improve efficiency, enable innovation and ultimately, transform your business. But how?
- Improve efficiency: Connect disparate line-of-business assets to automate and improve business processes. Monitor and track the health of your assets to reduce costs. Collect and secure large amounts of data from your assets in the cloud for future analysis.
- Enable innovation: Analyze data from multiple sources in real-time to drive revenue. Apply historical data to new problems to successfully predict future behavior and trends. Create operational intelligence to improve performance and decision-making.
- Transform your business: Convert the raw data from your “things” into actionable insights and business results. Create new insights for the right people in your company to access easily. Leverage advanced analytics to create new business models and revenue streams.
2 Models of Metrics
Now that you’ve defined your goals and started your journey toward an outcome-based service model, there are two important metrics to consider: both internal and external. Figure out and align:
- How to get internal buy-in, and
- How to price outcome-based service externally.
1 Rule to Outcome-Based Service
The one ultimate rule in making a transition to outcome-based service successful: Get real.
Apply it where it makes sense – these technologies aren’t one-size-fits-all, and in some situations, there may be no benefit to changing. Don’t give up on best practices – regardless of technology, follow processes for successful deliver and focus on change management for driving adoption. And finally, plan for the long term – technology is improving every day, so you need to find the process that provides the most value in the long run.
So, how can you get started today? Start smart, and start small. Get technician and customer feedback from the field and customer demand reports. Pilot small groups of users to provide valid feedback to your team. Pilot focused processes that best fit your organizations overall future needs.
In today’s changing world, product advancements alone will not enable you to gain or sustain the competitive differentiation needed to ensure long term financial performance. Shifting from a product-led growth strategy – which has sustained OEMs for many decades – to a outcome-based, service-led growth strategy will require OEMs to embrace change, think differently, act differently, and embrace technology to completely transform their after-sales service functions.
Stay with us as we continue to live-stream the content from Field Service USA, and make sure to follow us in the app and on social to get the full event experience!