In my earlier article, “Field Services Is Dead. Long Live (Digital) Field Services“, I made a case for why machinery companies must continue down the digital transformation path, away from the traditional field services execution model. In this follow-up article, I explore the options available for companies that choose to do so.
Uberisation and why it is not the answer
Some experts support a Uber-like “gig-worker” field-service model to respond to Covid-19 lockdowns. This would involve companies outsourcing the delivery of physical repairs to freelancers. While this might work for B2C equipment, where repair/service needs are infrequent, in the B2B world where larger sums are involved and demand for services is concentrated by fewer customers, the dynamics are very different. Here are some challenges that will hold this trend in check:
- Certification and compliance: Managing a global franchise of certified experts is a challenging undertaking. Today, large machinery OEMs already work with dealers whose service staff are trained by the OEMs. Even in such situations, OEM’s prefer to retain critical know-how within their own companies.
- Disintermediation: Once the relationship and trust between the customer and the service provider is established, the rationale to pay the OEM a margin for the service of dispatching this gig worker becomes limited. This is especially true in the absence of proper warranty and liability handling. The OEM will eventually be reduced to playing the role of a parts supplier, eventually losing a large portion of the service revenue.
- Liability transfer: Who is liable if a gig worker’s intervention results in deteriorating the performance of the machine or even worse, causes an accident? The customers of Uber and Airbnb users who faced bad experiences and the way some of these cases were handled point to the challenges that this model presents.
- Protecting the spare parts business: In certain cases, a Uber-like model puts revenues from certain high volume spare parts at risk.
All of the above means that the gig-worker model in the industrial B2B context will be limited to simple service interventions at best and it remains to be seen if these interventions solve enough of a problem for plant operators and generate enough business for gig-workers to make it worthwhile.
Digitalising field services – the options
Not all field service interventions can be conducted remotely. However, a majority would benefit from a strong remote component, delivered digitally. Here are 2 capabilities that will play a key role.
Remote monitoring isn’t new and many in the industry are already familiar with the technology. However, the emergence of devices like RaspberryPi’s and Arduino computers makes it possible now for most companies to adopt these technologies at a fraction of the cost compared to a few years ago. Monitoring data from connected machines and making sure that pertinent alarms are triggered and spur the appropriate responses, performed either by customer maintenance teams or by field service personnel is the critical success factor for remote monitoring to succeed. Often, this approach yields a significant decrease in service visits that are related to inspections and for scheduled service work such as oil changes and bearing replacements, etc. Customers are also happier to not have to change parts before it becomes necessary, and as a result avoid maintenance related shutdowns.
Remote mentoring over video conferencing solutions was heavily utilised during the lockdown as an alternative to service visits. Many companies were also able to finally showcase the use of smart-glasses beyond trade fairs into actual remote-customer-support use cases. Initial feedback for features like augmented reality have been mixed, with the customers that we spoke to complaining that the annotations and 3D projections on their glasses being more a source of confusion than help, but what is clear is that customers are definitely interested in solving more emergency situations over video calls instead of waiting for a service engineer to visit their site to diagnose and fix issues.
The important issues to address before scaling up
Monetizing the outcomes instead of the process: Restructuring service contracts to monetize outcomes instead of recouping travel costs will become necessary to make this shift, but profits and profitability will both rise as a result. What’s more, the time is ripe to propose such models. Most customers would gladly avoid bringing infections into their plant via a travelling service engineer. The assurance that they can enjoy a comparable equipment availability at lower overall costs is a very attractive proposition for manufacturers who are themselves faced with the uncertainty of recessions.
Address liability and warranty protection at the outset: This is perhaps the most important issue to address for customers. When a customer employee physically manipulates a machine, even with the remote assistance and advice of an expert from the machinery supplier, the verbiage in most warranty contracts would void the warranty. This needs to change. However, there is also a need for video calling solutions to integrate better with the service software of the supplier as well as the maintenance software of the customer so that both parties maintain an independent copy of a video recording, duly time-stamped as well as tagged with metadata that enables such remote assistance interventions to be potentially reusable.
Integrate or interface technical support and field service processes: A field service engineer is simply a technical support engineer who travels to the customer site. However, FSE jobs are more stressful due to travel and historically had to be managed locally, creating knowledge silos. The hardest challenge with field service management has been up-skilling and resilience against higher levels of employee churn. Integrating or interfacing the 2 teams more tightly will become necessary to solve customer problems on the field more efficiently and effectively.
With the Covid-19 induced recession and the subsequent costs consolidations that will inevitably happen, there is a massive opportunity for machinery companies to rethink the value of what they deliver as not muscle but brain cells, not time spent but outcomes achieved and the time is ripe to make these business model shifts. However, even without innovative service contracts, simply adopting an hourly billing system for video calls that can be metered and invoiced transparently will be a good place to test customer acceptance before bigger changes are implemented, provided warranty issues can be addressed upfront.