Shifting from Cost to Profit in Field Service
March 16, 2016
Overhead. No one wants their department to be considered overhead.
Most service centers at both large and small organizations operate at minimal profit margins, if not as cost centers. During economic downturns, cost centers are generally the first departments to be heavily scrutinized. This leads to unhappy execs, managers and department employees. Many company executives want to change this system and have tasked IT and field service managers with finding ways to reduce costs and make their departments profitable.
“To win in the marketplace you must first win in the workplace.” – Doug Conant
With more field service managers tied to their own profit and loss statements (P&Ls), leadership is tasked with finding new ways of boosting productivity, increasing efficiency, reducing costs, measuring performance and most importantly, increasing customer satisfaction.
The two most obvious tactics are to reduce costs and create revenue.
First, identify the employees in your department who can help strategize this shift. Because of their time spent in the field, engineers will possess expertise in streamlining processes, especially repeatable ones, reducing time spent on jobs, optimizing operations such as routes and scheduling, identifying what services customers are most likely to add when upsold, etc. In-house employees may have insight into which supplier contracts can be renegotiated or where unnecessary spending occurs.
Mobile applications have helped countless organizations improve operational processes to reduce truck roll, fleet maintenance and fuel expenditures, reduce excess labor, optimize company device management and leverage product connectivity to reduce costs. These improvements can also help mitigate a lot of dissatisfaction for both the customer and the field service employee.
Your employees also likely have a good idea of what revenue opportunities make the most sense for your department. Servitization is emerging as a popular revenue stream. Rather than adding on maintenance packages as part of a traditional purchase, manufacturers are now creating products that rely on necessary, ongoing service packages to increase service center profitability. Task your team with brainstorming what a servitization offer could look like.
Integrating a CRM with field service management software solutions can help service departments track customer service information, determine possible upsells, manage communication and more.
There is a third component to creating a profit center that shouldn’t be overlooked: your department’s goals must align with the company’s overall business strategy. Does your departments’ work support the company goals? How do you empower each member of your department to think in terms of what is best for the customer and for the company?
Engineers must become less transactional and more consultative. This places greater importance on engineers with soft customer service skills in addition to technical skills needed to complete a job. Hiring practices may need to shift in order to ensure engineers in the field have solid problem-solving skills as well as savvy sales skills.
Training programs can get department employees on the same page, especially customer-facing employees with the skills necessary to become better stewards of the company’s brand and reputation. A field service management system can be instrumental in rolling out new training modules, especially to those employees in the field who need readily available product information, sales tactics and materials.
No matter the role, everyone can positively impact a company’s success. The good news is that most employees want to know that their contributions matter to the company’s top line revenue and bottom line savings. Receiving buy-in from them isn’t likely to be difficult. As a manager, your job will be ensuring your talent has the tools they need in order to affect change.
Published March 16, 2016