Service enterprises and their challenges are diverse. Their solutions will not be a one size fits all technology.
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In our last article we discussed that there are very diverse business needs today, especially for service enterprises that require technology solutions. In fact, the service enterprise has unique needs that may not be served by traditional ERP vendors.
Functionality: What to Look For
Services can be distinct processes performed by dedicated teams within an enterprise or by an independent service enterprise. They can be focused on B2B/industrial markets or consumer-oriented services. In addition, products, their reliability, customers’ willingness to pay and so on mean there are quite diverse requirements within the service market. Users can purchase discrete domain solutions or large suites. But even suites are not an ERP. Thus, the emergence of ERPs for services. With this in mind, as you look at Figure 1, realize that you may not need everything highlighted in it.
Figure 1 is aligned by domain solutions which may define their ‘whole solution’ uniquely. We have also attempted to define a domain that is uniquely for customers. Of course, many customers have their own maintenance teams so they may also require service/repair and reliability modules.
Figure 1: Service Management Domain View of Solutions Landscape
Suite footprints are getting more inclusive and they center on service life cycle, the technician, or the ERP. In the past, technology buyers were more focused on domains, but that is changing. Rich integrated suites were not available—and now they are. In addition, cloud and mobile technology as well as the expanded business models of many firms who now want to incorporate service functions are driving a lot of action in the market. (Read: Changing the Game in Industrial Distribution in this issue of the brief.)
Managing the Total Life Cycle
It is critical for manufacturers to have end-to-end data about their products; thus, the concept of Total or Service Life Cycle Management (SLM or SLCM). SLM is integration of product reliability, service requirements and cost information from product design through the service life of the product. A platform including PLM, CAD/CAM, and Quality through Service allows all the parties to support one another’s work. Today, knowledge management and 3D graphics allow both ends of a process to see products and parts with precision. As well, service workers can learn about the products directly from the designers.
Different industries have developed advanced approaches for success (best practices) such as Reliability Centered Maintenance (RCM). RCM was originally developed to help airlines create maintenance programs for new types of aircraft before they entered service. It has been proven in developing maintenance programs for complex equipment and is much more effective than traditional trial and error approaches.
Firms also need to be as predictive as possible about the parts required for their new products. Hence, part planning and optimization are essential. Using failure pattern and consequence analysis, industries, especially those that require the highest standards in safety such as aerospace and defense, ships, automotive, medical devices, telecommunications and so on, have developed tightly focused maintenance procedures that improve operating performance by ensuring that the most effective forms of maintenance are selected for each asset. Lifetime maintenance data then feeds the product development processes to produce improved next-generation products.
Support for the Technician
At the heart of service is the technician who performs the services. Having the right person on the job and making them as productive as possible can mean the difference between customer satisfaction and profit—or not.
Technicians span a large range of products (from those requiring the highest certifications to the mundane home appliance) and may drive to customers in the next town or venture to remote locations to perform their role. Field Service Technician solutions can support a staff of technicians or an independent contractor.
Independent contractors often focus just on mobile apps and forget the importance of a pricing and accounting solution. Or they may use QuickBooks which is not geared to the service business. Accurate billing is a big deal for any business, but can be a real burden for the small player. Often, they have complex relationships with the OEM that need to be managed. Even with a modest list of customers, these activities are not well managed on spreadsheets. Self-service applications can help the service provider to schedule appointments and reduce the workload by having customers directly take care of small tasks such as re-ordering supplies.
The ERP for the Field Services Enterprise
The enterprise that is dedicated to service looks different than other enterprises such as wholesalers or manufacturers, though these types of firms may have divisions that are dedicated to service management. Besides the typical essential field service functions such as logistics and parts planning, an ERP has finance and human resources (all core to any ERP), but these need to be specifically tailored to the service enterprise.
Figure 2 highlights some key functions and features that differentiate an ERP for the Service Enterprise from other vertical ERP solutions.
Human Resources Management
Contains all personnel functions (payroll, benefits, etc.), but specific to Field Service: the module needs skills management, including the applicant assessment process to ensure that the skilled worker is hired; ongoing training and certification; and metrics to assess the employee’s performance. Service functions should focus on ensuring that the employee is not only capability of doing the job, but also that the customer’s feedback validates it. Performance management analytics for time, costs, other services aspects, and compensation should be linked to these assessment functions.
Matching, assigning, scheduling and tracking technicians to work orders.
Core areas in service are warranty management; determining the costs of services; and performance-based logistics, which requires creating a long-term model to ensure that product and parts costs are recovered for the term of the performance contract. (You can read about this concept in the Outcome Economy.)
Manufacturers that rely on their channels to service their products need to manage their channel relationships to ensure the best possible outcomes for all parties. A channel module, then, should include: Partner Relationship Management, parts planning, certification and training, inventory management, and search.
Figure 2: The Service Enterprise Requirements
Manufacturers may have a set of channel partners who stock, sell, and/or service products. Customers seeking services may be directed to the customer site by the product company or, more and more today, may search for a certified provider. Searches of either the manufacturer's or third-party sites (i.e. Angie’s List) should yield a capable, certified service technician.
Managing inventory is core in these relationships to ensure that end-customers’ needs are met and that the right level of inventory is maintained across all the channel partners.
So the next obvious question is: On premise or cloud? Many mature manufacturers still have home-grown solutions for core functions on premise. But even these firms have web-based service for customers, as well as mobile apps for service logistics and technicians.
Most of the emerging ERP for the Service Enterprise are being released on the cloud and, of course, this makes the most sense since the interrelationships between partners and the relationships with customers are best managed on the web. However, tech companies will give the buyers what they want—most will not walk away from an on premise deal.1
Like any technology decision, knowing who you are and what you need is essential. Service users often overshoot (buy more than they need) or low-ball requirements (in the zeal to keep costs down and project times tight) when acquiring technology. SaaS approaches really help here, since users can look to platforms where they can start at the appropriate level of need and then grow as needed in accordance with their own timing and budget.
In this series, we will also explore the role of IoT in services, as well as look at the provider market and address cloud vs. on premise solution providers.
1 However, there are some cloud-only providers, so buyers should be clear about these needs early on in the process. In the next article we will discuss on-premise vs. cloud players. -- Return to article text above
To view other articles from this issue of the brief, click here.