Service Technology Investments:Building the Case

Service Technology Investments: Building the Case Mike Woodard [email_address] 610.742.4701

Service Technology Investments

My objective

Educate - Validate

Create an appetite for action

Your expectations?

My background

Strategy Development – Service Consultant

IKON Office Solutions – 20 years; VP Service, North America; VP Service Strategy; VP Service Operations

Xerox Corporation – 18 years; District Service Manager, Financial Planning & Analysis Manger, Field Service Manager, Customer Service Technician.

Today’s most *beneficial technologies

Mobile Field Service – work order management, dispatch, parts management, real time data access, signature capture, communications

Scheduling and Routing

Remote Product Monitoring

Forecasting & Planning

Business Intelligence

* productivity enhancing

Service Technology Solutions

SMB Service Industry research

Best-in-class service organizations (top 20%)

55% already made technology purchases

17% more will invest in next 12 months

More than twice as likely as all others to have embraced technology solutions – 55% vs 24%

Almost twice as likely to be using a mobile service solution

Mobile service solution

$10 avg reduction in cost per dispatch event

12% increase in service profitability

Today’s climate

“ A stiff investment headwind with opportunity at hand”

So, how do you make a convincing argument to justify the required the required dollar investment?

Generate a formal business case

Moment of truth – now is the time to act………

Narrow sighted organizations will cut IT budgets to “get through the hard times”.

Visionary organizations will invest in technologies that make sense and support goals of managing cost and preparing for long-term demand from customers.

What is a formal business case?

A formal business case is a written document that enables management to determine if a proposed project is of value to the business and objectively measures the business case’s benefits.

Business case components

Background

Project description

Expected business benefits

Costs

ROI

Risks

“ Do nothing” option

Business case components - example

Background of the project - increase in low touch product base presents opportunity to move away from 100% assigned territories and optimize resource utilization.

Project description - implement a service “location intelligence” solution to optimize technician utilization through automated scheduling and routing

Expected business benefits

Reduced response time (improved customer sat)

Increased tech productivity (reduced cost)

Reduced business miles (reduced cost)

Business case components – example cont’d

Costs

Software purchase/user fees/maintenance

IT support

Training

Hardware

ROI – Net Benefit over defined time period

Risks

Employee backlash (GPS, change, job satisfaction)

Customer dissatisfaction with loss of assigned technicians

Financial (cost reduction benefits not realized)

“ Do nothing option” - lost opportunities (cost reduction, competitive differentiation)

An Actual Business Case

Project Background

5,000 service technicians – assigned territories, specialized

300 field service managers

3 customer call centers

18,000 customer facing events per day

Double digit productivity improvement – prior 4 years

Growing price pressure

Increasing margin pressure

Competition starting to invest in mobile service solutions

Imperative – differentiate and add value

Reality – reluctance to invest in service

Imperative - maintain or improve service margins

Reality – increased productivity is biggest margin lever

Project Background

Productivity Busters

Paperwork Time

Daily Call Logs

Customer receipts

Daily time sheets

Mileage reporting

Asset inventory management

Phone Time

Technician

Call Center

Data & Information Acquisition Time

Parts availability

Service histories

Technical knowledge base

Customer entitlements

Project Description

Mobile Service Solution – project goals

Equip all field technicians with state-of-the-art wireless application/hardware technology to increase productivity and improve customer satisfaction

Provide technicians with real-time access to business-critical data

Use new technology to support multiple uses: streamline dispatch calls, call de-briefing, inventory control, time automation, point of service sales and field communication functions

Business Benefits

Target Benefits (Benefits in red were quantified in Business Case)

Technicians/Dispatchers productivity gains – Reduced Telephone Transactions and Time

Reduction in telecommunications, Alpha Pager & dispatch software costs

Elimination of over 5 million documents (annual amount) and the time to administer them

Timely and accurate T&M Billing

Tech access to technical knowledge base – internal and external

Reduce purchases of books and technical publications

Broader, more accurate/timely visibility to available parts inventory

Improved Car Stock Accuracy

Improved First Call Effectiveness – know before you go

Reduced number of data entry errors

Improve meter read reporting accuracy and related Service billing

Business Benefits

Target Benefits (Cont’d)

Capture sales opportunities / competitive intelligence, communicate to Sales

Improve field management – Remote access & managing team activities

Comply with SOX requirements for document retention

Establish technical infrastructure/framework for future wireless users (sales, ops)

Increase communication effectiveness

Improve customer satisfaction & retention – view to critical account information

Real time capture & update of changes in account info (Address, Key Operator, Meter Admin)

Simplified / Automated Workflow (ie Payroll Time reporting)

Reduced Hardware Expense (Leverage one device for both Dispatch Device and Laptop Device)

Business Case Highlights

$30M+ investment over 5 years

12% service tech productivity opportunity

15% call center productivity opportunity

20 month ROI

But, is this business case relevant to a typical dealer service organization?

Business Case Detail – Business Factors

Business Case Detail – Savings Opportunity

Business Case Detail – Solutions Cost

Cost & Net Financial Benefit Schedule

Cost & Net Financial Benefit Schedule

Building a business case - lessons learned

Benchmark your technology solution against the competition

Brainstorm potential benefits and savings

Engage finance leadership early on

Make your IT department your new best friend

Identify and fully engage cross functional stakeholders

Build a conservative business case

No need to reinvent the wheel

Building a business case – key points

Business case generation should not be viewed as a mechanical exercise – the case must demonstrate that:

issues have been thought through

benefits are realistic and attainable

technical aspects have been evaluated and costed

outcomes will be tracked and evaluated to determine success

A sound business case is the foundation of any project charter; without it, there is no valid argument to justify the project.

What I do for companies……

I help companies optimize all aspects of their service operations by advising them on critical success factors:

Target service metrics and goals

Performance management

Technology application

Service growth strategies

Compensation and incentive plans

I also provide Leadership & Management training designed for the service professional.

Service Technology Investments Questions?

Service Technology Investments Thank You! Mike Woodard [email_address] www.strategydevelopment.org Blog: http://strategydevlopmentinc.blogspot.com 610.742.4701