The Current Stage and Future of Field Service

Read The Service Council Perspective on Remote Service Becoming the Standard

With the current economic environment companies are viewing field service and their operations completely different than they were 10-15 years ago. Service is no longer a cost center but a profit center. Listen to John Carroll, CEO Service Council speak to how he sees the current stage of field service and what are the predictions for the future of field service and what should field service organizations look out for. The best field service management supports the overall improved effectiveness of the field service organization. 

Transcript

0:00

Welcome to Speaking of Service, the podcast that uncovers practical ways to grow service revenue, control costs, and improve customer satisfaction. If you're looking to innovate, gain a competitive edge, or just learn about the latest service trends, you've come to the right place today, Chris Wolf, VP of Strategy partnerships, welcomes back to speaking of service, John Carroll. CEO and co-founder of the Service Council to discuss the current state of field service and the trends he's seeing in the market.

Chris Wolff: 0:30

Hi folks. You're in for a real treat with me here today. John Carroll is a friend of the program. He's a friend to PTC and to me. He's been with us before talking about trends that his organization, the service council, has uncovered. Performing both primary empirical research as well as other types of stealth research that he usually only shares with his members. But he's gonna share some of those findings with us and you here today, the Service council is a membership organization of 5,000 people or 5,000 organizations. John, you'll have to keep me accurate here. He's the ceo, the founder, and the Chief Research Officer. Welcome back to speaking of Service. John. Great

John Carroll: 1:09

to see you. Likewise Wolfie and yeah, really appreciate the partnership with PTC over the years. And as we look at our community, it's we have the benefit of speaking with many of PTCs strategic customers on a day-to-day basis, cuz our community is very centered on the set of manufacturing industries, which PTC supports. Really interested to bring to bear some recent data from our research efforts

Chris Wolff: 1:32

just in silhouette. What would a typical member of the service council. Look as an organization.

John Carroll: 1:39

Yeah. We when we break down our community, we have 35,000 research panelists global, on a global basis. And from an industry perspective 75% of that audience is representative of a manufacturing or an asset centric dispatch centric business methodology. So looking under the hood of manufacturing, industrial manufacturing, high tech, medical healthcare represents some of our strength in terms of industry penetration. The other remaining 25% are B2C industries, retail, hospitality, travel and leisure airlines and some other industries. And we really like that because what we're trying to do is cross pollinate best practices and there's a lot of consumerization pressures impacting business to business sectors. So it's really good to take an outside in approach to learning from uncommon industries which share common pains and pressures. So I know

Chris Wolff: 2:34

you've just completed a major research effort. Tell us a little bit about the work that you've done and the findings that you're publishing.

John Carroll: 2:42

Yeah. Yeah. Thank you. We we do we have done a hundred be benchmark surveys over the last seven years. So it's we're never short on data and if I talk too long, just, give me the cutoff, would you? But the most recent effort we did two actually, one of which was a stealth project, which you referenced, which is really tied to an important topic around commercial services trends. So how are. Service leaders, repackaging, rethinking and ree executing on revenue initiatives. So that's an interesting stealth project. We did qualitative in nature interviews. The other is more quantitative and it's one that we've done for the last six years. It's called the service leaders Agenda. And this is a macro level survey where we gather a hundred plus service and customer support executives to tell us. What are the internal and external pressures? What are their key focus areas? What are their top investments? How are investments changing year over year? And there's some really revealing findings from a key focus perspective. This year we see a little bit of a shift. So from the years and from the period of 2018 to 2021, those four years, we always saw cost in CX customer experience initiatives as one and two. And quite honestly, they flip-flopped back and forth. And that happened year over year for a period of four years. When we went into the pandemic year, we saw a lot of organizations turn their attention towards business continuity and cost, right? So how can we control costs? When we emerged, we saw the turning to growth revenue. This year we see the continuance of growth and revenue as a top area of focus. And that's right behind performance management. There's this ongoing pressure amongst service leaders in terms of available resources, capacity, and all the things challenged by available technicians and engineers and skill sets and quality of workforce. So that's always, I think, gonna be number one. But right behind that, we see innovation in the expansion of the service portfolio followed by CX initiatives falling down a little bit, but I think it's because there's a lot of innovation efforts being taken. To align with today's customer and the future customer. So it's interesting to see the key focus areas evolve, and I can walk through some of the external pressures, trends, as well as the internal pressures and trends and those technology investments that I referenced as well.

Chris Wolff: 5:02

You've articulated a lot in that statement. It sounds to me as though the trend is towards pressure and more pressure. Pressure to indeed to grow pressure, to grow more profitably, take cost out, enhance customer service, all of which builds up to looking to innovation as to how you can do things better, differently, more effectively. How are service executives placing investment

John Carroll: 5:26

bets? Yeah, that's a great question. Great lead in and you're absolutely right. Service continues to raise its profile within the organization. The leader of the service organization is still battling its way into the boardroom discussion. And we've been talking evangelically about the maturing this industry towards making sure that service is represented at the board level and making sure service is looked at as a strategic profit lever. Cuz it should be We're still seeing, not resistance, but just a slow pace to get there fully across our membership. So there's, there mu a lot of room for growth, but as we look at the external and internal pressures that are driving some of the investments, it tells a really cool story. Not cool dire in many regards, but from an external perspective. Workforce and talent shortage continues to be the number one pressure followed by supply chain. There's some lingering challenges with respect to agility, availability of parts. So we hear a lot about nearshoring offshoring. We hear a lot about creating redundancy in the supply chain, but following that is, is the economic climate, and that's impacting we're moving from an inflationary environment to a deflationary environment. It's some weirdness in terms of these macroeconomic trends. Flipping the page and going internal. We see they're all skillset and people oriented. So we see a lack of resources. We see workforce engagement and retention being challenged still. And we see skillsets and quality deficiencies remaining. So there's a lot of focus in terms of investments on. Trying to solve some of those issues. When we look at year over year investment trends we see a number of telling stories. Frontline wages are being invested in at a greater pace. That's the number one year over year increase in terms of investment followed by training. So a very strong people orientation to the top two investment trends. That we're seeing an increase to the third is service product portfolio. So it has that continued theme of revenue innovation, tying it to the future, and customer, if you will, but right behind that technology is still a really top investment that's growing year over year at 61% of respondents. Now that's down from 2022. Because I think there's some challenges right now that organizations are facing macroeconomically. But it's still a really strong area of focus and I have some trends that sort of tells a story about new and expanded technology investments. If you'd like me to spend a couple minutes talking about that.

Chris Wolff: 8:00

Absolutely. So tell me about new and expanding technology investments.

John Carroll: 8:04

I. Sure will. Sure will. So from a new technology perspective, there's an interesting story. Really quick, the headline here is that the business of service, there's a horse race, there's a battle being be that's taking place right now. Where does the service business reside in terms of its management? Is it an e r P? Is it in crm? Is it in a best of breed service lifecycle management platform or a field service management platform? Whatever nomenclature you use. And. You'll hear in the technology investment trends that battle's gonna continue. The number one new investment amongst service leaders is field service management and service lifecycle management. We see a continued focus on the consolidation of platforms, the elimination of disparate systems, the single source of truth for service, and in more asset centric industries that are complex in nature, where you require tracking and traceability of complex assets For. All those warranty cost reduction opportunities with serialized components and sub-components and the complexity of scheduling and routing and dispatch requirements. We see a greater need for a field service management and service lifecycle management platform. So it's not shocking that's the number one new investment. Following that we see a continued focus on agile practices in the field. So mobile apps is is the number two new investment. And then behind that we see a focus on artificial intelligence and machine learning with a very pointed intention to help use those technologies to serve the purpose of creating guided workflows. So being proactive with our service executives that are on the frontline and really up-level up upskilling and re-skilling and level setting. On those available talent and skillset shortages that I just talked about on the expanded investment side, business intelligence is being expanded at a really great pace. 97% of service leaders in indicated that they'd be investing greater in business intelligence, and right behind that was knowledge management. And the number three expanded investment is crm. So that was that battle, right? We see expanded investment in crm. We see the number one new investment as s l M and field service management platforms. So where does the rubber meet the road if in, in terms of where the business of service is gonna be managed. The last technology investment trend on the expanded side is that we see a greater emphasis on contact center. Again, the contact center can be the front line of defense in many regards. Predictive maintenance activities can take place in the contact center. Remote service can take place in the contact center, and that's really lining up the customer trends with the service leader trends, we want to reduce costs. We also want to meet the customer where they want to be met. So this remote infrastructure, remote contact center support investment trend speaks volumes to that. John

Chris Wolff: 11:01

here at ptc we have a point of view about informing those downstream in the field, customer facing activities with data and information from engineering and from PLM systems to help really pinpoint and enable the best possible service, first time fix, all of those things. How how able are your members adapting? And embracing that, what we call the digital thread. I'm sure they have their own term for it, but getting your digital house in order upstream so that you can enable those downstream functions.

John Carroll: 11:35

I think it's vital. We're looking at last year's digital transformation technology trends. And there was a lot of reactive. A actually in the previous several years, pandemic infused, there was a lot of reactive technology investments that were taking place. And a lot of. What we were framing as modernization efforts, right? The digitization of different functional workflows across the organization. And what we were hearing from members was that there was a siloed approach to many of these technology investments, right? The modernization was happening in pockets and there wasn't a seamless flow for. Both the employee as well as the customer in terms of those workflows. So the customer was feeling choppiness and the experience and the employee delivering service was experiencing choppiness. In the delivery of service and support. So we've been really building some energy around moving from modernization to digital transformation. We've heard digital transformation enough by, at this point. But it, digital transformation is just all together different than modernization. We see and hear a lot of member organizations thinking about. Removing the silos that exist and to your point, threading the technology together into that single pane of glass. And there's a lot of benefits to doing so, especially in asset manufacturing industries. The knowledge that can be garnered from service delivery from service events, from work order history and customer history can be circular in terms of the design process for new products and services moving forward. So we see a big emphasis on thinking about how do we collaborate across function to think about the benefit of that data and intelligence from the asset perspective, from cradle to grave, and then circular in nature. So a lot of members are placing a big focus on that threading element that you talk

Chris Wolff: 13:27

about. That comes back to your point about making service a board level concern. What titles and what types of executives are you seeing taking the reins and helping create an enterprise focus on service as a profit center, where maybe in the past it was considered an ancillary function or a cost center even.

John Carroll: 13:47

Yeah. Yeah we're seeing more and more there, there are some C-level titles that are coming about. So we hear chief Customer Officer a little bit more commonly. We and, but sometimes that has a little bit too much of a sales slant, so we're seeing more progressive organizations that recognize service. In some instances announcing the appointment of a chief service officer. And that's a throwback to my days at Aberdeen Group, Boston based IT analyst firm. We had a, an event called the Chief Service Officer Summit, which was. Not that there were chief service officers running around, many organizations that but that by role excuse me, by title, but by role and function, there were. And the, there was a little bit of a evangelical message to that chief service officer title. I would tell you that's not happening across the board yet. There, there's still. A V or an S V P or an E V P role that's overseeing services and support. And I still think we're getting to that boardroom transition where there's gonna be a carve out of that chief service officer. But we we of course think that it's an appropriate step for many organizations to take. John, you've

Chris Wolff: 14:54

done research for years on the percentage of your members who are delivering effective reactive service, those who've crossed over to be predictive and even proactive. And the siren song has always been outcome-based standardization. What's the mix look like and how's the, are you moving the middle and where's the bulk of that membership sit today on that maturity curve?

John Carroll: 15:18

Yeah, that's a great question. So we asked that question in the service leaders agenda survey, and I can give you the data. 2022 versus 2023. We're seeing growth with respect to predictive and proactive, so year over year 2023 suggests that 45% of our responding survey takers indicated they expect to achieve predictive and proactive service in 2023. And that's a seven point increase from 38% in 2022. We see some contraction in terms of outcome-based services. Ization is a challenging road to travel. Culturally speaking, asset centric manufacturers that report. To shareholders there, there's a huge challenge with respect to financial reporting and operational strategies and the flow of goods and services and money a aligned with that good and service. It, it is a battle in terms of culturally speaking to get to outcome-based services. The trend here is that 2023 Is 20% versus 2022, which is 28%. So it's fallen down from one in four or even a little bit greater, three out of 10 to about one out of every five that ev that expect to achieve outcome-based services. And I think it's because of that reason. That's, cultural in nature. But we I think the interesting trend is that the achievement of predictive and proactive is one thing operationally. But commercially speaking, that's another thing. And so we see a lot of focus as we revisit the key focus areas on innovation, expansion of service portfolio, aligning that with customer, the future customer we see a lot of revisiting of how do you package your service, how do you standardize your service offerings how do you carve out predictive and proactive as a particular. Service level agreement that might be above your normal SLAs. And there's an intention here to carve out that commercial program, product and service that's geared towards predictive and proactive in nature. So I would say outcome-based services is achieved in pockets. Predictive and proactive service is a little bit more universal. And That would be my kind of summary. Takeaway on where we are.

Chris Wolff: 17:30

You've given your membership a grading scorecard here, give PTC a scorecard. What have we done well, in your opinion to help our services customers and professionals deliver better service? What would you look to us to be doing to keep that momentum going? I hope it's momentum.

John Carroll: 17:48

It sure is. Yeah. PTCs been on a journey in the services space for many decades now, and I think positioned in terms of all the organic and inorganic growth that PTC has taken. So there's been a journey with, AETA acquisitions io, in the iot OT space with Exta and Thingworks. There's been some Exploding product diagram acquisitions enigma. There's been some contract and warranty management acquisitions in four Cs, and you've got server logistics and all the capabilities they possessed in terms of M C A solutions and click commerce. And and now you see the coming together of the full story. And I was really excited my reaction to the acquisition of ServiceMax. Was a very positive one. Now I'm not a financial analyst, so I'll let them duke it out in terms of what was paid and what sort of valuation was achieved. But from an application to the market I think it completes the story. It's a really exciting movement. As you can tell, the number one new investment for our members is field service management and service lifecycle management systems. It does complete the story. And it, and going back to the point earlier about. Cradle to grave on assets and manufactured products and parts. It does complete the swing for PTC in many regards. So it's an interesting thing and I would give you a, I'd give you an A grade in terms of your approach to addressing the service market. You're

Chris Wolff: 19:08

kind, we appreciate that, John, we haven't talked about, the summary that you've seen of the trends from the research, both your stealth interviews as well as the empirical research you've done.

John Carroll: 19:19

Yeah, let me just summarize some of the things that we talked about today and some of the things that we're seeing service leaders double down on. I'll frame it in six key takeaways. Number one we see service continue to rise in terms of its profile. Within the organization. So there's a shift from cost center to profit center, and there's a shift in terms of where does the service leader sit within the organization? Are they a boardroom discussion participant or not? And those progressive, mature organizations are creating a pathway to the boardroom for the service leader. We see a greater definition of labor strategies. So onboarding time to value of new engineers, creating greater engagement for our existing engineers. And that's coming to fruition in the form of employee career journeys and career mapping, but it's also coming in the form of creating an effortless experience for their day-to-day. So empowering them with information and all the intelligence and knowledge that they need to be effective in the field. And then proactively supporting them with guided workflows and plugging in when and where they need help. Number three, we see a threading together of digital platforms. Modernization has happened across the organization. How do we weave these technologies together so there's no pockets in between? We eliminate redundancies and we create this threaded, single pane of glass, if you will. Lastly, we see organizations meeting customers where they want to be met. So how can we create a self-service environment that is adaptable? It's do, it doesn't put the customer into a controlled, guided, customer relationship. It's adaptable to the customer in terms of how they want to be met. And it aligns with the personalization requirements that they have with respect to how they want to seek service and support. And if they start. If their journey in a self-service environment, then go to a remote support center, then go to a dispatch centric environment. That it's seamless in nature and it isn't felt and it's not painful to be felt. And lastly, we see this movement to proactive service internally. So I talked a little bit about the employee journey and creating that effortless e experience. We see a lot of upskilling and reskilling. We see a lot of guided workflows and we see a lot of being proactive internal to the organization. Because with engagement still challenging the younger demographic and the retirement crisis. Impacting that other end of the spectrum, there's a labor capacity issue that remains doing more with less is just the everyday challenge of service leaders. So focusing on solving that is a big element of focus that we see. And then the wildcard here is that we see service leaders doing this with a much more eye towards being responsible in practice. E S G Sustainability efforts diversity, equity, inclusion, and belonging. So creating more responsible practices in all the good things that we're doing from a services standpoint. So those would be a summary of key takeaways, some of the things we talked about today, and hopefully that's useful for our members and for your listenership as we leave today's discussion. Before

Chris Wolff: 22:21

I let you go, John I'll give you the last word. Sure. But I'd love, we know each other well. Maybe there's a fun fact you wanna share with our listeners that they may not know about you or the service

John Carroll: 22:30

council. Oh goodness. All right. About me I have four children. They're the loves of my life ranging from seven to 14, two boys and two girls. They're all special. One is extra special. My son Henry is on the autism spectrum. I I've launched a a foundation called the Hope Foundation. It's H two o n pe, so it's water-based physical education, and we're establishing partnerships with the Doug Flute Foundation and others to, to host summer camps across Boston and Greater Boston. So that's something that's personal and speaks to something that I that's near and dear to my heart. The service Council an interesting thing. Our journey, we were foundationed excuse me. We were formulated as a LinkedIn business group. Wow. So we didn't just come about, we tested the hypothesis that this was a need. And I did it on my own. We grew to about a thousand members, and members started to collaborate with one another. And I'll never forget it, Larry Wash, who? By the way, at the time was the president of Global Services for Ingers. So Rand, which I believe was a PTC customer, still is asked me to make an introduction to a healthcare organization to talk about Launching a services business in LATAM at the time. And it was that point where I said, voila, we've got something here. Members want to collaborate. And and we can be that facilitator. So that's a little bit of a fun fact about the service council, our journey, a LinkedIn business group to now 5,000 members worldwide.

Chris Wolff: 23:58

John, thank you so much for sharing this information about your research. Congratulations on the growth of the Service council from a LinkedIn business group to such a worldwide membership, and particularly thank you for sharing that information from your heart, which is near and dear to many of our hearts. We'll make sure that we share the information about Your Hope Foundation on our website as we publish this podcast, and I'm sure you'll get a lot of other affiliate members from that as well. Thank you so much. I

John Carroll: 24:27

appreciate the time wolfie and I appreciate this is our second session. We've gotta take this show on the road cuz I really enjoy this. It's always great to spend time together.

Chris Wolff: 24:35

I'm up for it. Let's do it. Thanks for listening to the Speaking of Service podcast brought to you by ptc. If you enjoyed this episode, please subscribe wherever you get your podcasts and leave a rating or review. And be sure to check out other episodes to hear new perspectives on improving life for aftermarket professionals, service teams, and the customers they support. If you have a topic of interest or want to provide feedback, email us at speaking of service ptc.com. Or visit us at ptc.com/speaking of service.