David GiannettoIncreasingly, businesses are relying upon their service operation to position the entire organization for sustainable growth and profitability well into the future. But, no two companies are identical in their approaches to service delivery, even though they could use the exact same technician to fix the exact same piece of equipment. As a result, service leaders are demanding a best-of-breed technology solution that is designed specifically for their service organization’s nuanced needs and enables flexibility to perform critical tasks in different ways. IT leaders want to help the business become future-ready using a best-of-breed approach, but it can undermine their standard practice of preventing unmanageable complexity and unwarranted higher integration costs. The result: IT leaning toward picking an otherwise sub-optimal service management solution with the service software as an ancillary component of their existing Enterprise Resource Planning (ERP) system. How can service and IT leaders collaborate to adopt future-ready service management technology while meeting the ‘simplify IT’ agenda?
Contributor
Transcript
Sanjog Aul [00:00:00]:
Welcome listeners. This is Sanjog Aul, your host and the topic for conversation is How IT Leaders Can Make Service Management Future Ready. So service leaders are demanding best of breed technologies for flexibility and IT leaders want to support them and help make service management future ready too but they feel that the best of breed approach may undermine the CIO agenda of preventing unmanageable complexity and higher integration costs and thus they may try to steer away from it. So how can we best tackle such issues? How can IT and service leaders collaborate to achieve the desired outcome for the business? Joining me is David Giannetto. David is the Chief Operating Officer at Astea International, a field service management solutions company. Hello David. Thank you for joining us.
David Giannetto [00:00:53]:
Thanks for having me.
Sanjog Aul [00:00:55]:
So David, my first question will be about customer experience and as we see that it’s becoming increasingly critical for business, so what do you see as the corresponding impact that the service organizations are facing?
David Giannetto [00:01:12]:
Each of us is a consumer and we know we expect as consumers these days. So that change in consumer mindset and a focus on the we call the customer experience that has come more under focus with the rise of social media over the past 10 years never really impacted service before but as consumers on the B2C side, we now have started to bring that same mindset into the business and when we think of B2B field service management service offerings, the consumers who work in business are now expecting it on that side as well. So the consumers understand they have a lot more power and it’s no longer just the retail or B2C type environment. So in a B2B, the buyer has that same understanding now of their ability to really influence the contract terms, the service offering that a service provider presents forward, what they will and won’t pay for and the service experience and that’s a brand new thing in the service industry. The service industry has always lagged behind when it comes to things like customer satisfaction and the newer concept of customer experience.
Sanjog Aul [00:02:22]:
And with that, what other triggers? So of course we can see customers experience could be one of the triggers. What other triggers and driving forces do you see which are causing businesses to demand innovation from their service operation?
David Giannetto [00:02:37]:
I think there’s really two parts to that. There’s the external and the internal. So if you think of externally, what are the outside forces influencing them? In the US in the service world we always have this manufacturer mindset where a manufacturer who created any of the large capital assets are put in or service panels or things that make buildings intelligent. They were worried about creating assets and selling them and service was very much secondary. So that mindset has started to shift and the early adopters were the service companies that were servicing those assets created by manufacturers and they came around very quickly to understand that service is critical because their revenue wasn’t driven by manufacturing sale the asset itself but now even those manufacturing companies are starting to understand that it isn’t actually the asset that’s creating the bulk of their profit.
David Giannetto [00:03:33]:
It might still create more revenue, but not profit and therefore it’s in their best interest to not only sell the asset, but sell the, sell the service along with it and we’re seeing bundled service now with the asset in many industries and then it ties back to making sure that you give the customer what they want. So this understanding amongst manufacturers has really started to change the dynamics across the board. So there’s much more competition now from manufacturers providing service and service, traditional service providers trying to compete with them at the same time. This type of competition in some segments, it might be even already in the hyper competition phase, means that if you’re generating more revenue, it has a bigger impact on profits. You better be more effective and efficient at the service you provide.
David Giannetto [00:04:22]:
So we’re seeing a lot of requirements to take a shrinking pool of service technicians because we know a lot of younger folks graduating today aren’t aiming to be service people. So we have a shrinking pool of service people and it’s demanded that they work on an ever increasing, increasingly more complex set of assets. Though those dynamics mean that you have to look for innovative ways to help these junior technicians work on these more complicated assets. You have to think of innovative ways to get a technician, maybe an older thinking technician who’s standing by themselves in your customer’s place of business or your consumer’s home, and get them to behave in ways that they might never had to behave before, get them to think about upselling, reselling and the customer experience. So there’s a lot of forces coming together in service right now that are demanding service people think differently.
Sanjog Aul [00:05:17]:
And we talk about innovation here. So to enable such innovation in the service operations, how do you think these service leaders should go about rethinking their people and processes and say, what are the roadblocks that they should expect to encounter and finally, what would be some of the techniques that are proven and they work well in tackling them?
David Giannetto [00:05:41]:
We see in here at Astea, we work with some of the world’s best service driven organizations and what people always expect to hear as the answer to that type of question is a very standard answer. Hey, you’ve got to think of the customer experience. You’ve got to shape the customer experience, for the very first time, service people have to consciously think about what’s the experience that they want their customers to have and that is the expected answer but I can tell you, amongst the world’s best service organizations, they would answer that question very differently.
David Giannetto [00:06:14]:
They would say that the leaders have to rethink their people and process in terms of what should the customer experience be that best benefits the customer? That has a very clear set of tangible benefits as outcomes. So how do you create an experience that not only make the customer happy, that’s just the entry fee, but what is the experience that also drives revenue, drives profitability, further entrenches that customer into the service contract? How do you upgrade them, cross sell them, resell them? So they’re actively thinking about the experience that positions that customer best for those positive outcomes. It’s not just about making sure the customer SAP scores are positive at the end of this experience and there’s a lot of roadblocks when you think of a mindset change like that because you’re asking people who, who’ve never had to worry about these things, who’ve never had to proactively think about something as soft as the customer experience and factor that into their daily performance. We’re used to thinking about things like first time, fixed rate, number of miles driven windshield times, very concrete measurements in the service world and now we’re trying to get them to understand something that feels very soft to them. They’re going to have there’s a roadblock there only because they have to think differently
David Giannetto [00:07:37]:
and there’s a technique came from the marketing world called journey mapping, where you actually sit down and you chart out each interaction that you have with your customer in the physical or digital world and map them out and reflect what the customer’s ideal journey is. Then when you have that, you can then manipulate that or change that to create what is the preferred journey and that’s the process that, some of the world’s best service organizations are going through to drive these outcomes that they’re really after.
Sanjog Aul [00:08:08]:
Let’s take a quick break listeners. We’ll be right back and let’s talk about the best of breed technology solutions which actually should be the best thing that could happen to service operations and if they can deploy it, then that could really help them do what they want to do but still we find that IT leaders always seem to steer away from them. So what is going on? What’s the reason behind it. Let’s discuss this more when we come back, so please stay tuned.
Sanjog Aul [00:09:29]:
Welcome back. David why do you think the IT leaders always seem to steer away from the best of breed technology solutions, even though that is the optimal approach, in fact, to delivering what the business wants when it comes to service operations, innovation, et cetera?
David Giannetto [00:09:49]:
I’m sure there’s a lot of different reasons. At the heart of it is a relatively conservative approach that IT leaders take nearly all the time. They’re always going to choose for what is the safer bet, what they believe and they do believe it, what they believe represents the simplest architecture and I would agree with that mindset. So if you give them two options, they’re always going to choose what seems like the more conservative, the simpler and that’s because there’s a lot of mistakes that can be made in IT and those mistakes come with a negative impact on IT leaders. So for many decades now, there’s been this inherently conservative approach to software selection throughout large enterprises.
David Giannetto [00:10:36]:
At the same time you have this looming concern over integration. How do you get applications, especially enterprise level applications like we’re talking about talking to each other, sharing information, what’s the expense to that, how long does it take, clearly it’s a requirement. So if you’re going to go with a best of breed approach, then integration naturally flows into the conversation and they’re going to want to avoid that. Whereas a business person doesn’t really care about that. What they care about is what software meets my needs best. They’re always going to lean in the opposite direction towards something that has deep, rich, robust functionality that helps them achieve their objectives because if the business leaders don’t achieve their business objectives, they’re certainly going to be let go and fired. So you have two different mindsets in going on in the organization
David Giannetto [00:11:25]:
and if integration is considered a mystery, if it’s not part of the DNA of an organization, then they get very leery of it or scared from it but the world’s best service organizations, I think, understand that integration is just part of what makes businesses today work and IT leaders understand that as well.
Sanjog Aul [00:11:44]:
And if you’re not using best of breed, the only other option left is the bolt on solutions and that may in fact in some cases help the IT leaders address a few issues but what do you see is the risk or what are the risks, multiple risks and pitfalls if they go that route when they’re attempting to do the same thing, with service management to boost service management capabilities.
David Giannetto [00:12:11]:
Every business out there, whether it’s the Astea here making enterprise level field service software, a company providing service, even a retailer, every business out there is trying to understand what are the ways that we generate revenue, what are the things that drive profitability, what are the things that make our customers happy and how do we maximize those things and the ability to maximize performance in those areas is always going to be delivered best through what you think of as best of breed solutions. That’s what they are inherently designed to do. If an organization is an ERP vendor, for example, that’s where the lion’s share of their revenue comes from. So therefore that’s where they’re going to put the majority of their RnD. That’s where they’re going to put the focus on revenue drivers, profit drivers and making sure the customer really likes that part of the application and second tier sections like a bolt on service solution always are going to be underdeveloped if you compare them to the development that’s done within a best of breed applications. So you are not just trading functionality and that’s the go to thought process.
David Giannetto [00:13:20]:
We’re going to have less functionality, but what you’re really trading is once you modernize, you take that next step, you upgrade to a modern field service application. Whether it’s best of breed or bolt on, what you’re really losing is the ability to then engage in what’s called digital transformation, which is the next step and to be more competitive down the road and that’s a risk, but it doesn’t feel real intangible. So a lot of times it’ll allow people to lean back towards just staying in a stack shop. Let’s keep this as simple as possible. There might be some other things we need to do someday, but that risk doesn’t feel real. Although do we see the reality of it every day?
Sanjog Aul [00:14:01]:
So what shift in mindset, leadership style and the level of collaboration do we need? What is that requirement between service and IT leadership so that they make the right choices, whether it is what type of technology solution do they use and with an end goal that the service management becomes future ready.
David Giannetto [00:14:26]:
It’s interesting because the real impact of cloud has been the outsourcing of IT. So if you’re moving into, if you’re becoming a cloud organization where all of your applications or platforms are pushed into the cloud, then within the IT department suddenly there is just much less need to understand how those applications work. All those people are gone because you’ve essentially outsourced that onto your cloud providers. So what the cloud has done has really shifted what IT’s role is within the organization and turn them into really advisors to the business. They have to be able to speak to business objectives much more than ever before because their main value proposition now is to help business leaders achieve business objectives and the cloud had a surprising impact on forcing that shift in mentality and in my opinion, it’s been a good one because the things that make a company thrive and successful are the ability to achieve business objectives. IT is always an expense.
David Giannetto [00:15:29]:
Even if it’s an enabler and enabler with efficiency, in a lot of ways it’s still an expense. You really have to focus on what you’re going to get out of it. So if an organization is shifting towards that mindset within the IT department and IT leadership, I think that they’re going to be inherently more willing to sit down with business leaders and say, look, what do you need to accomplish to make this organization successful and then you can really stretch out that timeline to say, okay, where do you need to be now? Where do you need to be in two, three years and then four and five years because I see leadership is really good at thinking of the future, maybe more so than business folks are who are caught up in the churn day in and day out, especially service leaders when they have a daily mindset built into the service activity. So IT can be a really good influence on getting them to pick their eyes up, look down the road, not just where they are today and what’s the natural next step of that, but what are the things that they’re going to have to do in the future to compete and that’s part of the changing mindset of a lot of more progressive IT thinkers now who are really here to serve the business perhaps the first time.
Sanjog Aul [00:16:41]:
Once again, thank you David for sharing your thoughts and insights about how IT leaders can make service management future ready.
David Giannetto [00:16:48]:
Thank you. Thanks for having me.
Sanjog Aul [00:16:50]:
And listeners, I invite you to find related conversations on our website at ciotalknetwork.com.
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