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With 9 out of 10 service and support organizations utilizing third-party service providers to deliver some or all their field service operations, the days of relying on direct field service engineers are gone. While outsourcing field service engineers has always been with us, the reasons for doing so are changing. The need to reduce costs is being supplanted by the need to support service revenue growth.
Based on data collected from the TSIA Field Services Benchmark, here are the primary reasons organizations outsource their field service labor, broken down by priority.
So, the effective use of partners in field service is now a critical capability for all equipment manufacturers. As organizations incorporate new partners into their service delivery operations, most assume that:
Unfortunately, none of the three assumptions are supported by data. All things being equal, organizations that outsource full field service operations have significantly lower NPS (Net Promoter Score) and renewal rates, the cost per outsourced incident is equivalent, and it takes a lot of effort!
Successfully working with an outsourced field service provider requires effective contracts and ongoing management in order to ensure a seamless and satisfying relationship from both sides, as well as for the customer. To effectively implement and manage the outsourced delivery of field services, organizations need to focus on four major enablers:
An organization should have a documented strategy with goals, regular tracking, and reporting to management. In addition, senior management participation is crucial to the ongoing success of the relationship. Regular business reviews of the results, operational metrics and financial results of an outsourcer at an executive level are indicative of an engaged sponsor.
The agreement with the outsourcer provides a strong framework for a positive relationship. In particular, it defines Service Level Agreements (SLAs) for customer activities and it ties the achievement of those targets to the payment terms.
The organization provides the outsourcer in-depth knowledge of the product and service required to successfully service end-customers.
While a strong outsourcing agreement provides a framework for a positive relationship, it is the ongoing management that makes it work.
At our upcoming TSW conference, taking place in San Diego, May 4-6, I will utilize the Field Service Benchmark and our TSIA Operational Best Practice Criteria to provide insights on:
There’s still time to register. I hope to see you there!
Post Date: March 10, 2020
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Vele Galovski is vice president of support and field services research for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement.
The Technology Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.