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Best-in-Class Service Organizations

19 Feb, 2010 By: Mike Woodard imageSource

Best-in-Class Service Organizations

With today’s industry benchmark models, you have a pretty good idea of what
“good” looks like relative to critical service performance metrics. Consider the

  • 52% + service GP
  • 82% FCE
  • 7.2 hrs technician productive time/day
  • 4.1 net calls per day/tech
  • $200K annualized revenue/tech

But what does a “great” service organization look like?  Recent research
conducted by the Aberdeen Group indicates that Best-in-Class (top 20%) of
service organizations within the field service industry as a whole deliver the
following performance results:

  • 88% Customer satisfaction rates
  • 60% service profitability
  • 81% first-time-fix rate
  • 15% increase in workforce productivity over the last 12 months

So what does a “great” service organization look like in our particular
industry?  First, let’s look at the definition of the word great: notable,
remarkable, exceptionally outstanding. Over my 35+ years in the industry I have
had the opportunity to work with, manage, lead, and advise hundreds of service
organizations throughout North America, and based on my experiences and
observations, the following is what I deem to be the common attributes of
outstanding or great service organizations:

A great service organization has a service leader that’s an effective
business manager & leader.

  • Understands the big picture – doesn’t view everything thru the service

    Never viewed as a member of the “sales prevention team.”
  • Contributes to the leadership and growth of the company as a member of
    the senior management team.
  • Works with sales to develop growth strategies that increase combined
    return on sales and vol (images) growth.
  • Viewed as a credible leader – trustworthy & competent.
  • Inspires and motivates; paints the picture where the organization is,
    where they’re headed, and how they are to get there.
  • Customer focused & passionate about continuous improvement.

A great service organization places an intense focus on the customer

  • Utilizes multiple listening posts to capture the voice of the customer

    > Customer survey 

    > Post installation follow-up

    > Random post service call survey

    > Key account reviews

    > Service manager customer visits

  • Monitors & manages SLA compliance
  • Customer issue resolution is institutionalized
  • Manages customer expectations
  • Designs & improves service processes with the customer experience in

A great service organization is constantly seeking out & implementing
“best practices.”

  • Networks through industry dealer groups: BTA, CDA, BPCA, etc.,
    manufacturer sponsored groups, management systems user groups, etc.
  • Participates in service industry professional groups & events–SSPA,
    AFSMi, etc.
  • Subscribes to industry publications and research offerings
  • Looks for service best practices outside of office technology industry

    > Technology application: location intelligence, knowledge mgmt., help desk

    > Business practices: compensation, vehicle use reimbursement, fleet
    management, performance management, etc.

A great service organization invests in training & development

  • New employee orientation
  • Technical training – a given
  • Customer skills training – all customer contact employees
  • Interactive skills training – all employees
  • Management training & development   

    > Manager candidate development – experiential based

    > New service manager training  - basic leadership & functional skills

    > Time management – critical

    > Advanced training – never ending
  •    Encourages and enables continuous education – provides
    tuition reimbursement

A great service organization has 90% of the oars in the water with all the
boats headed in the same direction (provides a positive and productive work

  • Multiple avenues of internal communication are utilized
  • Employee empowerment and involvement is real
  • Service has a vision aligned with the company’s vision – employees know
    where the organization is, where it needs to go, and how it’s going to get
  • Performance Management process is in place – coaching, goal setting,
    appraisal, merit pay plan
  • The garden gets weeded when needed – slackers and cynics are managed out
    of the business
  • Recognition goes beyond tangible rewards
  • Success is celebrated

A great service organization puts a laser focus on service margin
improvement that is sustainable and contributes to the company’s bottom line.

  • Takes a bottoms-up approach to productivity & cost analysis and
    management - individual, team, branch, company – machine model, serial
  • Utilizes industry benchmarking data to optimize productivity & cost;
    knows not only where they stand but determines where they should be and how
    they’re going to get there

    > Knows how many techs they need to support their base (at benchmark service
    effectiveness and machine performance)

    > Knows what their parts spend should be (at benchmark service effectiveness
    and machine performance)

  •  On-going performance management in place – individual and

    > FCE – recalls (service effectiveness), incomplete for parts (inventory

    > Equipment performance – cost / reliability

In a great service organization, service is viewed and treated as a
company core competency.

  • Quality of service is understood by all to be a critical success factor
  • Service leader is member of senior leadership team
  • Service employees are recognized and rewarded for their contribution
  • Service reputation and quality is sold as a differentiator
  • Value of service is sold vs. price

A great service organization takes a proactive approach to adopting
technology solutions.

  • Takes initiative in researching leading technology solutions aimed at
    improving operations and customer experience
  • Engages company stakeholders early on in technology application
  • Makes recommendations and builds compelling business case to justify
    investment – quantifies R.O.I.

A great service organization actively embraces revenue growth initiatives
& opportunities.

  • Understands the critical role service plays in customer retention – the
    foundation of revenue growth
  • Takes initiative to prepare service organization for new market entries
    – some even lead & manage the programs

    > Managed Print Services

    > Professional Services

Constantly looking over the horizon for adjacent, emerging opportunities to
leverage service core competency Do best-in-class service organizations possess
all of these attributes?  I would say the top 20% of service organizations,
based on industry performance metrics, have made, or are making significant
strides in each of the outlined areas.  Is it a challenge to move your service
organization in the direction of greatness?  Indeed it is; it requires
leadership, commitment, and the endless pursuit of excellence. 

Are you up to the challenge?

Mike Woodard is a consultant with Strategy Development, an imaging industry
management consulting. He has 30+ years experience in all aspects of field
service organizations & service strategy development. At:
or 610.742.4701.

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