Managing a field service organization (FSO) can be a tricky business. Some FSOs operate within a mature market where profit margins are low and market growth is limited, while other FSOs operate in emerging or high-growth markets where profit margins and revenue grow at a healthy pace. Regardless of whether they are in a mature market or emerging growth market, all too often FSOs become complacent about investing in new technology.
The Competitive Advantage
Basically, these organizations believe their growth will remain constant and overlook the impact that investments in field service automation will have on future growth. This type of thinking is counterproductive to an FSO’s future growth and can lead to a situation where field service becomes a commodity business. The way out of this malaise is to transform the FSO from a commodity business into a business with a sustainable competitive advantage.
How do you achieve this outcome? The answer can be found by looking at basic principles of Strategic Management. In his book, Competitive Advantage, Harvard Business School professor and leading management guru, Michael Porter, asserts that there are three competitive strategies available to any business enterprise:
- Premium Provider – The business uses quality as a means of differentiating itself in a market by offering basic and value-added professional services.
- Low Cost – The firm creates a competitive advantage by becoming the most affordable or most efficient supplier to the market.
- Niche – The firm serves the segment of the market where it can provide specialized knowledge or capabilities, such as in banking or healthcare.
An FSO can implement any one of these strategies to create a sustainable competitive advantage. Each of these strategies requires the company to focus on doing a better job managing both external and internal issues.
The Benefit of Field Service Technology
The great thing about field service businesses is that they can leverage technology to achieve this outcome. Field service technology can help FSOs successfully implement any of the three strategies listed above. In essence, technology enables the company to collect data on customer requirements and expectations, as well as manage the process by which these requirements are met.
As an example, let’s examine how an investment in dynamic scheduling technology can help a company create each of the three competitive strategies mentioned before. By implementing a dynamic scheduling solution, an FSO can offer and deliver guaranteed service level agreements (SLAs). As a result, the FSO could charge a premium for this higher level of service. Alternatively, the FSO could implement a low cost strategy by utilizing the technology to improve the efficiency and productivity of its scheduling process and pass these savings on to the customer in the form of lower prices. Lastly, technology can ensure that an FSO has the ability to provide customers in the same vertical market segment (i.e., hospitals, banks, etc.) with the same level of service, and thus become a best-in-class provider in that niche.
Technology is a powerful tool in the service executive’s arsenal. Blumberg Advisory Group’s experience in conducting focus groups and surveys with end-customers suggests that technology plays an important role in the selection of service providers. In essence, consumers are well aware of the impact that technology plays in managing the customer experience. It is absolutely critical that FSOs take this into account when developing their business strategy. It’s best to consider the various options available for achieving profitable revenue growth and a sustainable competitive advantage.
This guest blog post was written by Michael R. Blumberg, CMC and President of Blumberg Advisory Group, Inc. Michael is an independent consultant with over twenty years of experience in the Field Service Industry. He is an author and frequent speaker at industry events on issues ranging from sales and marketing to technology to strategy & leadership to operational excellence.