Field service industry expert, Bill Pollock, explains how service management KPIs in 2016 are shifting back to the basics, although the ways they measure and exceed those goals are changing fast.
A seasoned field service analyst, Bill Pollock, president and principal consulting analyst at the Westtown, Pennsylvania-based research analyst firm Strategies For GrowthSM (SFGSM), has his eye on service industry standards and provides no shortage of advice for service managers looking to run a top-flight field service department.
In this interview, Bill breaks down how business leaders can improve key metrics, such as profitability and customer satisfaction and what service managers can to do exceed key performance indicators (KPIs) using today’s technologies.
Today’s service KPIs are back to the basics, but also back to the future
Even though there have been many changes in how companies do business, and there are many new technologies that have transformed business processes, many of the traditional service KPIs have stayed the same.
For example, customer satisfaction is still #1. “The best practices organizations have 90% or higher customer satisfaction,” said Bill.
Here are the top KPIs Bill highlighted for today’s service organizations:
1. Customer Satisfaction
2. Total Service Revenue
3. Total Service Cost
4. Technician Utilization
Returning to Normalcy: The evolution of service management KPIs
In fact, the priority of these top KPIs have evolved significantly in the last decade.
“Recently, we’ve been seeing total service revenue surpass service cost. In 2016, we’re seeing 72% of organizations looking at total service revenue, and 69% at total service cost.”
While this isn’t a huge difference in percentage, it’s reflective of the trend to increase revenue from service since the cost-cutting days of the 2008 recession. According to Bill, best practices organizations are more focused on revenue than cost.
“During the recession, KPIs were cost oriented: cost, per product; cost, per field engineer; cost for service. But, after 2-3 years, the most aggressive – and progressive – organizations had cut all the costs they could, and the market started coming back to revenue generation.”
Service organizations are prioritizing revenue-production over cost-reduction. But, in 2016 they’ve started coming back around to placing the highest importance on customer satisfaction.
“Today, now that best practices organizations have implemented everything they could to generate more revenue; they’ve come full circle, back to normalcy, and back to customer satisfaction as the most important measure of success.“
How service managers can help their team meet KPIs
As a service manager, it’s one thing to set goals and another to meet them. Empower your team to meet the KPIs you’ve set by following these tips:
- Set targets: Decide on the baseline, and define standards or targets. Then create a plan to reach them.
- Define a scoring methodology: Determine how you’ll measure success and assign individual scores that roll up to a total score for each category; for example:
- 95-100% = Exceeds expectations
- 85-95% = Meets expectations
- 0<85% = Does Not Meet expectations
- Link KPIs to critical factors that drive the performance of the organization. If the metric is not directly linked to a critical organization success factor, it will probably not be worth the resources to measure.
- Assign someone to take ownership of the data coming in. If you don’t have accurate data to report on, there’s no chance you’ll achieve your goals.
- Communicate KPIs clearly to everyone involved.
- Invest in resources necessary to achieve goals. You can’t expect someone to increase measurement in an area without listening to their needs and giving them the resources to make improvements.
- Foster collaboration between sales and service. Give sales-reps an incentive to sell more service contracts and turn the service department into a profit center.
Technology is changing how service organizations set goals and measure KPIs
Manual or paper-based service processes make it nearly impossible to track the data necessary to manage and measure KPIs. That’s part of the reason why FSM software is a crucial piece of the service management puzzle. Not only does it improve service operations, it also enables you to collect the information you need to measure improvements.
“You could be looking at the right KPI for your business, but calculating it the wrong way. You can use technology to figure out what the problem is. Then, once you know the problem, it’s a synch to fix.”
Conclusion: Always room for improvement
In closing, Bill emphasized the importance of continuous improvement and measuring success. “Even if what you’re doing is rated as excellent today, you still need to improve it. How are you going to do that? You need to measure where you are and make improvements from there.”
Even if you’re turning a profit today, if you’re not taking steps to stay up-to-date and relevant, you’ll find yourself slipping to competitors.
Bill suggests that “Now is your time! You have the technology; you’re collecting the data. Now you have to use it effectively!”
Bill Pollock is President & Principal Consulting Analyst at Strategies For GrowthSM (SFGSM), the independent research analyst and services consulting firm he founded in 1992. In 2015/2016, Bill was named “One of the Twenty Most Influential People in Field Service” by Field Service News (UK); one of Capterra’s “20 Excellent Field Service Twitter Accounts”; and one of Coresystems’ “Top 10 Field Service Influencers to Follow”. He writes monthly features for Field Service News and Field Service Digital, and is a regular contributor to Field Technologies. Bill may be reached at +(610) 399-9717, or via email at email@example.com. Bill’s blog is accessible @PollockOnService and via Twitter @SFGOnService.