2008 Articles
December 30, 2008
Technology Evaluation Center: "The Power of Knowledge — Knowledge is Power (Part 1)"
Technology Analyst P.J. Jakovljevic discusses Knowledge Management as it relates to post-sale service.
Enter Servigistics’ Service Knowledge Management (SKM)
This brings me to Servigistics, a privately-held company headquartered in Atlanta, Georgia (US), with regional headquarters in the UK, Japan, and India, and sales and service professionals around the world. The company lives and breathes in the post-sale service market, with the broad suite named Strategic Service Management (SSM).
Servigistics was founded in 1998, and has been the established leader ever since in the service parts management market in terms of the global install base and the product’s capabilities. Until 2005, service parts planning contributed to over 95 percent of the company’s revenues and it remains the company’s major breadwinner (with over 60 percent of total revenues). Currently, Servigistics employs about 200 people and has about 150 corporate customers worldwide.
With the acquisition of ProfitScience in 2004 and TransDecisions in 2006, Servigistics is currently the only company to offer, as a “one-stop-shop,” spare parts pricing while also being able to combine parts and field workforce management. In other words, the company is the only software vendor that targets the post-sale (aftermarket) service market with a targeted set of solutions that work together on a single data model. This unified set has enabled many user companies to transform their global service operations in terms of increasing profitability, cash flow, and customer loyalty.
Service as a Strategy
While the four stages of service business maturity (which starts with service operations only enabling firefighting, then providing operational control, then performance maximization, to finally a growth engine) deserve their own lengthy article, it suffices to say that Servigistics is close in its quest for “integrated service management” that enables
- multi-enterprise collaboration (dealers, suppliers, partners);
- integrated part and technician dispatch;
- integrated parts, labor and pricing optimization;
- integrated returns and warranty analysis, and planning;
- contract and market profitability analysis;
- integrated service offering planning; and
- remote diagnostics.
The idea behind SSM is to alleviate common service process and/or technology challenges, whereby disjointed processes across service, sales, marketing, and manufacturing teams, inadequate technology infrastructure to support processes and decision-making, and insufficient performance metrics all lead to unsatisfactory performance in terms of perfect service/order delivery. These combined issues translate into real losses for business.
For example, service level agreement (SLA) violations lead to financial penalties; lack of availability (whether parts, personnel, vans, etc.) leads to lost sales opportunities and dissatisfied customers; misguided pricing leads to either lost sales (for too high a price) or lost profit (for too low a price), while unresponsiveness leads to brand degradation and loss of repeat business.
Servigistics’ Service Knowledge Management (SKM) module is the latest addition augmenting the SSM suite, which also includes Parts Planning, Parts Pricing, Workforce Management, and Commitment Management or Command Center. The SSM suite attempts to address ambitiously broad service needs starting with helping with both long-and short-term decisions.
For instance, in terms of KM, long-term decisions are about gathering content and information versus diagnosing particular problem issues in short term. When it comes to parts planning, in the long term, one has to decide how to order, deploy, return, and repair them versus locating and delivering individual parts in the short term (for a particular work order). As for workforce, how to staff, equip, and train them in the long term versus immediately assigning, scheduling, and dispatching technicians? Last but not least, the long-term pricing decisions are about setting prices and analyzing performance, as opposed to tactically managing complaints and allowances.
Furthermore, these broad service needs have to be addressed across the entire service value chain that starts with customers and then goes either through direct aftermarket service and support personnel or via dealers, value added resellers (VARs) and other channel partners, via original equipment manufacturers (OEMs) and distributors all the way to the components suppliers. The SSM suite also attempts to tackle many other complex dimensions such as
- multiple geographies;
- diverse customer segments;
- all product types serviced;
- varying types of service agreements (e.g., time and material-based, contractual SLA, etc.);
- varying levels of customer commitments (e.g., next day, same day, two-hour response);
- centralized vs. localized/on-premise offerings; and
- company-owned and third-party resources.
To that end, the spare parts planning module aims to optimize parts inventory to meet commitments at the lowest possible cost, risk, and capital, while workforce management aims to maximize customer satisfaction and service workforce productivity. As depicted in my earlier blog post, spare parts pricing management can optimize customer loyalty and the service company’s profitability. KM, which is the focus of this blog series, is used to equip technicians, partners, dealers, and customers with resolutions to the problem.
To read the complete blog, click here to visit Technology Evaluation Center's Blog.
