Service Lifecycle Management
Driving the Emergence of New Service Business Processes
Dwindling product margins, increasing customer demands and intense global competition are pushing most service business processes to the breaking point.
This is driving companies around the world to reexamine these often sub-optimized processes in search of opportunities to harvest more profits while efficiently delivering on the customer commitments.
Historically, most executives considered the service delivered after the initial sale of a product as a low-level, transactional function of little strategic value. As a result, most service business processes are managed as autonomous stovepipes governed by separate sets of workflows oriented toward tactical firefighting and based largely on guesswork and hindsight rather than foresight, analytics and knowledge.
But, recent years have seen the advent of Service Lifecycle Management (SLM), which represents a fundamental shift in how companies view their service businesses. SLM is a mindset, a new way of thinking and a new commitment-centric business strategy built around a new set of core service-business processes that have emerged as strategic imperatives for leading organizations to maximize customer loyalty, revenues and profitability.
Service Resource Planning: The closed-loop process of planning, forecasting and managing key service resources, including field technicians, service parts and vehicles across all locations, is critical to profitably delivering on the service commitments that durable-goods manufacturers make to their customers. These resources typically represent as much as 80% of total service costs. By optimizing resources, a company can achieve the desired service delivery objectives at the lowest cost. As a result, the holistic planning, management and optimization of these resources can deliver dramatic, quantifiable improvements that impact revenue, profitability and customer loyalty.
Service Commitment Management: At their core, Service Level Agreements (SLAs) are commitments made by a manufacturer to its customers. In today’s mission-critical business environment, the terms associated with these commitments are extremely demanding. It is therefore crucial that manufacturers have the ability to determine appropriate target service-level objectives by customer segment and monitor the status of service calls globally in order to proactively identify those in jeopardy. Manufacturers must also have the ability to research the root cause of the situation and reassign necessary service resources to ensure effective resolution.
Service Partner Management: To remain competitive and profitable, today’s service organizations have undergone a significant transformation from homogeneous service networks comprised largely of company-owned service resources to heterogeneous networks comprised of in-sourced and outsourced service resources — from traditional suppliers and in some industries downstream dealers and distributors, to third-party technician, logistics, and maintenance and repair providers. As a result, service organizations must establish processes to coordinate and monitor the activities of these partners to maintain control over the customer experience.
Service Pricing Management: The processes of service contact and service parts pricing are often the most overlooked profit and revenue levers in any service organization. The pricing practices deployed by most service organizations typically prevent them from capitalizing on substantial profit improvement opportunity. More broadly, this business process includes understanding the cost to serve, optimizing service contract pricing, gaining better visibility into market activity and determining the best overall pricing strategy in order to improve competitiveness in the marketplace.
Leading companies increasingly understand that maximizing service profitability and customer loyalty can only be achieved through the re-examination, optimization, integration and efficient management of these service-business processes, supported by the right enabling Service Lifecycle Management technology. Companies that have embraced Service Lifecycle Management have driven immediate and quantifiable results that include:
- Improved gross profits of 5 to15%
- Increased service revenue of 5 to 15%
- Improved parts availability of 10 to 20%
- Reduced inventory by 20 to 60%
- Increased productivity of 50 to 100%
- Improved customer loyalty
If you want to learn more about how to improve your service-business process and service lifecycle management, call +1 888.942.8623. Or, e-mail us at contactsales@servigistics.com. Discover how Servigistics consistently delivers beyond expectations.
