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  • New SLM Resource from Industry Week

    No longer a tired after-sales routine, service is now the strategy that builds and establishes reputations, sells the product, and creates new business potential for vendors and customers. However, many manufacturers still haven't tapped into the profit potential of post-sales service. Learn how many companies are organizing their service processes under the umbrella of Service Lifecycle Management, in much the same way as they’ve done in areas like Supply Chain Management and Product Lifecycle Management.

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    Learn why an integrated approach to parts pricing and planning helps boost service profits.

SLM Hub Exclusive: Disgruntled elf blows whistle on Santa’s SLM program!

Jingle McSorley was the former Lead Elf of the Land of Misfit Toys.  Last Tuesday after a heated exchange with Santa, he threw down his miniature apron and stormed off the North Pole ice.  The SLM Hub conducted the first-ever exclusive live interview with a Christmas Elf, revealing shocking details of the massive and controversial inner workings of Santa, Inc.

SLM Hub:  “Jingle, thank you for joining us today, and apologies for this hot Atlanta air.  You were the esteemed Lead Elf at the Land of Misfit Toys for 325 years.  Why are you leaving now, and why so suddenly?”

Jingle:  “Bah!  The Land of Misfit Toys is a ghost town.  That was a cushy job watching those islands.  I got to know each toy over the years, and each island evolved its own culture, unaware of the others.  Now Santa knows what toys are where, and the toys are never there for more than a few days before they’re repaired or recycled into newer toys.  Even Rudolph doesn’t visit anymore.  He went and got a nose job last year, now that Santa’s sleigh has fog lights.”

SLM Hub:  “Jingle, it sounds pretty rough.  Did you consider transferring to the main warehouse?  I hear they have excellent benefits there”.

Jingle:  “Yeah, the pay is higher at the warehouse now, but there’s no bonus stock left for us anymore on December 26.  That used to be our holiday, when we’d get the inventory surplus that the good kids didn’t want.  Santa’s so darn accurate at predicting wish lists now.  He has databases of prior wish lists and even wires the Mall Santas to listen in on the kids’ current requests.  It’s maddening.  The stats elves are to blame. My elf kids are still playing with TeleTubbie dolls and “Who Wants to be a Millionaire” board game surpluses from 10 years ago.  Do you have any idea how annoying TeleTubbies are, let alone after 10 years?  Santa, have mercy…overstock on some Legos and PlayStations, please!”

SLM Hub:  “Well, surely Christmas Eve must be a blast for the elves.  Is it still the biggest party north of the Arctic Circle?”

Jingle:  “Christmas Eve ain’t what it used to be either.  It was smooth sailing before the population started exploding in 1945.  We’d have a few drinks, load up a few sleigh loads and that was it – Santa was off for the night and we’d party like it’s 1899.  Now we have a zillion good kids, and no extra staff.   Santa doesn’t even deliver presents himself anymore, except to the very best kids, like Yankees fans.  He outsources the rest on GPS-fitted sleighs and watches them like a hawk from his command center.  If any of them veers off course, stops too long for spiked eggnog, or idles the Flux Capacitor on a rooftop, an alarm sounds, and he’s all over them.”

SLM Hub:  “Even though you’re a gruff old curmudgeon, Santa would surely ask you to return, and you could name your price.  Think of all the experience you have in servicing toys.”

Jingle:  “If I played that card 10 years ago I’d be a rich little man!  It’s tough to keep good talent in the North Pole, you know.  The smart youth wants to go way down south to Fairbanks or Edmonton where there’s warmth and excitement – no Justin Bieber or Bryan Adams concerts in the North Pole.  We had a huge talent gap a few years ago, but Santa got the best and brightest elves off of the toy making lines and had them write their service wisdom in a knowledge base.  Santa now pays us based on our knowledge contribution rather than toy-saving heroics.  The elf cowboy days are over.”

SLM Hub:  “Sounds like quite an operation.  I bet the good children are happy.”

Jingle:  “Yes, surveys are way up.  We haven’t missed a good kid’s house before dawn in 7 years.”

SLM Hub:  “What do Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner, and Blitzen think about all of these changes at Santa, Inc.”

Jingle:  “I don’t know.  I haven’t seen them in five years.  They’re all retired in the Caymans, living off of huge stock dividend checks.”

SLM Hub:  “What do you want for Christmas?”

Jingle (excited):  “A Red-Ryder carbine-action, 200-shot Range Model air rifle!”

 SLM Hub:  “You’ll shoot your eye out.”

 Jingle:  “This interview is OVER.

About Jingle McSorley:

Jingle McSorley is the former Lead Elf of the Land of Misfit Toys.  He was born in 1697 at the North Pole, the son of a wooden toy elf, and began his career in the metal toy shop. But, when toy returns began 1786, he transferred to the repair depot, better known as the Land of the Misfit Toys and stayed there until his untimely exit in 2011.  An avid ice fisherman, Jingle is now retired in Barrow, Alaska, where he is working on his memoirs and consults global toy executives.

Special thanks to frequent SLM Hub guest contributor Dave Duncan for this “exclusive” interview. Happy Holidays!

Waiting for Service Delivery Improved my Chainsaw Skills

By Dave Duncan

Working in aftermarket service I am immersed in countless projects with leading companies that are designed to help improve their customer’s service experience. At the end of the day, we are all someone’s customer and recently I had my own ordeal with a long wait for customer service. As one of the more than 500,000 Connecticut Light and Power customers that lost power after the early season snowstorm on October 29th, I have a renewed appreciation for how a customer feels when waiting for fast and efficient service delivery. Unfortunately, despite the top-notch efforts by the tree and electrical technicians, the utility management lacked the necessary coordination and visibility of contracted resources to operate efficiently. Connecticut Light and Power completed the greatest power restoration in state history, but the feat is widely viewed as too late.  We waited for 11 days for our power to be restored, but at least I was able to hone my chainsaw skills…

Let’s continue the discussion I began on service models in my post on Field Service SLM back in September. As I mentioned then, most post-sales service supply chains operate with one or more of these service models: Field-based, Dealer-based, Depot-based and Performance-based. For this blog post, I’m going to focus on Dealer-Based Service Lifecycle Management (SLM).

Dealer-based SLM is the subset of SLM that covers the processes associated with delivering customer service through dealer networks.  It emphasizes customer asset availability and both OEM/dealer service delivery margins.  It includes remote service, knowledge management, parts planning, parts pricing, and business insight process areas.

Dealers have broad customer reach for both service and support, but also present additional aftermarket service challenges.  Dealer growth and margin incentives do not always align with the manufacturers, particularly for warranty work.  Additionally, dealers generally can sell and service competitor products, creating competitive dimensions that don’t exist with in-house field or depot based service models.  Service part sales are particularly competitive.

Dealer-Based SLM represents a compelling opportunity for service business process improvement.  Few dealer-based organizations today have established the needed coordination and visibility across their service network to align dealer and manufacturer incentives/activities.  Disjointed technology and process across the contributing nodes causes punishing inefficiencies.  Industry analysts have begun to validate these struggles and mitigations:

  • Expensive dealer support phone channels.  “As much as 70% of inbound support calls are finding information that customers have but could not find”…”20% of calls simply for parts identification”.  (Aberdeen)
  • Unnecessary warranty parts expenses.  “25% of orders request multiple parts because the technicians are unsure of the right one.”  (Aberdeen)
  • Unnecessary warranty labor reimbursement.  “Non-linear troubleshooting tools can help techs solve problems faster, reducing #steps by 50%.” (McKinsey)
  • Lost revenue opportunity.  “Third Party service providers, suppliers, and repair shops are believed to own about 75 percent of the service and parts market.”  (Accenture)
  • Conflicting pricing and stocking practices.  “Profit-Driven Parts Management made possible through parts planning and parts pricing optimization can drive 20% higher profit contribution from service.”  (Blumberg Advisory Group)
  • Scaling new product introduction for effective service.  “The percentage of clients who identify their products as high complex has grown from 42% in 2003 to 64% today.”  (TSIA)
  • Coordinating incentives/visibility among dealers, contact centers, repair depots, warranty, and other service nodes.  “(Service Lifecycle Management) tends to be a fractured process, since it incorporates roles and responsibilities from various groups that often have different goals and measures. Typically, these groups have acted semi-autonomously, with no management incentive, to synchronize their activities in the overall context of the business strategy. This limits the potential (read: profitability) of the overall service business. Metrics have been defined and reported independently, which often leads to conflicting outcomes. Leading service companies, however, bring these various roles together under one group or executive and use common technology platforms.” (Gartner)

Dealer-Based SLM provides the necessary coordination and visibility to improve both customer asset availability and service margins. When an OEM has a Dealer-Based SLM program, the improved efficiency of service sessions is significant and many times what was a 12 step process to complete service is reduced to 6 steps, with improvements that can include 89% uptime improvement, 57% service cost improvement, and $500 over-stock avoidance.  It can keep your customers’ lights on at a low cost!

Dave Duncan is Vice President, Product Portfolio Management, for Servigistics. He holds a BSE in Civil Engineering and Operations Research from Princeton University

Got a fractured field service operation? You’re not alone.

By Dave Duncan

Chances are your post-sales service supply chain operates with one or more of these service models:

  • Field-based: customer assets are serviced remotely or by the asset operator, or a technician travels to the installed location to service the asset
  • Shop-based: customer assets are serviced remotely or travel to maintenance bays and/or repair depots
  • Dealer-based: dealers or distributors service assets and often operate in competitive asset and parts markets
  • Performance-based: service contracts are based on asset availability and/or other performance metrics.

For this discussion, let’s focus on field-based service lifecycle management (SLM). Contrary to what you might think, it’s not just about improving field force productivity. If you have a field-based service organization, your focus should not only be on scheduling and dispatching technicians but on the integrated SLM processes associated with planning, executing, and analyzing field service operations. You need to combine parts planning, field service, service knowledge, service content, and remote service systems and procedures to fully optimize the field service delivery process flow for high availability, growth, and margins.

With field-based operations, customer assets are serviced remotely or at the customer site and the focus is always on asset uptime and service delivery margins. By utilizing an integrated approach to SLM, you can gain full visibility of customer loyalty threats, cost to service, and service profit risk. Aberdeen’s recent benchmark for field service measured that 24% of dispatches require repeat visits.  42% of these repeat dispatches were due to unavailable parts, and 25% from improper diagnosis.  Moreover, 25% of parts orders contain multiple parts since the technician cannot determine which one is needed.

Without field-based SLM, your service network is likely fractured and suffering from conflicting incentives and ineffective visibility for improvement. Do any of these scenarios sound familiar?:

  • Contact center agents scored on average handle time are trigger-happy to dispatch when an extra 5 minutes of diagnosis could save a several hour dispatch or at least better prepare a dispatch.
  • Field service technicians scored on number of visits per fix are incented to replace multiple parts or higher assemblies to compensate for imprecise fault isolation.
  • Repair technicians cannot trace repair orders to dispatches, severing feedback loops back to Field Service to control no-fault-found rates.
  • Parts planners have no visibility of necessary versus unnecessary part changes, so inventories are high to enable first-time fix rates.

With SLM, you achieve the visibility to score contact centers on a balance of average handle time, dispatch avoidance, and technician first-time fix rates.  This creates business-aligned incentives to invest sufficiently in call-time to allow for phone-based fixes or at least to better prepare the dispatch with relevant diagnostics.  Field technicians in turn may be scored on a balance of number of visits per fix as well as no-fault-found rates for returned parts.  These balanced measures in turn lead to less repair depot churn and overstocking by planners.

Other benefits of field-based SLM include:

  • Empowerment of lower-cost touch points like remote service, self-service, and contact centers to avoid dispatches or triage for reliable first visit fixes.
  • Extending the value of the parts chain by enabling technicians to diagnose the right part the first time, and to immediately locate the best available part for the current service.
  • Proactive and condition-based maintenance:  being able to detect imminent issues and low machine usage levels to offer proactive training and other services to ensure customers’ utilization, throughput, and value targets are met.
  • Business Insight:  collecting, analyzing, and acting on end-to-end field service and planning data to continuously improve service operations and products.

So, where do you go from here? The first step is to look for signs that your field service organization might be fractured, per the scenarios I listed above. Then, estimate how much these instances of competing incentives or limited process visibility might be costing you on an annual basis. Then it’s about prioritization. Start where you think your total cost to serve is suffering the most.

Whether you start out by integrating parts planning with field service or field service with knowledge management and remote service, the investment in field-based SLM will drive significant cost efficiencies for your service organization,  trigger immediate positive impact to overall corporate profitability, and position your firm to compete for additional value-added services required by your customers.

Dave Duncan is Vice President, Product Portfolio Management, for Servigistics. He holds a BSE in Civil Engineering and Operations Research from Princeton University

An Often Overlooked Use Case of Remote Service in Service Issue Resolution

By SLM Hub Guest Contributor, Alex Shapira

Service Issue Resolution is defined as the detect-diagnose-repair-restore work cycle in the post-sales value chain. By leveraging advanced knowledge management and diagnostics tools and techniques including remote service and content management for issue resolution, you can improve asset uptime and slash service costs in high tech service environments.

A key component of Service Issue Resolution is having remote service capabilities that provide the ability to proactively discover and diagnose problems using remote monitoring. When most companies begin to consider a remote product service program, they think of the classic benefits such as reducing service delivery costs using remote diagnostics or increasing customer satisfaction by proactively discovering problems. These benefits are certainly the low-hanging fruit, and should form the basis of a solid remote service program.

However, once an organization gains experience with remote service, it often discovers a powerful benefit of remote service – customer usage insight.

A good remote service solution should be flexible enough to allow an organization to collect and analyze any piece of data from its products at the customer sight, and to trigger the appropriate business process. You shouldn’t stop at collecting information about the health and performance of your asset. Your remote service solution can give you priceless information about how your customers are using your product. Unbiased customer usage data collected from your products is very different to interviewing your customers and asking them how they use your product (which we still advise organizations to do regularly), and can open up a world of opportunity.

Here are some real-life examples of how companies are leveraging customer usage insight:

  • A machine manufacturer regularly measures the overall usage levels by its customers. When the remote service agent discovers that a machine is rarely used, an alarm is triggered to the account manager who follows up to discover why the machine was not in use and how the vendor may assist.
  • A complex broadband vendor monitors for inefficient use of its product by the customer. The vendor then offers custom training (along with a report that “proves” these inefficiencies) to help the customer extract more value from the system.
  • A company has introduced a more powerful version of its product. The marketing team collects usage information to discover the customers who are currently running at full throttle. The company initiates a targeted campaign for these customers.

Start thinking about how you can leverage customer usage insight for your products. Incorporating these elements early in your service issue resolution program can have a powerful impact on the way you service your customers.

Alex Shapira, Vice President, US Operations, NextNine, has more than 20 years of experience in digital manufacturing, CAD/CAM, real-time production management and mission critical defense systems. Prior to NextNine, Alex was the CEO of Proficiency, Vice President of Production Management at UGS (currently Siemens PLM) and was part of the executive team at Tecnomatix as Executive Vice President of Product Operations and later General Manager of the Shop Floor Division. Mr. Shapira holds a BSEE from the Technion in Israel, a M.Sc. in Computer Science from the Bar-Ilan University and an International Executive MBA from Kellogg-Recanati, Northwestern University of Chicago & Tel-Aviv University.

Recommended Resources:

Aberdeen Group’s “The Real Time Service Enterprise: Leveraging Remote Connectivity to Drive Service Revenue”

Webinar: Service Issue Resolution for High-Tech Durable OEMs

Service Optimization – Oxymoron or Major Opportunity? Revisited.

By SLM Hub guest contributor, Michael R. Blumberg

Back in 2002, my firm published a white paper titled Service Optimization – Oxymoron or Major Opportunity.  At that time, despite the fact that Post Sales Service was becoming a major contributor to corporate strategic revenues and profitability, many service mangers believed that their businesses were too complex to follow normal business rules regarding optimization of service efficiency, productivity, quality, and effectiveness.  The research proved that optimization was not only possible but also achievable through technology improvements in the service delivery system such as dynamic scheduling, mobility solutions, service parts planning, remote diagnostics, and knowledge management software. The data showed  that companies who had implemented advanced technology performed significantly (e.g., more than 30%) better in critical performance benchmarks related to FE Utilization, Spare Parts Fill Rate, First Time Fix Rate, SLA Compliance, revenue contribution, and profit margins.

However, there has always been a segment of the end-user marketplace that just did not accept the fact that advanced technology is a strategic enabler to optimized performance. Their perspective was that through the right training and processes, people could achieve the same results as the new technology.  It was sort of a “John Henry” syndrome at play. Sometimes this syndrome was the result of a real fear that technology would out place people. However, other times, it was a rationalization used when a company could not build a business case for investment in new optimization technology. Indeed, there have been many instances where the cost of deployment did not produce the desired return on investment or where the volume of service activity was so low that it was impossible to leverage optimization technology to produce any real benefits. Putting the latter reason aside, the cost of optimization technology has now declined significantly as the result of new advances in information technology in general, and cloud computing specifically.

Thanks to these developments, more and more companies are implementing advanced optimization technology.  Indeed, the gap between industry average and best in class service performance has narrowed from where it was 10 years ago. The issue today is not whether or not a company is using optimization technology at all but whether or not they are using it correctly. Deployment of optimization technologies in Aftermarket Service typically evolves over a number of years as companies tackle one functional process area at a time. As such, functional process silos are likely to exist. This can be problematic, as this type of environment does not take into account interdependencies that exist between functional processes.  As a result, even small short falls in service performance in one area are magnified when the overall service performance of the organization is measured.  Here are some examples where this can occur:

  • Company achieves a high on-site response time but the SLA compliance rate is low due to parts shortages caused by poor planning & forecasting  and/or parts management
  • Parts Availability and Response Times are high but First Time Fix Rate is low due to lack of knowledge management tools
  • Return Velocity Rate is high but so is the Warranty Claims Rejection Rates due to lack of poor Warranty Management capabilities
  • Parts Forecasts are accurate but parts income levels are low due to poor Parts Pricing capabilities
  • Rapid repair turnaround time (TAT) but high DOA rates due to lack of quality controls on the Shop-Floor

Ultimately, these shortcomings have a negative impact on the financial performance of an organization. These challenges can be resolved through the implementation of a fully integrated service process and technology backbone found within a state of the art Service Lifecycle Management (SLM) system. This type of infrastructure enables optimization to occur within and between key functional process areas such as field service, remote support, parts planning, etc.

To validate this perspective, we conducted a benchmark research program earlier this year with 100 companies to determine the impact of integrated end-to-end functionality on key financial metrics.  The general conclusions of our study found that cross-functional, inter-process optimization does produce dramatic improvements in service revenue and profit contribution as evidenced by the following scenarios:

  • Profit-Driven Parts Management made possible through parts planning and parts pricing optimization can drive 20% higher profit contribution from service.
  • Service Channel Optimization achieved through utilization of lowest-cost service channels (remote service or self service) before escalating to  higher touch channels can drive 150% higher revenue contribution from service.
  • Service Issue Resolution improved through access to better knowledge management tools. This in turn increases service worker productivity and efficiency which can lead to 56% higher revenue contribution from service.
  • Reverse Logistics Optimization through more efficient shop floor controls, better data management, improved  inventory management and parts planning and management, along with smarter troubleshooting and repair can lead to 100% increase in revenue within a 3 year period with a minimal (20%) increase in inventory.

These results provide empirical evidence that companies who deploy cross-functional, inter-process optimization solutions are likely to achieve better financial results/returns than those who take a more conservative approach.  Clearly, the deployment of this type solution would enable a service provider to take a strategic approach to service management. With such a system, a service provider can leverage the service revenue, profit potential inherent within their installed base, and drive value for the company.

Michael Blumberg, CMC, is president of the  Blumberg Advisory Group, a leading research &  consulting firm to the High Tech (aka Aftermarket) Services Industry and a pioneer in helping companies manage service as a strategic profit center.

Communications Preferences and Customer Segmentation – the Mardi Gras Parade App

By SLM Hub Guest Contributor, Dr. Adam Krob, The Verghis Group

This past weekend was the kick-off to the Mardi Gras parades in New Orleans.  As my daughter and I were walking to a parade on Sunday afternoon, I consulted my mobile Mardi Gras app.  The app allowed me to find a great place to park and a wonderful spot to watch the parade go by!   After years of spending Mardi Gras looking for a parking place, this app was a godsend.   Every Mardi Gras reveler should have this new app!   Despite my enthusiasm, however, one of my friends told me she still prefers the printed Mardi Gras guide.

It struck me that we often make similar assumptions about how our customers want to communicate through the service management lifecycle.  Informing customers about the status of their incident or request is critical, but how we do it is also important.  We need to know how they want information delivered.  We can invest hundreds or thousands of dollars in smart mobile or tablet apps to provide up-to-the-second information on a bug fix or part delivery, only to find that our most important customers (fill in what is important to you, greatest revenue generators, provide the best referrals, most profitable) don’t want to or simply can’t use them.

This year, I worked with a company that provides support for field technicians—literally working in the field, landscape contractors.  Using the company’s tools, these contractors could get updates via email on information critical to their client’s success.  Getting that information via an email or even a mobile Web site doesn’t help the contractors.  Some of these contractors don’t have Web-enabled phones and many work in areas where data networks are too slow.  A text message would be much better (and less expensive)!

I also worked for a number of years in higher education and found that students were usually a step ahead of me in their communication preferences.  When I was at Tulane University, our incident management system provided detailed incident notifications on escalations and resolutions (and it delivered our CSAT surveys).  The notifications went to the students’ university email inbox.  You can guess how many students read them… approaching zero.

I personally love mobile apps, but they don’t work in every situation or for every customer.  When you are segmenting your customers and allocating resources to projects, accordingly (which I hope you are!), look at each segment’s communications preferences.  Investing in the latest app might move the net promoter dial if your customers use it, but it might also sit at the bottom of the iTunes store with 0 downloads.

As for me, I will grab my smart phone and go to a parade.  Happy Mardi Gras!

For more than two decades, Dr. Adam Krob has studied and evaluated IT and customer support structures.  While his career spans numerous areas, his core focus has always been the optimal alignment of support with the institution’s goals and the use of knowledge management strategies, such as KCS, as a tool to achieve these goals. Dr. Krob is a pioneer in enhancing overall perceptions of service, and in the transformation of service from a reactive to a proactive enterprise. He earned his MA and PhD in Political Science from Duke University, and his MBA from Tulane’s Freeman School of Business. He lives with his  wife  and daughter in New Orleans.

Agathas in Our Midst (Can Lead to Better Products)

by Frederick C. Van Bennekom, Dr. B.A

Steven Spielberg’s 2002 movie, Minority Report starring Tom Cruise, presents a world in which homicides are prevented before they happen.  Three precognitives’ visions of near future events allow the Department of Precrime to capture these intended killers.  Neat idea.  If only we in the business world could spot product quality `crimes’ before they occur — rather than reacting to problems once customers use our products.  Product designers and product managers are tasked with projecting the future, but is there an organizational equivalent for Agatha, the precog who sometimes saw the future differently from her mates, Arthur and Dashiell?

In reality, there is.  The organization that fixes problems for products currently in use can do far more than simply respond to and rectify these problems.  The customer support organization, also know by other names such as technical support or customer service, can be seen as a knowledge center on product performance and customers’ reactions to products.  No other functional group has more contact with customers, yet many, if not most, companies never leverage the strategic potential.

Most companies think that the concerns customer support would bring to the product development process will be narrowly focused around resolving outstanding problems or bugs in the product.  But customer support can and should bring far greater benefit through their focus on the product supportability during the whole cycle of ownership.  However, don’t confuse supportability with maintainability.  Supportability encompasses all aspects of product ownership: installability, usability, maintainability, upgradeability, and decommissioning.

Too often, designers do not understand the working environment of the user.  How often have you struggled with a product so overflowing with functionality and a complicated user interface that you could not get the simplest operation to work, let alone perform basic maintenance?  From DVD players, to mobile phones, to washing machines, customer support’s extensive experience with the users’ environment may provide information that can radically improve product design, enhancing customers’ experiences with new products and making them less expensive to own – and support.  Through the holistic approach to supportability outlined above, total cost of ownership can be reduced and, more importantly, total net benefit of ownership (SM) can be maximized.

For example, Varian Oncology recognized that the time to install their large machines in hospitals was costing them money – and the hospitals were losing out on potential revenue during the installation period.  A cross-functional team including support personnel identified many aspects of the installation process done on site that could be performed more easily at the factory.  They also found simple changes, like pilot drilling holes and packing distilled water in the installation kit, could save many hours of installer time.  Customer benefits increased while both parties costs decreased.  At software vendor Meditech, the support group has also heavily focused on the user experience.  They applied a concerted effort at reducing customers issues when upgrading their software, which also reduced Meditech’s support costs.

Leveraging customer support’s potential knowledge means integrating it into the new product development and product management processes.  R&D can access support’s knowledge in structured databases captured during service transactions.  Alternatively, the knowledge can be transferred by having customer support personnel serve on the product development team.  This approach means that relevant hard data will be discussed and also that support liaisons can apply their experiential wisdom to advise how new products will perform and problems customers may encounter using them.  As a software test manager stated to us, “Engineering knows how the product is built.  Testers know how the product works.  Support knows how the product is used.”

Microsoft for all its faults has focused heavily on product usability.  A critical input to that process is feedback garnered from the product support group.  They have highly structured the collection of detailed information about product performance during a sample of support calls, and they have formalized the communication flow from support into the product engineering group.  Most important, the information flows to the designers at the start of the design process when it can have the most impact.  EMC has state-of-the-art advanced diagnostics capabilities built into its storage units, which anticipate failures and “phone home.”  The support center that fields these calls is physically located next to the development group.  The communication flow could not be tighter when resolving unexpected bugs.  EMC also sends support engineers to data base software companies when new versions of their software are being developed.  This ensures compatibility from the start.  Many other examples could be cited.

These examples make the process of integrating precognitions of a company’s Agatha — the customer support group — into the product management process seem simple.  Far from it.  Such cross-functional collaboration, now called collaborative engineering, is not an organizational innovation that happens simply by management dictate.  In most companies deep-rooted cultural barriers challenge open collaboration, especially with those pesky technicians in customer support who only seem to file complaining “minority reports.”  Communication technologies and integrated data bases can improve the data flow across organizations, but without breaking the Gordian Knot of cultural resistance, the full benefits of collaboration will never be achieved.  Larger companies face this problem more strongly.  Functional distinctions, especially when support becomes a profit center, lead to thick barriers.  Smaller companies have more informal interactions, lowering the barriers.

The support organization at Eaton’s Cutler-Hammer division approached product management and marketing by saying, “We have information from hundreds of customer contacts you might find valuable.”  They made a specific effort to show the potential for this information.  Many companies have the development engineers take turns doing maintenance work, i.e., bug fixes, or create a “situation room” staffed with developers and testers to support the support engineers when the product first ships.  Manufacturing companies frequently put the factory floor in view of the office workers to sensitize them to the place where the true value-added activities occur.  Today, with so many products requiring customization by the support group for the customer to receive the full value from their product purchase, shouldn’t the support centers be in prominent view to increase the customer sensitivity of all workers?  Cloud computing only enhances the central role of support in product development and value delivery.

Change management programs that span organizational boundaries are onerous, but the strategic benefits are great.  Company costs can be lowered and customers’ loyalty enhanced.  In Minority Report, Agatha said to John Anderton when he faced the decision to murder the man who killed his son, “Can you see? … You can chose.”  So can companies.  But first they have to see their Agathas for what they really are – an untapped strategic resource.

Fred Van Bennekom, Dr. B.A., Principal, Great Brook Consulting,  helps organizations collect and apply customer and employee feedback. Great Brook conducts workshops on survey practices along with advising clients on their surveying practices.  Fred authored Customer Surveying: A Guidebook for Service Managers, and he teaches operations management in Northeastern University’s Executive MBA program and at Babson College.

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