Top 4 Metrics for Asset-Centric Service Success

This article was submitted by our partners at ServiceMax, a leader in Field Service Management.

With our recent whitepaper “Service Supply Chain Prophecy: 2021 & Beyond” discussing the importance of clean data for service planning in 2021, we think this will be quite helpful.

Author: Daniel Brabec, Director of Global Customer Transformation at ServiceMax

“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” – Henry Ford

Out of all the quotes attributed to Henry Ford, I find that one rings the truest when it comes to service organizations. An asset-centric business by its very existence must be devoted to service in order to thrive and grow. But I often find myself having conversations about metrics and data with service leaders and they all seem to be focused on one of a couple of different areas:

Leader A – They have so much data coming off their machines that they aren’t sure where to start (Analysis Paralysis).

Leader B – They are focused on one single metric as their barometer of success in the organization (Narrow Mindset).

Leader C – They are using areas that aren’t relevant to the business of today, but it’s what they’ve always looked at historically (Retrospecting).

No matter which of the approaches they are taking toward their measurement of success, they have one thing in common: They are drowning in a dirty data lake, with no shining lighthouse beacon to guide them in the right direction to swim. But fear not, the following four service metrics will keep any asset-centric business afloat. I suggest you begin with the one that is easiest for you to take action on so that you start moving in the right direction.

#1 – Leakages

An asset-centric business needs to understand exactly what parts and level of service are included on that asset in order to be profitable. You don’t want a technician to constantly give away chargeables to a customer for free due to thinking the customer is under contract or warranty. There must be insight into the asset entitlements at the customer site, and that insight needs to be easy for the engineer to access.

Many companies don’t know how big of a problem this is because they may not be able to measure it with their current system, or they don’t have insight at the asset level. Their current system only gets as granular as the customer relationship, ignoring the unique assets in one location. Although there are absolutely situations where “no billing” services or other items are appropriate, you may be surprised at how impactful plugging these leaks can be.

#2 – Uptime

What is the single most important thing to a customer about the asset that you service? That should be a fairly easy answer: That they are able to use it. That’s really what it boils down to. They don’t really care how you fix it, just that you do it quickly, and it doesn’t interrupt their business. So how do we measure that? Uptime!

Uptime is the percentage of use a customer can expect or receives from their equipment. If you are looking to move to a Servitization model, then perhaps you will be selling outcome-based service, with specific guarantees of use for your products.

According to the Aberdeen report, Maintaining Virtual System Uptime in Today’s Transforming IT Infrastructure, released in February 2016, one hour of unplanned downtime costs organizations $260,000, on average. In a previous research study titled, After the Fall: The Costs, Causes & Consequences of Unplanned Downtime by Vanson Bourne in conjunction with ServiceMax, that number was extrapolated even further with the following: “This number becomes even more eye-watering considering the length of time these outages last – on average, the episodes of unplanned downtime experienced by respondents’ organizations over the past three years lasted for four hours. This equates to $1,040,000 for one downtime outage, on average. But, it was not necessarily just one outage – two episodes have been experienced, on average, meaning this cost can be doubled to $2,080,000 over the past three years.”

Those are eye-popping numbers that should get the attention of any service leader, especially if you have penalties associated with the service contracts on a specific asset!

#3 – Service Level Agreement (SLA)

Speaking of penalties—how would you know how quickly you have to respond to the P1 service issue before you start losing money? What about time to resolve? What level of service have you guaranteed for those specific assets at a customer location? Do you even know how to find out? Sure, you could have Sara or Coen go dig through the filing cabinets to find something resembling a master service agreement for that customer. Thankfully someone at your company had the foresight in 1953 to implement the Dewey Decimal System for cataloging your contracts… but will that give you asset-specific detail and put it into the hands of the service engineers?

Asset specific Service Level Agreements (SLAs) outline what level of service you have guaranteed for a defined asset at a customer location.

Even if you don’t have monetary penalties outlined in your SLA, you want to ensure you have happy customers that enjoy doing business with you and continue to sign long-term service contracts. This guarantees long-term annuity streams, allowing for investment in the future of the business for things like R&D where you can continuously improve your assets. This brings us to our final metric.

#4 – Customer Effort Score

How much effort must a customer put in when trying to get service on their assets from you? The customer is always evaluating how easy you are to work with, whether that is formally in a survey, or informally through word of mouth to their friends and colleagues. This ease of doing business can have a direct impact on the top line growth of your business, as well as the bottom-line savings. Low effort results in lower costs through fewer truck rolls, repeat visits, and dispatch avoidance. To learn more about measuring the pulse of the customer, read the awesome blog, “Orange to Green: Using a Customer Distress Index to Strengthen Proactive Support” by my colleague Sumair Dutta.

If you have taken the time to collect mounds of data from your assets, it’s time you start figuring out how to swim through it all. It is of the utmost importance to your service organization and to your customers that you provide the correct level of service that exceeds their expectations. I would love to hear from other service leaders about the key metrics they are tracking for their assets, and how they learned to swim and make sense of all the data they collected. Please feel free to reach out at daniel.brabec@servicemax.com.

This article was submitted by a guest author. We love highlighting expertise across the Service Supply Chain. Please contact our Marketing team if you would like to submit a guest blog.