ROI: Building a case for investment in service technology
There is now enough research to be able to predict with reasonable confidence that implementing a field service management (FSM) solution, if done correctly, will deliver considerable return on investment (ROI) in a relatively short time frame. In fact, the biggest challenge is exactly how to calculate the ROI you are achieving, since the benefits come in many different guises.
When implementing an FSM solution you can expect to see ROI from various areas of business expense, including:
- Increasing the utilisation of your existing resources, both in the office and the field, allowing you to achieve more with the same (or fewer) people by taking advantage of tools that deliver improved scheduling and workforce planning.
- Warranty control. How often is your service just given away for free because your engineer is uncertain if the customer is under warranty? It happens more than you might imagine, even in the biggest of businesses, especially if you don’t have warranty management embedded in your FSM system.
- Reducing the costs of unnecessary second visits. By having greater visibility of the service call, as well as better parts availability, field service companies can ensure that the right engineers have the right tools to do the job first time around. Given that the truck roll is generally the biggest cost line on a field service P&L sheet, improving first-time fix rates will likely deliver significant ROI all by itself.
- Greater transparency and detail within your parts management etc. It is not just by improving first-time fix rates that parts management within an FSM system can deliver ROI. Field service operations are unique in that stock is by necessity in constant transit. Companies can have millions of pounds tied up unnecessarily in van or garage stock, which can disappear into a reporting black hole unless a fit-for-purpose solution is in place.
- Significant costs that might have seemed a necessary evil, such as paper and ink, can be eliminated through digitising admin in the field with mobile technology.
The impact of the cloud
Perhaps the most important development of recent years in terms of gaining ROI from an FSM solution is the shift to cloud computing, which is becoming the most prevalent means of deployment for such systems. The benefits of the cloud are numerous but in terms of the ROI equation, there are three big aspects to consider.
Firstly, and perhaps most importantly, widespread cloud adoption has led to most FSM solutions now being offered on a software-as-a-service (SaaS) model, where the FSM solution provider charges a monthly fee on a per-user basis. One of the big impacts of this trend has been that small and medium-sized companies that previously would have found such systems cost prohibitive on a CAPEX basis, can now access the tools enabling their larger competitors to deliver more efficient service. As the cost of an FSM solution is spread out on a monthly basis, it also becomes far easier for the ROI to become visible on a P&L sheet that isn’t carrying the heavy initial burden of a CAPEX investment.
Secondly, when a solution is deployed by cloud there is far less drain on internal resources for the service provider as the FSM vendor now bears a much heavier share of the workload in terms of actual IT support etc. Additionally, unlike an on-premise solution which could be vulnerable to unseen issues such as flood, fire or malicious attack, a cloud-based solution will allow a service organisation to continue operating should the unthinkable happen – meaning no lost revenue from field service streams.
Finally, cloud-based FSM solutions are in general much quicker to implement than traditional on-premise equivalents, meaning that the field service operation can feel the benefits sooner and start seeing the ROI quicker.
It is important to remember, however, that ROI is just one of many aspects that can be used to build a case for investment in an FSM solution. We shall be exploring this and others in a forthcoming white paper to be produced in collaboration with Field Service News. Watch this space!