Disruption in the Field Service Software Space and Challenges to Software Selection

1. Background

Service organizations are recognizing that providing superior customer service is fundamental to increased customer loyalty and profits. An Aberdeen Group study1 found that best-in-class organizations (top 20%) focused on service as a business achieved a Year over Year change of 21.3% in customer satisfaction and 45.3% in annual company revenues. This is very impressive, especially when compared to the bottom 80% of firms that realized only a 3.3% improvement in customer satisfaction and 6.2% revenue improvement.

As a result, service companies are investing heavily in service to climb into the top 20%. One of the primary vehicles of that investment is via field service management (FSM) technologies to support their service organization and service delivery. According to a Markets and Markets research report2 , the FSM software market size is estimated to grow from $1.78 billion USD in 2016 to USD $3.61 billion USD by 2021, a compound annual growth rate of 15.1%.

The investments by service providers and the projected market growth rates for FSM technology firms is having a ripple effect in the industry. Specifically, the current industry growth and potential has caught the eye of a significant number of private equity, venture capital and large technology companies looking to capture a share of this growing market. The sheer number of available FSM software options coupled with recent FSM software industry disruption is causing uncertainty and confusion for service companies to determine the best FSM software fit for their company. Jolt Consulting Group recommends a FSM software selection methodology that companies can utilize to address the key selection challenges and uncover the important, but many times subtle, differences between the FSM software solutions.

1.1 FSM Software Options and Disruption

FSM software directly impacts the service organization’s interactions with their customers and the customer experience, therefore, it is IMPERATIVE that service companies select the best technology for their business the first time; failure is not an option. Complicating this decision is the abundance of FSM software options on the market; a Google search of “field service management software” yields thousands of results. With so many options that appear similar, it can be difficult for service executives to differentiate between the solutions and make the best choice.

Another challenge impacting FSM software selection is the significant disruption in the FSM software market in the last several years through a series of accelerating acquisitions and partnerships.

 

Screen Shot 2020-09-02 at 10.16.04 AM.png

Figure 1 highlights in chronological order since 2012 the major FSM software acquisitions; many of these companies are included in Gartner’s 2016 FSM Magic Quadrant3 . It is interesting to note that the acquisitions have been completed by one of two company types, technology companies adding to their product suite (e.g. IFS, Microsoft) or private equity/investment banks (e.g. Francisco Partners, Diversis Capital) adding to their investment portfolio. Regardless of the acquisition type, investments in FSM software companies validates the increasing market potential and focus of service organizations to select and deploy FSM technologies.

Figure 1 does not include other significant events in the FSM software space that are also changing FSM software offerings and the competitive landscape:

  • Salesforce’s 2016 OEM agreement with ClickSoftware providing Salesforce entry into the FSM space via their own FSM solution (Field Service Lightning).
  • PTC’s partnership with ServiceMax for IoT and field service.
  • Private equity company investments (not outright acquisitions) in many FSM software providers, e.g., FieldAware, ServiceTitan and others.

1.2 FSM Software Selection Challenges

The sheer number of available FSM software options coupled with the industry disruption causes uncertainty and confusion for service companies to determine the best FSM software fit for their company. In addition, many of the consolidated firms have tended to focus on the upper end of the market, thus creating a void in the middle tier that has allowed newer, lesser known players to emerge and begin claiming a piece of the market. Further, after an initial review many FSM solutions appear to be very similar in their functionality. In many cases this is well founded conclusion, as most FSM solutions can routinely handle the basic process flow and requirements for work order management; work order creation, schedule/dispatch and mobility. However, there are important, many times subtle, differences between the FSM software solutions that must be uncovered to ensure the best technology selection.

When a FSM software company is acquired, it may be a precursor to a strategic shift in the company’s direction as the acquiring company may (or may not) significantly change the go-to-market strategy or product direction. The overarching strategy will dictate the product roadmap and company profile that will be best supported by the resulting FSM software company. Some examples of these future strategic factors include:

  • Narrowing of focus onto a core set of industries and verticals (e.g., industries with simpler use cases versus industries with complex requirements).
  • Target company profile (e.g., SMB, enterprise, global).
  • Service delivery strategy (e.g., IoT, in-house technicians, reliance on 3rd party service networks).
  • Alignment (or not) to a common technology platform (e.g., Salesforce, Dynamics, Oracle).

2. Addressing Key Selection Challenges

When a service organization undergoes a FSM software selection project, companies should utilize this as an opportunity to drive strategic change throughout the organization. Jolt Consulting Group recommends and follows a FSM software selection methodology most closely aligned with ITIL:

  • Service strategy is the driver.
  • Service business processes support the strategy.
  • Technology supports the service business processes.

Service companies should first start at identifying the high-level business strategy, then proceed with progressively more levels of granularity and detail in terms of business process and requirements definition. Jolt Consulting Group also recommends that this process is well defined, rigorous and comprehensive to identify and evaluate prospective FSM software solutions to ensure the best opportunity for success.

2.1 Service and IT Strategy Alignment

The service organization must first define its strategy, future vision and objectives. For example, what is their current and desired future state for:

  • Core value proposition and how to differentiate from competition.
  • How to enhance the customer experience. • Growth objectives? Organic or via acquisition?
  • Expansion into new industries and/or geography? • New service offerings in the future.
  • Prevalence and complexity of service contracts.
  • Use of 3rd party service providers, and if so, increased or decreased use of in the future?

Screen Shot 2020-09-02 at 10.22.48 AM.pngAs part of this discussion, the overall company and underlying IT infrastructure and strategy must be considered. Figure 2 details the most common service organization software systems and their core functional areas. As the figure shows, there are multiple systems that can accommodate the core areas of service delivery.

Three fundamental and critical service IT strategy decisions must be determined early in the selection process as they are fundamental to selection.

  1. The first decision is if the company desires a common platform across all (or the majority) of the software applications required to run their business. As an example, does the company desire a Salesforce, Oracle, Microsoft or other platform as its’ common infrastructure, that would in turn narrow the FSM alternatives? The alternative to the common platform is a best of breed approach in which the company desires the best FSM solution for their needs, regardless of technology footprint on which the solution is based upon.
  2. The second key decision is whether an on-premise or cloud based FSM solution is preferred. More and more organizations are embracing cloud deployments as their preferred alternative, regardless of how the software is ultimately licensed.
  3. The final key decision is to identify the system of record for the core records managed within the enterprise. For example, ERP platforms and most service management applications can act as the system of record for inventory management and valuation, but which is going to serve as the master system or record?

Each approach and the answer to the three questions has advantages and disadvantages that can only be determined at the company specific level and no one approach is best for every company.

2.2 Future State Processes and Detailed Requirements

The results of company strategy and the answers to the service IT strategy questions will significantly influence FSM software requirements and options. The next step in a selection process is to develop detailed, future state business processes that will enable the service organization to realize its strategic objectives. It is important to note that the company should focus on the desired future state and bestin-class approaches; the what “can be” versus the current state.

Screen Shot 2020-09-02 at 10.25.42 AM.pngOnce the future state business processes have been defined, a set of detailed requirements based upon these future processes and service IT strategy should be developed. The requirements should be company specific and in sufficient detail to rigorously determine if a FSM solution will meet those requirements. An extract of service contract requirements is shown in Figure 3. A typical requirements list will be 400-500 in number and span 12-15 categories such as:

  • Work Initiation / Scheduling
  • Resource Management
  • Service Contract / SLA
  • Inventory Management
  • Collaboration and Knowledge Management
  • Mobility
  • 3rd Party Network Management
  • Customer Portal

2.3 FSM Software Evaluation

The future state business process and requirements are the building blocks for the evaluation of FSM software vendors and a selection process; whether this is working with one or few select vendors or via a more formal request for proposal (RFP) process. It is important to note that regardless of the selection process, Jolt Consulting Group recommends that service organizations:

  • Provide the future state business process and requirements to the FSM software vendors.
  • Require the FSM software vendor respond in writing to the requirements.
  • Develop and utilize company specific and detailed demonstration scripts.
  • Evaluate the total cost of ownership.
  • Evaluate future product roadmap and strategy.
  • Contact references with a similar profile (e.g., industry, use cases, size).

FSM software vendors should be given the future state processes and requirements for two primary reasons. First, this information will provide visibility and information to the FSM software vendor of the specific needs of the organizations. Many times, FSM software vendors do not receive this level of detailed information and are left to their best guess of what the service organization desires; all of which leads to confusion, wasted resources and time delays during an implementation project. Another common outcome is that FSM software companies will self-identify they are not a good fit and remove themselves from consideration allowing the service organization to focus on those companies that are a potential fit. Second, the service organization should request the vendors respond in writing how their solution meets (or does not meet) each of the specific requirements allowing for an easier evaluation of the vendors. The vendor’s requirements responses can also be affixed to a contract set and / or referred to throughout the course of an implementation project.

Screen Shot 2020-09-02 at 10.29.24 AM.pngCompany specific and very detailed demonstration scripts should be developed to represent the critical use cases and requirements of the service organization. These scripts should be followed by the FSM software vendors during demonstrations and is another primary mechanism to evaluate the vendors. Figure 4 is an example of a demonstration script.

A critical component of any selection is cost and the service organizations should evaluate the total cost of ownership (TCO) of the solutions over a five (5) year period. The TCO should include costs of:

  • Licensing, implementation and maintenance.
  • Any required 3rd party software.
  • Server licensing for hosted solutions.
  • Hardware for on-premise solutions.
  • Training.

Service executives should thoroughly investigate not only how the FSM software provider can address their short term specific requirements but also the fit of a partnership, i.e., if FSM software provider’s future focus (product roadmap, strategy) will support their long term specific company needs. Organizations must feel comfortable that their company profile (size, requirements, industry, etc.) is part of the FSM software vendor’s core strategic customer and product base in the future.

As a final step in the evaluation process, service companies should contact and speak with multiple FSM software vendor customer references. Ideally, these discussions would be on-site at the reference customer allowing a first-hand viewing of the FSM solution in action and typically allows for a more open and productive evaluation of the reference.

3. Conclusions

Service organizations are recognizing that providing superior customer service is fundamental to increased customer loyalty and profits. As a result, service companies are increasingly investing in FSM technologies. It is critical that service companies select the right technology for their business the first time as FSM software has a direct impact and effect on their customer’s experience.

The FSM software landscape provides an overwhelming number of options and is rapidly changing due to acquisitions and investments in the FSM software space. This is causing challenges to identify and select the most appropriate FSM software for a company’s specific needs and objectives. Utilizing a FSM software selection methodology based upon aligning the service and IT strategy first, coupled with a rigorous and comprehensive analysis of FSM software vendors, allows a service organization to address the key selection challenges and to uncover the important differences between the FSM software solutions.

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