Minds and Machines

Minds and Machines

Sep 14 • Features, Software and Apps • 1134 Views • No Comments on Minds and Machines

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It has now been ten months since GE Digital acquired field service management solution provider for a cool $915 Million. Even against a backdrop of constant M&A activity within our industry, it was a deal that made the wider world sit up and pay attention to the field service sector. But how have ServiceMax slotted in two the GE Digital fold and how big a part will they play in GE’s vision of how best to serve the industrial markets of the future?

Kris Oldland, spoke exclusively to Scott Berg, COO, ServiceMax just before he participated in their first major outing as a GE Digital company at the Minds and Machines conference…

With the Minds and Machines 2017 event just days away it was an opportune time to reconnect with Scott Berg, COO of ServiceMax.

The last time I spoke with a member of the senior executive team at the Californian based Field Service Management Solution provider was when I spoke with their CEO Dave Yarnold, literally a few hours ahead of the announcement that ServiceMax was being acquired for a figure just shy of a Billion dollars by General Electric (GE) and would become part of their expanding GE Digital portfolio.

And whilst field service management is undoubtedly a hot ticket for investment at the moment, with the list of acquisitions within the market being a veritable who’s who of FSM vendors including ClickSoftware, ServicePower and IFS amongst others, nothing has come even close to matching the size of deal between GE and ServiceMax.

But has that ability to rise to the challenge been hampered or enhanced whilst being taken under the wing at GE?

But then no one in the field service sector has really come close to matching ServiceMax in terms of their success story across the last decade either – growing from a three man start-up in a rented office in San Francisco to an industry leader worth close to a Billion Dollars within ten years takes some doing, yet when I spoke with Yarnold back in November last year, it wasn’t achievement I heard in his tone, but yet further ambition.

He talked excitedly about the reasons why he had decided GE could be a suitable home for ServiceMax, outlining hugely ambitious plans to work with GE to build out a working IT platform for entirety of the industrial sector, something that connected people, assets and workflows together to drive business forwards in the twenty first century.

Indeed, it is often hard to not get caught up in Yarnold’s enthusiasm, and sometimes the trick is to separate the passion from the plans, the hyperbole from the reality – although in fairness he and the ServiceMax team do tend to have a habit of meeting the ambitious plans he puts forward.

But has that ability to rise to the challenge been hampered or enhanced whilst being taken under the wing at GE?

Just ahead of the Minds and Machines conference is a great time to sit back and assess that question, whilst Scott Berg, is perhaps the perfect barometer.

The big news for us is the integration between the ServiceMax Field Service Management (FSM) Solution and Asset Performance Management (APM) within the GE portfolio

Like Yarnold, Berg has been on the ServiceMax journey from Day 1, and whilst he undoubtedly shares much of Yarnold’s passion not just for their product but for the service industry at large as well, with Berg one also gets the feeling that, that passion is tempered just a tad by a keen analytical mind, that is acutely aware of not only the size of the opportunity but also the size of the challenge, and as Chief Operating Officer, it is his job to overcome that challenge.

As such he is a perfect foil for Yarnold, the two compliment each other well, (in fact that is trait that seems to be apparent throughout the whole ServiceMax family, there is a shared ‘something’ in the DNA and it seem that at all levels the team members feed well off each other) so who better to discuss how the integration with GE has progressed and whether the roadmap for Servicemax as part of GE remains on a similar course, to that which Yarnold described?

“This is really the first opportunity for us to be a GE Digital company and showcase some announcements of what we are planning,” explains Berg when we catch up to discuss what we can expect to come out of the event.

“I think this is the first time that we’ve made a public announcement where people can start to see some of the synergies across the GE Digital portfolio and the big news for us is the integration between the ServiceMax Field Service Management (FSM) Solution and Asset Performance Management (APM) within the GE portfolio. It’s big news and I think it’s a first proof point around GE’s thinking around the Industrial Internet and what role services and assets will play within that world.”

Indeed, when ServiceMax launched their Connected Field Service offering in the beginning of last year the vision was very much to bring the install base to the forefront of an FSM system, rather than just being focussed on the mobile workforce – which had traditionally been the primary focus of industry tools to date. Connected Field Service of course leveraged IoT, and from my limited understanding of AMP this was a solution that could build on that?

If you think about our field service strategy it was about getting data from the machine and the asset. Basically, letting the machine become the sensor rather than the customer being the sensor when something goes wrong

“Yes, it is a really interesting evolution on the concept,” Berg says helping fill in the gaps of my own understanding.

“If you think about our field service strategy it was about getting data from the machine and the asset. Basically, letting the machine become the sensor rather than the customer being the sensor when something goes wrong.”

“That is still very much part of the on-going strategy, what APM adds to the process is a significant amount of additional intelligence around preventative maintenance.”

“The concept has always been about avoiding unplanned downtime and in terms of providing preventative maintenance there is a rapid evolution going on where we are moving quickly from interval based maintenance i.e. perform this maintenance every 6 months or a year, to condition based maintenance – which is perform maintenance every 1,000 cycles of a machine. But now with APM combined with IoT we basically have data from the machine itself, embedded into a sophisticated analytics engine in APM, combined with the finance and the strategy to optimally operate an asset and to do so in the most profitable manner.”

“So what APM adds, fed by this IoT data, is basically recommendations and intelligence of when maintenance should most optimally be performed. For example right now, or next week or next month. It can even do things like suggest the maintenance shouldn’t even happen at all. It may be that the best strategy and profit outcome on a particular asset would be to let it burn out its useful life – it might be more profitable to replace it than it is to make the repair. And if so that is what APM will suggest.”:

“It is an evolution in the concepts around maintenance. From interval, to conditioned and now to predictive analytic schedules. And when combined with the power we already had in ServiceMax, which was taking this IoT feed from the machine and suggesting when service can happen, it becomes a very powerful tool indeed.”

One thing that is of particular interest with APM is how the solution can work from fleet level through to sub-component level.

“We are definitely down at the component level now if we look at the areas such as the Power industry or Oil and Gas – vibration sensing, the speed things are rotating at, the temperature of bearings and how do those factors impact performance behaviours or how do they impact output or throughput of a machine. It could be the volume of fluid passing through something, It could be on a grander scale, the level of power production from a thermo-nuclear plant that is converting fossil fuels to electrical output,“ Berg explains as we discuss the importance of being able to see the health of various levels of both components and assets.

I think one of the big struggles people always have with IoT is that they basically drown in the data. You’re being sent all these readings but how do you make sense of it?

“But, the important factor with APM is that it can also can apply it to systems of assets as well. You could have a situation where you have multiple assets, each with sub-components and you want them all performing hopefully in unison – or at least in tandem, to produce an overall outcome so you can ‘zero’ in on where maintenance should occur to optimise the output. It could be on one asset , it could be on one sub-component of an asset.”

Essentially this is perhaps where APM can deliver the most value, in helping make the vast streams of data from assets connected to the IoT, truly useful.

As Berg alludes to when he comments: “I think one of the big struggles people always have with IoT is that they basically drown in the data. You’re being sent all these readings but how do you make sense of it?”

“What APM does is make sense of that data in light of maximising the uptime and the output of an asset and its components. It’s that added layer of intelligence that IoT on it’s own doesn’t have. It’s making that data useful essentially,” he adds.

Of course, one of the big benefits of FSM tools such as ServiceMax is allowing the service organisation to empower their field service technicians by putting such rich layers of customer information, ultimately being able to put the core intelligence of the organisation itself, into the hands of the field service technician.

Given that the integration between ServiceMax and APM is geared towards increasing the efficiency of preventative maintenance strategies, I was intrigued to see how much of this intelligence would be filtered down to the engineer. For example if he was on site fixing asset A would he be able to see that in fact Asset B was due to for maintenance in the next few weeks and therefore potentially undertake the second maintenance job whilst on site to save an unnecessary future truck role?

“I think that layer of insight is there on two different levels,” Berg responds when I put this point across to him.

“From a back office standpoint certainly, APM will suggest maintenance should occur on machine number one based on a threshold that’s been reached, but more importantly than that, it will also look at the fleet of the assets and see anything else that is approaching that same level of wear and tear (or that same maintenance condition) and alongside what we’ve already created within Connected Field Service – where we are pushing that machine data down to the technician, we can use our install base management capabilities to identify the fleet of assets that are at his location and highlight those near the warning condition or those that would approach it soon.”

One interesting if indirect result of giving the technician this level of insight is that by being able to relay such information to the customer, he can also reestablishes the importance of the maintenance visit in the first place

“This data can then be fed to the technician who can make recommendations whilst on-site with the customer to say ‘well I’m here for pump number six but whilst I’m here I can see that also pumps number three and four are in a similar condition so I’ll go ahead and fix those in advance, or perhaps even explain to the customer “well, this one I’m going to leave run as it is for a bit longer because the recommendation is to push this a little bit further before we do the maintenance activity, to allow you to get maximum output.”

One interesting if indirect result of giving the technician this level of insight is that by being able to relay such information to the customer, he can also reestablishes the importance of the maintenance visit in the first place.

In today’s markets as we see companies moving to outcome-based services and preventative maintenance strategies in ever greater numbers, there is the new challenge of the workload of the technician perhaps going unseen by the client. In the old traditional break-fix model there was the theatre of the service engineer being the superhero, coming in to rescue the poor Ops Manager who has had to put an exasperated call in to say – “Hey! I can’t produce anything!’ Then the engineer comes in, meets his SLA and makes everything work again. Going above and beyond and generally being a hero.

In today’s world of outcome-based contracts there is a challenge to make sure you are effectively communicating the work your technicians have done for the client, to demonstrate the value your service provides them.

With the tools Berg is discussing, it seems there is the potential to almost move the engineer into something more of a consultative role. Someone who can say I’ve come to undertake the maintenance on ‘a,b,c’ but I can also advise you that ‘x,y,z’ could be also be done today and this will improve your output by ‘n’.

“I think there is a great opportunity here to improve the lifestyle of the technician themselves,” Berg comments as we bring the conversation onto this point. “Sure, there is the heroic experience of saving the day but that is also a high anxiety moment as well. When we consider the psychology of the technician, the challenging bit is to go out there by yourself, with no one to help you, then when encounter a really bad situation hopefully you’re the one that can resolve it. It can be a life with a lot of tension, which is sometimes overlooked.”

“Alongside that I also think that customer expectations are shifting as well,” he continues.

There is the classic metaphor that people don’t want to go out and buy a drill they want to buy a hole and the concept is largely about outcomes

“There is the classic metaphor that people don’t want to go out and buy a drill they want to buy a hole and the concept is largely about outcomes. I think more and more customers of the machinery don’t really care so much about the details of the machine. They don’t want it to break down, they want it to produce what they bought it for, and they want to extend and maximise its life so that it produces more of what they bought it for.”

“So now you put a technician in the position to not only be the hero by just fixing something retrospectively, but to be the hero that proactively maximises the customers output and production from an asset they acquired? I think that is not only going above and beyond but it is catering to more of the outcome-based mentality that companies now want to consume output rather than buy a set amount of machines.”

So it seems at least on the technology side of things there is already progress being made between the two organisations coming together, although it could be argued that this is the result of the two separate existing technologies just being plugged into each other.

The real fruits of the union are likely some way off, although how far could largely depend on how quickly and easily the ServiceMax team are integrating into the wider GE group. I mentioned Yarnold’s views at the time of the acquisition about the two organisations having a shared understanding and a similar DNA in terms of the view they both held of what ‘good service looks like’ – as well as the importance of service within industry as we move further into the twenty first century.

And of course, I was keen to see if that was holding out now the ServiceMax is fully embedded within GE.

“I think it is and I think it was very prescient of Dave to be highlighting that right at the start of us coming together,” Berg replies.

“There are several things here. Firstly, we’ve always served markets that I would largely classify as OEM manufacturers or industrial companies and certainly these are the companies and sectors that GE is already working amongst. As a direct result of that we are already seeing great energy and sales momentum by our alignment with GE business units around Oil and Gas, Energy, Power – as these were the industries we would have sold to anyway.”

I think with GE being largely a company and culture built around engineers, we have both shared an asset centric perspective on service.

“Secondly, I think with GE being largely a company and culture built around engineers, we have both shared an asset centric perspective on service. For us, it was always about a system of assets in the field that customers wanted outputs and outcomes from – we were never about being your typical field service, scheduling only solution. For us it was an awareness of the people, the schedule and the asset. And certainly GE‘s culture is grounded in engineering, machinery and assets – so we are on the same page.”

“The third thing that I think is interesting is that GE was one of our largest customers and if you look at GE as a company, I like to call it the largest field service company in the world. There are tens of thousands of technicians, and the vast majority of revenue at GE is derived from service contracts – so there is definitely a kindred spirit and a kind of alignment with GE because of these vertical focussed, asset centric mentalities. Plus then there is a shared passion for service which is such a big contributor to the GE business.”

Of course one would think that as one of their biggest clients, having the GE team on hand to add weight to their cause could also add some heavy kudos and gravitas at times that they need to call in the big guns.

In particular GE have been early adopters in the move towards outcome based models in a number of verticals. Is that helping the ServiceMax team when they go into conversations with prospective customers?

Of course, the move to outcome-based services is heavily tied to the use of the cutting-edge technology that ServiceMax provide, so it is in their vested interest to be avid promoters of such shifts in thinking.

But the reality is a move to outcome-based contracts can be a hard sell for service businesses to their own clients, whilst many still may need some convincing that a shift away from recurring spare parts revenue within the break-fix model is indeed the future of the Aftermarket sector.

However, having the back story of now being part of GE, who have already taken that path and who are able to say we believe this is the future because we’ve already gone out and done it in our own business, that must surely be a powerful tool when it comes to talking to those companies who are more reticent to make such a switch?

“This is actually one of the core themes at Minds and Machines,” Berg replies.

“The concept our chairman will be talking about is how our digital transformation at GE from an industrial company to a digital industrial company is really focussed on three different markets.”

“Firstly there is GE for GE, which is how we help ourselves go through this digital transformation towards outcome-centric models. Secondly, we have GE for Customers and this is looking at the business units which GE serves and the companies they sell to, and we want to help and advise them – sharing what we’ve learnt from our own experiences with them.”

“The final one is called GE for the World. What has been interesting with this and what has truly surprised me is the amount of times we’ve been speaking to companies who are traditionally staunch GE competitors, but they are curious about what we are doing.”

The whole idea behind this is to share the experience GE has had broadly around digital transformation of industrial businesses.

“The whole idea behind this is to share the experience GE has had broadly around digital transformation of industrial businesses.”

Given this experience and the broad touch-points Berg has access to I was curious to find out what his take on the shift to servitization was. Is it becoming as prevalent as it seems from behind my admittedly sometimes magnified field service lens? Indeed, are there many companies still in need of persuading that outcome-centric models are the best way forward, or has acceptance of the need to move towards servitized business models become widespread?

“It is interesting because I’ve yet to see much real push back on the concept,” Berg comments. “It is a as if everyone has come to accept that an outcome based model, i.e. a Service as a Product model – is the essential thing to do.

I think that value GE plays in those conversations is more geared towards telling these companies what is the first step to take on a journey like that. Sharing what our experiences have been, how we’ve done it and what our accomplishments have been.”

“It’s really interesting that in practical selling situations to potential customers one of the most impactful people we can bring into a scenario like that is someone like a CIO form one of the GE business who has made these investments, made it happen and can show you the results. I think the door is open but I think people are perhaps a bit confused as to how and where to start and that’s what GE can help them. We can outline how to start their journey and how best to stay on the right path.”

As we come to the end of our time together, a few things have become apparent throughout our conversation.

The first is that the technology seems to be a natural fit and combining ServiceMax with APM is a natural evolution, that is set to yield impressive results for those that are in place to put the two together.

The second is that Yarnold’s earlier prediction about their being a shared vision across the two organisations seems to be bang on target. As Berg explains their future plans to me there is a real sense not just of unity between the two organisations but also of continuity in terms of the original ServiceMax core beliefs that were so fundamental to their success.

However, one other thing that was apparent was the number of times Berg used the word industrial. This of course makes sense when we factor GE into the conversational mix – but one of the things that ServiceMax developed a strong reputation for pre GE, was for that every Sony, GE or Scheider they worked with – there were also the companies like Service2 – i.e. small local companies with less than twenty engineers.

Will SMEs still be of relevance to ServiceMax or will they be forgotten as ServiceMax under GE goes hunting for a place amongst the industries enterprise elite?

Will these SMEs still be of relevance to ServiceMax or will they be forgotten as ServiceMax under GE goes hunting for a place amongst the industries enterprise elite?

“I think the conversation has changed a little bit for smaller companies but in a positive way,” Berg responds. “The GE brand credibility is really helping us send a positive message to smaller companies. We continue to serve all those markets and in fact one thing you will see from us is an expansion in the market at this level.”

“We see three separate groups of customers, one is the OEM manufacturers which has been a sweet spot for our business, people that make complex machines, such as medical devices or heavy machinery.”

“One expansion will be in what we call asset operators so you could think of in that realm are the power producers. Electric and Oil and Renewables who basically don’t make anything, they buy a whole bunch of assets and then produce something. Then the third group would be one that we’ve always focussed on, namely the service providers and that’s where you get a lot of these smaller companies.”

“The really interesting thing is if you take any one of the seven or eight business units in GE and think of it as an ecosystem of something like Oil and Gas then certainly you could be talking to someone like Shell or BP doing oil exploration and production but as soon as you take a step back from the centre of that industry, that’s where those relatively smaller providers are really important. What’s really interesting is that they are also really important to the GE verticals as well because there is an ecosystem of those service providers working with a GE – or maybe competing with a GE but supplementing the value in that market. So we will continue to focus on those types of companies and actually a lot of the companies we’ve historically sold to in those spaces are aligned to the GE ecosystems anyway.”

“We really think that effective field service execution is a combination of people, assets and outcomes,” Berg offers in closing.

“I think that our integration into the digital portfolio combined with the GE business experience puts us in an incredibly unique position to not only help our clients manage their people but also to help manage their install base of assets and make this shift to this outcome-based mentality around preventative maintenance a less painful and more fruitful path to follow.”

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