Firstly, in an industry that has been going through a spate of acquisitions over the last two years, the amount was quite simply eye-watering and just blew everything out of the water. Secondly, this was an acquisition that came right out of left field. Many analysts may have predicted that ServiceMax would eventually be acquired having been the industries biggest success story, but few would have suggested that an industrial force such as GE may have been the suitor that would become their new home. Kris Oldland, Editor-in-Chief, Field Service News, spoke exclusively to the senior players at both ServiceMax and GE Digital to find out how things are bedding in…
When the ServiceMax from GE Digital train rolled into Berlin towards the end of last year for the European leg of their series of Maximize conferences, there was an exciting mix of vivacious confidence between the ServiceMax team and keen curiosity and anticipation between the delegates – who were in the main ServiceMax customers.
Of course, this was to be expected – as it is at such events that ServiceMax have traditionally announced their latest developments and outlined how they had refined their roadmap. In past iterations of the conference, we’ve seen ServiceMax announce a number of industry firsts including the announcement in 2016 of Field Service Connect – which essentially established a blueprint for the role field service management systems will play in our sector adopting IoT that is being mirrored by a number of their peers.
And that’s not to mention the little matter of GE Digital’s acquisition of ServiceMax for an incredible $900Bn which was announced just days after 2016’s Maximize Europe event in Amsterdam.
With just over a year having passed it was a perfect time to see how well embedded ServiceMax had become within the GE Digital machine, and just how much such significant investment had changed their vision for the future of both their organisation and of field service delivery itself.
Having spent a lot of time with Yarnold and his senior team over the last few years, one thing that has always come to the fore was that there was an inherent understanding of what excellent service looked like, and the ServiceMax vision was always about trying to develop the tools to make meeting standards of service excellence that much easier.
I recall speaking to Yarnold in 2016 about the ethos of the company, and he explained then how they felt that most of the technology in the Field Service Management sector was geared towards taking cost out. What they realised very early on into their journey to becoming a leader within the industry was that there was a critical emerging trend – companies who were building products were experiencing much faster growth in the services side of the business than the product side.
We focussed on helping companies to grow their service business as opposed to squeezing their technicians for more productivity – which is still where most of the technology in our space is focussed
Of course, this approach has become widely embraced by most of ServiceMax’s peers as solution providers realise that most companies now have at least one foot planted firmly in a service-centric world and as concepts such as servitization and outcome-based services go mainstream.
However, while there is no denying the prescience of Yarnold and his team’s approach, until last year they were always just an observer of trends within the field service sector, only experiencing them indirectly via how they impacted their client base. But now as part of GE, an organisation that has something upward of 40,000 service engineers in various different divisions and across multiple sectors globally, they now have a direct line into a wealth of field service directors that are all on the same team.
I was curious as to what if any impact this would have on ServiceMax regarding how they position their worldview on what great field service looks like. In his opening address early that day Yarnold had touched upon shared learnings – so was it a case of their previous assertions being validated? Or was there an element of identifying essential details that could only be seen when one is embedded that little bit closer to the actual coalface?
“It is a bit of both” responds Yarnold. “We are part of GE Digital which has the Predix platform and then these application areas APM and ServiceMax, and we are separate from the rest of the GE business which are the industrial business units such as Oil and Gas, Power Generation and Healthcare and so on. Each of those business has their own field service operation, and each of those businesses is rolling out ServiceMax. So we’re not part of the organisation, but we have the home team there to draw on.”
To bring this message to life Yarnold recounts how before the acquisition Sharma, who at the time was the CIO of GE’s Oil and Gas business had been a somewhat challenging customer, but once they were on the same side of the table the value that ServiceMax brought to the table was revealed to actually be hugely valued. “I do wish he’d maybe told me a bit sooner” Yarnold said playfully which brought a warm laugh from Sharma – and in this brief exchange, the camaraderie and trust between the two were immediately brought to the fore, something usually found within relationships built on a mutual respect.
It’s been a good balance so far, and we’re just starting to tap into that knowledge of those industries and the vertical specific complexities of those industries. It keeps things fresh and challenging, but that’s what we want. We want that challenge
So would it be fair to assume that given this additional stream of insight there maybe a change to the roadmap that ServiceMax has outlined for themselves? Kasai picks up this point. “I think you outlined it well when you positioned it as an expansion” he replied when we tackle this topic.
“Both being part of the wider family of GE but also the massive investment is a much needed, as we really need to expand our portfolio into new markets and new capabilities. We’d always made a conscious effort not to go into many of these industries for a variety of reasons, but largely from a focus point of view. But now we have I believe, a solid competitive edge from a channel point of view with great customer relationships. We have an understanding of the domain within those industries, and it would have been tough just to walk in and grow that knowledge. Thirdly, we have the capital to go ahead and invest in the development of the products to actually develop those capabilities for these industries. It is a combination of these three things which essentially makes a brand new company – there is so much potential and that what we’re all really excited about, where do we go next?”
It is interesting the Kasai mentions how the new environment in which they find themselves in is in many ways akin to being an entirely new company. It brings back recollections of another previous conversation with Yarnold the day the acquisition was announced. “It is not the start of a new chapter; it is the start of a whole new book” he had commented, which is a strong analogy, as this latest incarnation of ServiceMax is indeed a distinct creature than that which has come before. However, likely any great novel within a series, the fundamental aspects of what made it a best-seller in the first place must remain in place. To extend the metaphor to its very limits, there must be a familiarity and continuity in place if it is going to build on the successes of previous in the broader in the ongoing saga.
In other words, ServiceMax as part of GE Digital must build upon the strong foundations that are already in place. Yet, for such a substantial investment, they simply have to evolve as both Kasai and Yarnold suggested. However, it seems that this is something that is very much already starting to happen as the ServiceMax team becomes plugged into the broader world of GE.
Such cohesion and deep level insight will not only drive the functionality of ServiceMax forward hugely but by doing so will also raise the bar for the industry as a whole.
It is this type of integration that many of the analysts within the industry (including myself), hoped to see emerge when the acquisition was announced. As such cohesion and deep level insight will not only drive the functionality of ServiceMax forward hugely but by doing so will also raise the bar for the industry as a whole.
It was undoubtedly one of the most interesting aspects of the acquisition that I discussed at the time in that there is vast potential for the further development of important solutions when a major player such as ServiceMax is embedded within an organisation that has such a fine-grained level of knowledge of delivering service, rather than being swallowed up by just another major software house that many would have expected.
Yet for the full value of this to be played out there has to be a true ebb and flow of dialogue between ServiceMax and the wider organisation – something which Sharma indicates clearly exists. “We attack things together, working with the platform team, ServiceMax and ourselves, on an integrated asset model of the future. We are talking about working within large-scale operations and exploring how do you augment and drive participation? It is a great way to valid test or experiment with a capability, and we give instant feedback.”
We have the fortunate situation where we have a very large-scale service organisation as a captive audience, and we have an organisation that’s capable of delivering these great capabilities to these organisations.
Of course, the most visible return on GE’s investment so far, certainly from a product perspective, would for most people in the industry be the close integration between ServiceMax’s Connected Field Service suite and another of GE Digital’s offerings, Asset Performance Management (APM). As we’ve covered previously in Field Service News, the combination of these two tools pushes us with far more certainty than ever before into the world of IoT based field service. So is this a clear indication of the direction that both GE and ServiceMax see as the future of field service delivery?
“I think what the move to predictive really does is that it puts everything on your terms,” comments Yarnold. “You’re planning ahead of time; you can predict who is going to go where with a high probability of success. This will, of course, increase efficiency but it is also a huge value add to the customer – you’re in a position to now delight them, because the right people are showing up, they know the history, they know what is required and so on. I just think it changes the model entirely.”
“Outages are needed, machinery gets worn out” adds Sharma, “the question is how can you replace these in a planned way because when it’s unplanned, that’s where really bad stuff happens. The notion that is important to me is about focusing on getting to almost zero-unplanned downtime. That is where I think the industry is going to head.”
As Yarnold had expressed to me previously, it seems clear that there are kindred spirits and a shared DNA somewhere between the two organisations, and most certainly a shared vision for the future of field service. In terms of their influence on the wider market both ServiceMax and GE have played a role in getting us to where we are today. How far they can continue to push the field service sector forwards as one cohesive unit remains to be seen, but the early indications would suggest that they will remain at the vanguard of innovation within service delivery for the foreseeable future. As each of Kasai, Yarnold, and Sharma commented at various points across our discussion – it’s all hugely exciting.
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