Knowledge-centric service scenarios
In the third of four deep dive features where we explore the four service scenarios Gartner defined as being dominant in field service across the next five years we look at knowledge-centric service scenarios…
Defined by Gartner as a model where the ‘Service provider has protected IP or access to closed parts of equipment or systems’, the knowledge-centric model is one that potentially could secure long-term business for the OEM (Original Equipment Manufacturer) or service provider but also runs the risk of alienating a customer base.
One of the benefits of adopting a knowledge-centric model that is based on proprietary systems is relatively straightforward. In doing so, the OEM or service provider can lock out the potential threat of being replaced by a competitor. This could, however, be something of a double-edged sword.
For the OEM, looking at an asset and spare parts perspective, it, of course, makes absolute sense. Spare parts revenue, in particular, has suffered from the ability of competitors to look at components and parts, retro-engineer them and offer them for a fraction of the cost of OEM parts.
Such replica parts may originate from less regulated areas and are potentially made with lower-quality materials which, if installed, can invalidate a warranty. While this is a totally understandable stance for the OEM, such conversations only result in friction and a widening gap between the customer and the service provider.
Of course, the company providing the replica parts also do not have to factor in the R&D costs that the OEM would as they are essentially copying the work already undertaken, so even if they were to use the same materials, they are still often able to offer parts at a lower rate and retain a better margin than the OEM.
This is a critical area of revenue bleed that OEMs must tackle head-on, and introducing some layer of a knowledge-centric model, where proprietary knowledge becomes an equal or greater element of their value proposition than proprietary parts, could help combat the hemorrhaging of spare parts revenue.
However, if approached too clumsily, a knowledge-based model that focuses heavily on proprietary knowledge, which guards insight too fiercely, could cause friction between the service provider and their customers. So it is an area where a delicate touch is required.
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"This type of culture, when permeated across a business, will result in consistent, iterative gains in the key metrics that define efficient service operations..."
There is only one aspect of the knowledge-centric model, however.
Those organisations that adopt a knowledge-centric model would be wise to emphasise to their customers the insights and value locked within the knowledge they have within the organisation and the importance of being able to transfer that knowledge to where it is needed quickly and effectively.
In a world of rapid digital transformation, such knowledge transfer can be powerfully delivered through new technologies, allowing the knowledge centric-organisation to move quickly to more advanced service strategies,including outcome-based service, as shown in numerous case studies to generate longer and more profitable service contracts.
This approach would also allow a service organisation to differentiate their service offering as an industry-leading level of service, which can be a hugely effective tool in attracting new business in services and products.
A fantastic example from the consumer world of how knowledge can be a crucial differentiator and sophisticated marketing tool would be Apple’s Genius Bar approach – something that can and has been adopted by field service organizations that put their market-leading knowledge at the heart of their brand.
Indeed, the risk of failing to demonstrate that your service engineers have deep-level subject matter could potentially cause significant adverse reputational harm. Ultimately, demonstrating knowledge and expertise isfundamental to establishing trust and putting the customer at ease that the maintenance services carried out will align with vital essential areas of concern for all companies, including health and safety and cyber-security measures.
One of the significant challenges of emphasising the value of a knowledge-centric operating model is that it is far less tangible than other models we have discussed, such as an asset-centric model. This is why allaying genuine fears the customer may have in these critical areas can be crucial in re-enforcing the value offered when working within a knowledge-centric scenario.
However, it should also be noted that the knowledge-centric service organisation is well-positioned to face some of the critical challenges our industry faces in this current period of disruption.
One of the biggest challenges we are seeing in all segments of the field service sector and every area of the world is the challenge of a field workforce shortage.
With the majority of field service organisations facing a significant issue with an ageing workforce, those organisations who have yet to make moves to centralise their insight into easily distributed knowledge banks will undoubtedly now find themselves in a very precarious position. As each year passes, more and more tribal knowledge is walking out of the door and leaving the business forever.
The knowledge-centric service organisation will already be working to mitigate this issue, and this could be a substantial competitive advantage in just a few short years.
Finally, as we continue to focus on the internal benefits, a knowledge-centric approach also allows the service organisation to uncover hidden inefficiencies within the business. Indeed, the focus on expertise will invariably drive a culture of continuous improvement, leading to consistent refinement of processes and technology-driven from all directions within the business.
Precisely this type of culture, when permeated across a business, will result in consistent, iterative gains in the key metrics that define efficient service operations such as first- time-fix rates and technician utilisation.
So while there are some potential pitfalls to avoid within the knowledge-centric service scenario, there are also many significant benefits to be had if executed effectively.
In summary, if an organisation were to take a knowledge-centric approach to field service, they should consider the following:
- Where are they seeking to protect their Intellectual Property – physical, digital or experience?
- In doing so, what is the risk/reward ratio in terms of customer perception? Can the value add be clearly outlined, or do they risk potentially alienating the customer?
- Do they have the capabilities to deliver insight based on asset data more effectively than their customers could? Can they transfer that insight where it is needed most in an effective manner?
- Is leveraging the knowledge within the organisation enough to be a standalone model, or is it something that sits more comfortably within a broader model?
- Can they leverage tools like self-help knowledge bases, customer portals and remote support to monetise their knowledge effectively?
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