More service organizations are outsourcing work to an increasingly complex network of dealers, third-party providers, and independent contractors as the struggle to meet increasing service demands without expanding their own internal resources. While outsourcing is nothing new in the service industry, the nature of these partnerships is changing – and so is the technology used to ensure outsourcing is successful.
In our webinar, “What Every Service Executive Needs to Consider When it Comes to Field Service Outsourcing,” Astea and The Service Council have outlined some of the key strategies and technologies that service organizations should consider when developing their outsourcing strategies. The Service Council also presented data from a recent outsourcing survey that gets to the heart of why companies are outsourcing service, and how they are going about doing it. First, there has been an increase in demand for service as customers purchase more equipment, hold on to it longer, and expect more from their service provider. At the same time, there has not been a corresponding increase in resources to meet that demand.
A large part of the problem is a lack of technicians in many markets. According to the survey, 70% of respondents said they expect to face a labor shortage over the next five to ten years. That makes it difficult to provide coverage in certain geographic regions, and can also make it challenging to adjust the workforce to accommodate fluctuations in demand. As a result, just more than three quarters of respondents said they were already having some work done by third-party partners, primarily to increase their coverage (63% of respondents), increase flexibility (56%) or to reduce labor costs (44%). They are spreading that work fairly evenly across a mix of third-parties, local service providers, independent contractors, and dealers. Independent contractors or contingent labor will be an increasing part of the mix moving forward, as will third-party organizations that serve as hubs for dispatching work to these types of technicians.
“With volume increasing, there are going to be more and more opportunities for partnerships in terms of service delivery, and we will see a reduction in the number of actual traditional employees,” said Sumair Dutta, chief customer officer at The Service Council. “If you aren’t thinking about this already, you should be.”
As companies rely more on partners to handle some share of their service work, the need for visibility and connectivity is only going to grow. Hiring third-party providers requires accountability and the ability to monitor and manage the partner’s performance. But maintaining visibility into a partner company’s operations can be exceedingly difficult. That’s why establishing connectivity across the service organization is even more important in outsourcing situations. Service organizations must be able to quickly communicate information electronically to their partners and receive data back in real-time or near real-time in order to ensure customer service levels are maintained.
Third-party providers also need connectivity back into the primary service organization’s operations in order to schedule jobs efficiently, retrieve critical customer/asset data, and to communicate work order information back to the primary vendor. Field service automation solutions that can be extended to independent contractors or third-party service providers are an essential tool for establishing that visibility and connectivity. Using this technology, service organizations can automatically dispatch jobs to any technician in any service channel. If the technicians or partner company can use the solution on their own mobile devices, they can provide real-time updates on job status and work order resolution. This allows service companies to maintain visibility of each customer contact, and measure the performance of their outsourcing partner.
Establishing metrics (such as SLA compliance, first-time fix rates, resolution time, etc.) to measure the success of outsourcing is a critical part of a successful program. According to The Service Council’s data, the top performing companies who have had the most success with outsourcing are much more likely to use performance metrics to determine the quantity of work given to the outsourcing partner, and to determine whether the relationship will be renewed. Top performers also share demand forecast data with their partners, share performance data for benchmarking, and offer exclusive training and support.
For more information on field service outsourcing and the technologies and strategies required to establish successful partnerships, you can access the webinar here.