How to Reduce Field Service Costs to Meet Optimization Goals
Field service organizations have long been implementing measures to reduce their high operational costs. In particular, technician dispatches are a huge drain on operating expenses when considering labor costs, vehicle expenses, and the opportunity cost of having technicians unavailable for revenue-producing activities. Field services may be tempted to optimize field service costs through various ‘quick fix’ methods, including:
- reducing technician headcount
- minimizing hours of service
- outsourcing to third-party contractors.
However, these measures often prove ineffective in the long term as they negatively affect the customer experience. Fewer technicians – or less skilled technicians – can mean longer time-to-fix rates or decreased first-time-fix rates, KPIs that notoriously frustrate customers. Instead, field service organizations should focus on the three key areas that have been proven to optimize field service organization costs over the long term while improving the CX.
Three areas proven to optimize field service costs
- Lower Volume – remotely or proactively address customers’ issues to decrease the need for truck rolls
- Shorten Time – help technicians resolve customers’ issue faster
- Optimize Staffing – make sure technicians are utilized as efficiently as possible
Techniques to reduce volume of technician visits
Here are several techniques that have helped many field service organisations reduce their technician dispatch rate, directly lowering their operational costs significantly.
Resolve more issues remotely
There are many fixes that are easy enough for an untrained person to carry out – with the right guidance. Enabling a remote or virtual technician to guide the customer toward a resolution without visiting their home is a model that has proven invaluable during the current pandemic. In fact, remote video support can be provided by technicians – even 3rd party technicians – working from any location: a back office, home (WFH mode), or vehicle (drop and go mode). Aside from optimizing field service costs by lowering dispatch costs, virtual technicians boost safety levels, improve first-time fix rates, and increase customer satisfaction.
Shift to performance-based SLAs
Many field service organizations are shifting to an operating model that focuses on performance-based SLAs, where the priority is keeping customer equipment running at all costs. According to a 2019 Gartner survey, 19% of service companies already offer these contracts, and another 26% expected to do so within 12 months. This often requires a greater reliance on automated remote monitoring tools and remote assistance tools, which ultimately translates into a hands-off approach that is so critical during today’s safety-conscious world. Aside from reducing the volume of customer issues, this model also simplifies contractual obligations for customers – instead of worrying about the details of service plans, the field service provider takes whatever steps necessary to avoid issues or resolve them as soon as possible.
Enhance collaboration with contact center
Contact center agents and field service technicians have traditionally been two separate departments. Enhancing collaboration between the two will enable field services to benefit from the contact center agent’s knowledge of policies, customer information, and product details, all essential information that helps resolve customer issues without dispatching a technician. Cross-department collaboration can be achieved by implementing shared knowledge bases, shared customer histories, and even joint triage, an ideal option when the customer service agent is unable to fix the problem but waiting for a technician to arrive on-site is not an option.
Utilize predictive maintenance
Predictive maintenance refers to the monitoring and collection of data on a product or service’s operational conditions so that companies can foresee possible outages or failures before they occur. This makes it possible to address any issues before they cause damage and require technician dispatches.
The rise of the IoT provides businesses with endless opportunities for real-time data-based insights that make it easier to predict when equipment or devices will fail and to provide proactive customer assistance. The cost savings when being proactive are clear. Studies show that unplanned downtime, which is caused 42% of the time by equipment failure, amounts to an estimated $50 billion per year for industrial manufacturers.
Techniques to optimize time
If each aspect of technician dispatches is shortened, it all adds up enabling each technician to accomplish more each day. Here are some tried-and-true methods of optimizing a field service technician’s time.
Improve scheduling with AI
According to an industry survey, 52% of companies still use manual methods for most of their field service tasks, such as scheduling and work planning. These manual activities almost always have a negative effect on time optimization, and therefore operational costs. AI technology overcomes these hurdles by automatically dispatching jobs to the right technician based on past history, skills, location, priority, tools, and availability. Gartner predicts that by 2025, algorithms and bots will schedule over 70% of field service work at automated schedule optimization-dependent field service providers, up from less than 25% in 2019 – a trend that will further help to optimize field service costs.
Shorten tech visits with remote expert support
It is not uncommon for field service technicians to need some on-site knowledge support while out on a job, whether due to a brand-new device he’s not yet encountered or troubleshooting an issue he’s not familiar with. Allowing the technician access to a remote expert enables him to benefit from prompt and efficient support that ensures the job is done right the first time. Quick first-time resolutions mean shortened time spent on customer site and less time spent researching the right solution.
Make knowledge easily accessible
Using technology to easily connect off-site field service technicians with in-office expertise and data can ensure faster and more effective service. Incorporating intelligent search functions into field service knowledge bases using machine learning can enable the knowledge base to learn over time to deliver the most valuable information related to the technician’s specific search query. It can also help prioritize technician’s knowledge based on individual customer data or history, allowing him/her to assist the customer faster without requiring manual searches or long wait times.
Techniques to optimize staffing
Each employee only has a certain number of hours in their workday. By optimizing how they spend those hours, a field service organisation is getting more work accomplished without any further expenses.
Enhance technician utilization
Technology Services Industry Association (TSIA) estimates the average technician utilization rate at just 73%. This means that technicians are spending too much time on non-revenue generating tasks, reducing overall business profitability. Working to raise your technician utilization rate allows businesses to get more done with less staff, impacting productivity, and profitability when the operational expenses are kept in check.
Assign the right technician to the right task
AI technology can optimize technician dispatches by automatically assigning tasks to the most relevant technician based on history, skills, location, priority, tools, and availability. For example, historical data can be used to determine the average time it takes a particular technician to complete a given task to identify the technician who can do the job fastest and which techs need additional training. Aside from resulting in a high success rate, this also frees up the company’s human resources for more strategic activities.
Increase collaboration with other technicians
Field service organizations, in particular, face the challenge of an aging workforce and the subsequent loss of knowledge. When technicians have knowledge gaps, they will experience a lower first-time-fix rate and a greater number of repeat visits. Enabling technicians to collaborate in real-time with colleagues who can augment their skills or expertise allows them to receive immediate assistance with field operations, eliminating the need for a followup visit.
Measurement is key
Optimizing field service costs is imperative, especially now, but whether financial goals are achieved by reducing the need for truck rolls, helping technicians resolve the customer’s issues faster, or ensuring technicians are utilized in the most efficient manner possible, the change must be continuously evaluated to ensure ongoing positive results.
Feedback can be collected regularly from staff as technicians are well placed to highlight any roadblocks or barriers to success. In addition, continuously checking technician and team performance levels with the customers they serve will ensure that the change has not negatively impacted service KPIs. Instead, do not be surprised to find that the changes have indeed optimized field service costs and led to a greater overall CX.