Over the last few years the business of producing management software for the field service industry has been buffeted by winds of change.  They have been swirling winds, attacking from all directions as the triple whammy forces of changing technology, users and the vendor landscape itself, have all had an effect.

Many of the traditional players – indeed the pioneers of the software – have disappeared; some swallowed up by larger players others just moved on to what they hope are slightly greener pastures. But does this mean the industry is dying out? That service managers will be bereft of a choice of suppliers or left trying to eke out a business with obsolete systems?

On the face of it there do seem to be fewer players - CS Group is now a recently grown consolidation, for example, of three of the best know players in the space.  One time greats of the market Servasure and Optim are now pretty much unheard of. 

But there are now probably more players in the space than at any time before and many of them are much more substantial than the niche, specialist players.  Established giant enterprise software companies like Microsoft, SAP and Oracle all offer service management modules.    Midrange players like Lawson and Infor actively address the space now. And a new breed of applications company which offer computing power almost as a utility as a web based service such as salesforce.com and Netsuite are also getting their hooks into the area.

The reason they do is quite simply because of money.  Service companies are now increasingly investing in management and control systems.  They have always recognised the importance of controlling cost in this area.   What is new and driving growth is the need to leverage the face-to-face human contact the engineer has with the customer; to empower them with information, to capture that information and to be able to exploit that information in the business.

But this is now a mature software sector and some would argue the required functionality is well-defined.  So, on what basis will the vendors compete for your business now?

But hold on, says Rob Parkinson, project director with Armstrong Consultants which specialises in service, you can’t dismiss system functionality from the competitive process that easily.  ‘Functionality is often the deciding factor and the specific details of the functionality are the key decision,’ he says.  He believes areas such as ‘end to end field service stock logistics,  tight, real time integration to accounts and stock control with effective stock control and recording, mobile solutions for engineers to eliminate paperwork, automated scheduling and renewals can all make a difference.

Jill Dixon, operations director at CS Group, agrees.  ‘Functionality is still a basic differentiator,’ she says.  But she admits there is more to it than that.  ‘If the vendor passes the functionality test there are further selling points which then come into play, such as complexity of set up and effective, standard integrations.’

The issue of integration with other systems is becoming key as the service department moves from being back room trouble shooter to front office business differentiator. To do this and achieve the new goals, it needs to communicate effectively with other departments.  This is where the enterprise vendors feel they have an edge.

Andreas Hellstrom, the industry director at enterprise resource planning (ERP) system company Lawson sees functionality and total cost of ownership as playing key roles and that is where integration scores. ‘Companies are looking increasingly to buy integrated solutions, thus reducing the cost of interface maintenance while at the same time requiring that the solutions offer industry specific functionality’ he says.  ‘A tightly integrated solution provides transparency of all areas of the business.’

Another vendor of an integrated system, Infor accepts that while a lot of functionality is common to systems there is still enough variation to make a difference but making the most of that difference is what counts.  Paul Heron, one of its business consultants for its service system BlueStream, says that the sale of a management system has effectively become a consultancy issue.  ‘When you recognise that 85% of SMS systems are pretty much the same, then the business consultancy really comes into play when assessing and identifying the 15% personalisation that's necessary in order to create competitive edge.’

Larry Laux, who heads up one of the leading specialist service management system companies, Metrix, doesn’t accept that functionality is the same but believes that advanced software technology helps in other ways.  ‘Even if all SMS were exactly the same in terms of functionality, companies would be differentiated by their proven ability to turn their functionality into a business advantage for their users,’ he says. ‘Using advanced technology to make your application easier to use and understand is one way of accomplishing this.’ 

This means that one of the key advantages, he believes, for the specialist is their domain ability. ‘Use consultants that are experienced within the industries and organisation-types where the majority of your user-base is. The differentiator would be a combination of the software and the consultant,’ he adds.

This “specialism” debate has been always been battleground for the best of breed versus the enterprise companies.  Mike Rand, the sales and marketing director of service software company Hamilton Hall, says he has watched the enterprise companies try to get into the sector for  20 years but says they have never succeeded because they are too complex to install and too expensive to buy.  But more significantly he opines: ‘They don’t understand the market and they have no market experts working for them’.

He says: ‘Companies prefer to buy from somebody who has a successful implementation in their market and the software may have been tailored for that market. We specialise in several markets so have expertise plus live sites; that’s a differentiator. Otherwise people buy from people and their professional approach and understanding of their requirements.’

So domain expertise is not just an expertise in helping field service operations but also in particular types of industry and also size of company within that community.    Ian Searle, the sales of marketing director of service system company VT Software, sums it up thus:  ‘The issue revolves around the ability to change a packaged application to reflect the specific needs of a customer,’ he says. ‘I believe it is no longer credible or useful to expect the customer to change their business processes to reflect the way the software works.  Indeed, it is these differences in customers’ business processes that can deliver a clear and definable business advantage to the organisation.’

He adds:  ‘Many packaged applications are built around a successful implementation for a competitor or for a company in a different industry.  It is, therefore, essential that the consultancy element of the engagement between the software vendor and the customer reflects the actual business need.  Functionality has become less relevant in that every specific implementation must include the functionality that the client actually needs.’

Underlying this is a change in the way software companies are charging for their services.  When software was king, licence fees were the currency and business consultancy was freely applied to oil the wheels. Technical director at IEA,  Neville De Mendonca, sees things differently now. ‘Business consultancy has always been key to the sale, although in the past it has been possible to offset the cost of sale in the solution margin,’ he says. ‘As solutions become more commoditised, it becomes more appropriate to separate the consultancy charge from the solution cost in order to retain profit.’

But, consultancy is not just a pre-sales affair. It is in the vendor’s interests to help the customer exploit the solution and that takes domain expertise. ‘It is the vendor’s business to support customers through the adoption process and they have acquired considerable experience in the process of change management for the successful deployment of these solutions which are skills that the customer is unlikely to have as they rarely install new IT solutions which are as wide reaching as a field service system can be, where as these successful deployments are crucial skills in the vendor’s portfolio.’

Rory Church, the sales director of Field Service Management – a specialist consultancy and agent for Metrix in the UK,  sees changes in the user community and the need for suppliers to adapt. ‘Service management has become a much more diverse process. Consequently the “one size fits all” sales approach is flawed and some element of business consultancy should be undertaken to ensure both the vendor and the customer have a clear understanding of the level of solution fit.’
 
His principal, Larry Laux agrees. ‘There are several tasks that are unique to a company’s industry, to their organisation or to their client base.   Many SMS applications don’t address these unique requirements, or only meet them partially. This is where functionality can be a differentiator. When an application’s functionality is either set-up to address these unique needs from day one, or can be customised to meet them, it can create a competitive advantage and a better return on investment for the company that deploys it.’

He also believes the market has matured to the point where the huge repository of knowledge and capability in with existing players makes it hard for any new player to emerge.  ‘Functionality also can be a huge differentiator in terms of barrier-to-entry. New companies coming into the SMS space will have problems developing the type of functionality of best-of-breed SMS companies that have been working in the space for many years,’ he says.

One of the key drivers of new investment has been the capability and accessibility of mobile communications.  This has allowed the free flow of information to and from the field – some companies have seen the promise of new technology and taken the opportunity to extend their office based systems.  For others it has shown up some limitations in their ability and their systems to deal with information in real time. 

Julie Purves, the managing director of mobile communications specialist B2M believes that communications can not be treated as an add-on.  ‘Integrated systems will become a “must have” over the next one or two years, as customers demand more from their mobile enterprise,’ she says. ‘Bespoke, built-in functionality does not provide the flexibility that will be required.’

She believes it is a similar situation to PC applications ten years ago. ‘They ran bespoke, built in applications, but very soon the requirement was for an integrated system. Exactly the same will occur in the mobile environment. And once again the key requirements for delivery of the integrated system will be a robust infrastructure, including mobile communications and effective management capabilities.’

To some extend though, service is no different in this regard to any other business area says Laux. ‘Without this demonstrated ability,  SMS vendors couldn’t compete with the generic ‘all-in-one’ applications.’
But can they compete?  Most observers expect the big ERP players to get even further into service, is this going to mean reduce choice for the buyer?  Parkinson believes it will improve products in particular encourage the best of breed to become better.  Church believes it might be more the other way round and the big guys should learn from the specialists. ‘Does bigger always mean better?  No, ‘ he says.   ‘The smaller specialist software company often builds a stronger relationship with customers and responds more directly. Unlike larger organisations there is no convoluted hierarchy to fight through and staff turnover is often not as high so personal relationships along with a high level of service can be maintained.’

Heron argues the case for the big guys. ‘Specialist/pure play SMS  systems do a brilliant job of maximising field service engineers’ productivity, but the critical success is managing the whole service business profitability. Only closed loop integrated service management systems (like BlueStream) can provide the necessary board level insight to the business's operations.’

Neville de Mendonca is more cautious. ‘Consolidation will present even more options for buyers,’ he says.  ‘Whether this is a good thing or not remains to be seen.’  
   
Of course buyers now also have a new option in their choice of both technical partner and delivery.  The ‘software as a service’ or on demand computing model is rapidly becoming established and has it eyes on the field service market.  In the second part of this article we look how this may shape the future of service management systems.