It is one of the most famous brands in the USA. From its humble beginnings as a mail-order operation it grew to be the largest retailer in America. Its landmark stores and hypermarkets, as well as the Sears Tower in Chicago, stand as testament to the success of retailer Sears.
Since its merger with Kmart in 2005, Sears Holding Corporation (the parent company) generates more than US $55 billion in revenues. With 13,000 field technicians, the retailer is the largest warranty provider in the US. It provides customers with maintenance and repair services for numerous products, including appliances, consumer electronics, gardening equipment, and heating/ventilation systems. As the largest warranty service provider in the country it manages a sizeable chunk of service transactions and warranty claims for its vendors, extended warranty providers and a network of service providers encompassing 285 servicing units.
Like many such large organisations, the company had experienced problems with its warranty management process. It had an outdated claims system, built in the days of the DOS computer operating system and designed primarily for banks and medical claims. The amount of warranty claims data Sears needed to manage was far too much for the system to handle, resulting in frequent crashes and data integrity problems.
Reject rates were also high and data mining was minimal at best. "We were running reports two and three times just to make sure the data was correct, and reporting had to be done primarily via spreadsheets," says its national director of claims.

Rising to the challenge
Faced with that challenge - developing its service chain and improving overall business performance - Sears began evaluating a replacement. The plan was to automate and streamline the entire process, particularly as the company was keen to expand the service business and grow its network of service providers without increasing the number of claims administrators. Not only that, but the firm also required a solution that could grow with the demands it faced.
"First and foremost, the new system needed to be flexible enough to handle our planned future growth," said its claims director. In addition, the company wanted to minimise the burden on its current IT staff, and deploy something that its end-users could easily operate. And it needed to be nimble enough to allow Sears to add new vendors easily.
Since ServiceBench had experience with
the appliance industry, it was prepared to address the appliance retailer's issues. Speaking at the time, a Sears spokesperson said that ServiceBench actually had by far the best return back and solution, because of its experience
with the industry.
After looking at the nine modules offered by ServiceBench, in 2003 Sears opted to use three of the nine, including claims recovery, dispatch, and claims modules. The claims recovery module (added in 2004) is used by the Sears National Claim Center (NCC) to manage claims with its vendors and extended warranty providers. The dispatch module is used to send service call requests to its network of independent service providers, while the claims module manages claims that have been sent in by the retailer's network of service providers.
During the run-up period, ServiceBench spent a large amount of time getting to know Sears' system, with its staff spending two months on-site with Sears' teams. ServiceBench almost became a business solution expert, according to a Sears spokesperson. It looked at where the industry was heading and helped Sears to move in that direction, he said.
"I believe that ServiceBench was selected for this task because we truly understood what Sears was trying to achieve in terms of after service care," says Chris van der Harst, managing director Europe for ServiceBench.
"ServiceBench was already heavily involved in processing warranty claims for many of Sears' biggest partners and had a strong track record in the world in which Sears was operating," he continues. "We created a business model that directly links our delivery of actual business value to the service costs incurred by Sears."
He adds: "Due to the extreme complexity and sheer size of Sears' business we had to work very closely with the group to ensure the ServiceBench solution exactly met its needs. It was also an important objective for us to reduce, rather than add to, the work load on the already busy IT department at the retailer."

Performance
According to research by the Aberdeen Group, Sears' warranty chain performance is now on par with best-in-class companies. The Aberdeen research showed that 84% of best-in-class service organisations are using warranty claims processing.
As a result of its deployment, Sears has reduced the time its takes to process a claim from a week to just one day. Best-in-class companies profiled for Aberdeen's study took 1.4 business days, on average, to process a warranty claim, putting Sears' performance in line with warranty leaders.
Significantly, Sears is processing twice as many claims using one-third of the claims head count. The company can now also add new clients to the system in a matter of minutes - this was a process that was previously lengthy and labour-intensive.
In addition, it is processing revenue from its field units on a daily as opposed to weekly or monthly basis. Data collection is more accurate and reliable. The company's reject rates have come down more than two-thirds and are now in the low single digits. Because it processes several million claims annually, this reduction represents significant revenue savings.
The situation is not static, however. Sears recently added a field service review. This tool enables its field service division to receive immediate notification of rejected claims and send information back to each respective field team. The teams are then monitored on performance and revenue targets, giving them further incentives to improve performance.
Most recently, the company has added a reporting, analytics and data mining tool, which aids reporting and data collection.
"In the past we could measure performance down to the district levels but we could not see the field unit performance levels or individual performance," says Sears' claims director. "Now tech managers and regional finance managers are using this tool to find out where specific problems are originating from and taking corrective action. We are just beginning to scratch the surface with this new application."
"The Sears contract represents a significant win for ServiceBench and a real endorsement of the robustness of our solution," adds ServiceBench's van der Harst.
"Since deployment of the Sears solution, we have continued to expand the services we provide to Sears. This experience and its proof of our solutions effectiveness has subsequently led to the solution being rolled out by other major customers, including large consumer electronics retailers and appliance and DIY retailers." SM

How ServiceBench works
ServiceBench has a variety of modules that help or assist manufacturers and their retailers with the warranty claims system. When a company uses ServiceBench, the customer sends in the registration form, and it is filed in the ServiceBench database. If the customer then has an issue with the product, the manufacturer or retailer can go into the database to confirm that they do, indeed, own it and have a warranty. After the customer decides when he or she would like service, the software searches for a qualified service provider that is able to fix that product and dispatches them out.
After the dispatch is received, the service technician goes out to complete the job, visits the ServiceBench Web site to fill in necessary information such as model number, and then submits the form. ServiceBench then sends an e-mail to the technicians, informing them of the time for which they will be paid.
Although ServiceBench offers this entire system, Sears and other ServiceBench customers have customised their own systems to fit their needs.