When, in 2005, the Yankee Group spoke to field technicians to establish how they spend their day, it discovered that they actually only dedicate 21 per cent of their time to fixing customer’s problems. With the rest taken up by travel (26 per cent), paperwork (16 per cent), communications with call centres (16 per cent), parts management (11 per cent) and waiting (11 per cent), there was a clear opportunity to improve efficiency.

It was suggested that the next step towards improving efficiency is to reduce the need to dispatch field technicians altogether, so how can you limit the need to dispatch for repairing a malfunctioning asset?

The customer’s problem may not even require a field technician visit and according to Boston-based research firm Aberdeen Group, the unnecessary dispatch of a technician costs £142. How can this loss of time and money be avoided? By assessing the problem remotely.

Remote device management can not only diagnose the problem but also fix it without interaction with a call centre agent or a field technician. However, the problem can also be remotely diagnosed and potentially repaired by taking the user through a series of questions using case-based reasoning. This is knowledge management, the next step toward remote diagnostics.

Cashing in on repairs?

Certainly manufacturers have, historically, had little motivation to avoid dispatching field technicians, since in ‘time and materials’ contracts their technicians’ time in the field would be a billable revenue stream. In addition, margins are often eroded due to multiple service calls to the same customer because the field technician did not have the right part or tool to repair the problem.

But now, customers purchase fixed priced service level agreements (SLA) at the point of sale for ongoing service and maintenance. If that service is not delivered according to the SLA, manufacturers will pay the penalties.

Therefore, companies must optimise service operations to not only reduce unnecessary service calls, but also to improve first call resolution by providing the right part at the right time with the right field technician. Moreover, for the model to work, they must price parts and labour both competitively and profitably: a huge challenge in itself when SLAs typically run for several years.

And in the face of dwindling product margins due to globalisation and commoditisation, service delivered after the initial sale of a product can differentiate competitors from one another in today’s increasingly service-driven marketplace.   While products and features can be duplicated, aftermarket support is very difficult to replicate and can have a substantial impact on a company’s revenue, profitability, and customer satisfaction and loyalty levels.

In a recent article in Harvard Business Review, titled Beating the Market With Customer Satisfaction, a study by the University of Michigan’s National Quality Research Center made the connection between customer satisfaction and stock market success. According to the research: ‘The companies with high customer satisfaction scores have blown the S&P out of the water. Not only have they produced higher stock returns, but their stock values and cash flows have been less volatile.’

Customer satisfaction does indeed have a significant impact on corporate performance. So the time to optimise the service centre is now. But which is the more feasible solution?

Fixing call centre gripes 

According to Boston-based analyst firm AMR Research, remote fixing through M2M communication will enable companies to generate revenue, reduce costs and transform their service operations. This leads to a competitive advantage through higher service levels, stronger first call resolution, reduced field service trips or truck rolls, and improved overall performance.

However, sometimes the investment in this technology outweighs the fiscal return. According to AMR Research, products are going to market with 300 per cent more electronics, but before adding all the electronic bells and whistles, including remote device access, the manufacturer must determine how the end customer will use the product and in what frequency. High-end computer servers and airplane engines would definitely be worth the investment in M2M communication for remote diagnosis and fixing, but home appliances, for example, are not yet there.

Also, most assets would require a technological overhaul, and that would also mean a serious investment in time and money. AMR predicts that the M2M market will grow as new products replace older ones during upgrade cycles or service replacements, but it will grow at a slower pace than other technology investments, like knowledge management, which is more cost-effective and immediate.

Therefore, remotely fixing millions of refrigerators and home appliances through M2M communication or device management is still in process. But access to a knowledge management solution can remotely diagnose and perhaps fix the problem without adding an additional device on the end-product.

Knowledge management: present reality

Knowledge management requires less initial technological investment than device management or M2M communication, but it can deliver almost immediate results. It helps engineers, dealers and customers access knowledge to solve complex problems by electronically leveraging product documents, experience and expertise through powerful retrieval techniques. Its case-based reasoning equips both novices and experts to find the solution to their problem before the service truck ever rolls.

So now call centre agents can avoid unnecessarily dispatching field technicians, but if a service call is necessary, they can be sure to send the right technician with the right part to the right place at the right time – the foundation of strategic service management.

Furthermore, by reducing the number of calls and empowering customers with the capability of fixing the more basic faults directly, waiting times and resolution times (as well as carbon footprints) will be cut down across the spectrum, delivering higher customer satisfaction levels for all.

Indeed, everything about knowledge management contributes to increasing customer satisfaction – which, ultimately, drives repeat business and profitability. So don’t look upon knowledge management as a passing fad, because it’s here to stay – just like the tools to enable it. And don’t file it as some operational matter you’ll get round to when you’ve got time: knowledge management is critical to delivering world-class service to your customers and optimising the use of resources to remain cost-effective. It is strategic to service; and service is strategic to your business.

Kevin Tingey is vice president and general manager of Servigistics EMEA