Development of service in the Digital Age

It’s hard to imagine a manager or owner of the business who hasn’t hears about a need of “coming to the digital age”. In any case, those who were able to build stable and working system in their company heard about it. Those who has an opportunity now to follow up market trends and to plan future for their business instead of running like a hamster in the wheel or plugging holes in a sinking ship.

What is “coming to the digital age” and why its needed? Five years ago no one was talking about it and now it’s considered as one of the main condition to save and to develop the business. Let’s try to understand with the help on service company example. Because especially for service the Digital Age suggests more opportunities and benefits nowadays.

The digital technologies development in the service

These benefits include, above all, the time savings of employees through the introduction of various CRM systems (which saves money and offer customers a cheaper product) as well as direct contact with your customers.

This direct contact allows you to reach a fundamentally new level of service, in which you can, on the one hand, comprehensively solve all the tasks of clients by providing the necessary information almost online, and on the other hand, prepare and send individual offers promptly. This greatly increases the efficiency of sales of service, spare parts and (as a result) of new equipment.

And of course, it is difficult to overestimate the role of modern IT systems for collecting analytics, assessing KPI services and long-term planning in services.

Considering two opposite options:

Your company sells and maintains expensive industrial equipment. The market has a fairly high entry threshold. It is difficult for competitors to carry out repairs due to the lack of spare parts and the need to train their specialists. You strive to improve the quality of service to keep every customer. At the same time, you earn on the service (at least on spare parts) and would like to earn more. But your main goal, also, the growth of sales of equipment.

You sell cheap equipment in large quantities. Your advantage is the low price, which is obtained due to large discounts from suppliers. Service for you is a headache and extra costs that you would gladly get rid of, but no one canceled the guarantee. The opportunity to make money on the service is considered more like a utopia. Less expenses and claims are the main task.

In the first option, customer satisfaction with the quality of service is of paramount importance. Speaking of quality, customers compare your service with competitors. Criteria for comparison can each have their own, but at the same time there are KPIs that are important for almost all customers. For example: the processing time of contacting technical support when a malfunction occurs, the departure time of a technician when remote repair is impossible, the time to “close the problem” - from the moment of contacting to the moment when the machine started working again.

At each stage of processing the received treatment, it is important to minimize the time for searching for the necessary information. Modern CRM (Customer Relationship Management) systems successfully cope with this task. You can formalize the information needed to solve the problem in the form of an application, which from the company's website goes directly to CRM and is attached to a specific client. In this case, the client receives a letter with information about the application number and on subsequent calls it is enough for him to give this number, without explaining the whole problem to each employee first.

A technical support engineer can see the entire history of machine repair and consult with all specialists who have previously performed repairs and maintenance. He sees the contacts of the client’s specialists and can quickly contact them to clarify the circumstances of the malfunction or to establish connection to the equipment via the Internet. In case of impossibility of remote troubleshooting, a technical support engineer can, by pressing a single button, send all the information to the service coordinator with his comments for organizing the exit. The coordinator doesn’t spend time searching for contacts of the client’s managers and can bill for the upcoming work by pressing a couple of buttons. At the same time, the application for exit is automatically installed in the repair plan for a specific equipment, which at the same time receives a letter on its phone, can track the entire history of problems and negotiations with the customer on the problem, prepare in advance and take the necessary parts and tools with them. Tickets and the hotel immediately after confirmation of the customer are ordered by the service coordinator, and the application for the delivery of spare parts needed for repair goes to the logistics department, at the same time creating an application for ordering a new spare part from the supplier’s warehouse.

All this allows to significantly reduce unproductive time, the preparatory stage of work, which is paid from the pocket of the company owner. But the most important thing is that it reduces the time of departure of the equipment and the downtime of the machine, which is often very expensive. It is unlikely that customers with a positive experience with such a service will want to contact competitors who are planning in Excel, asking a huge number of recurring questions and eliminating the problem 2-3 times longer. Even if the cost of repairs from competitors will be 20-30% cheaper.

Thus, CRM systems can reduce the cost of work, raise the price (and therefore increase the marginal profit of the service even more) and, most importantly, achieve a high level of customer loyalty.

Efficiency of IT technology for service sales

Now let's have a look how to effectively use IT technologies for sales of service products and services.

Put yourself in the shoes of a client. Would it be interesting to you to have constant access via the Internet to the full technical documentation on your machine? After each technical inspection, see in your personal account on the website of the company performing the repair, the service records of your equipment? Acts of work performed, recommendations for operation? It would be interesting to automatically receive offers there for the necessary parts after each repair or maintenance? Many companies plan in advance the budget for the operation of equipment, it is important for them to put expenses into the budget and to receive statistics on expenses for previous periods.

Similar ideas were implemented in the company Demag 6 years ago. A global database with critical information, analytics and a direct link for the customer, called the Service Platform, is considered by the company as the most important competitive advantage. Some customers appreciate the convenience of working with Demag so much that they ask for maintenance of competitors' equipment so that they also have the necessary information to use.

Now consider the second option. In case of a low-margin business with high turnover, reducing service costs is crucial.Modern systems allow you to fully automate the process of organizing repairs and ordering spare parts, which can significantly reduce the number of full-time employees (for example, service coordinators). The clients themselves can often act as coordinators if they see the cost, time and location on the map of the technicians nearest to them. We will not once again describe the reasons for the success of Uber technology; we have a separate large article on Executive.ru about it. In the article, based on the experience of implementing one of our projects, we talked about a company selling equipment for restaurants. An assessment is made of the effectiveness of using Uber technology in such companies. In addition to reducing costs and repair time, an important advantage of modern IT solutions is the ability to work with a large number of freelance freelancers, which is especially important for the company's regional expansion. A special application allows you to organize work and receive a commission from freelancers, which makes the initially unprofitable service the second profit center of the company. It is curious that after the publication of the article we received a lot of feedback from companies introducing similar solutions. One, the most interesting, was received from the head of Digital Transformation division of the world-famous company Cisco.

Thus, modern IT technologies give a huge advantage to the service, and, through the service, to the entire company. But not every organization can use them. After all, standard CRMs are designed for companies with streamlined business processes, of which there are not so many in Russia.

You can buy a jet plane, but will your people be able to serve it, will they be able to fly it without training? Is it possible that most of the time he will just stand in the hangar?

For companies that do not have experience with CRM and IT solutions, we would recommend starting with some inexpensive systems that can be customized for their business processes and not go broke on customization. In addition, in the process of implementation should be carried out work on the adjustment and optimization of existing processes in the company. Not to "fit" them under CRM, but in order not to scale ineffective, erroneous solutions. And here, unfortunately, no IT specialists will help you. We need a very experienced and competent specialist who is able to first set up the work of the service, and then formulate the terms of reference for your IT specialists.

How IT affects the service development. Summary:

IT systems enable businesses to translate into digital reality and take advantage of unattainable advantages for competitors. But in order to use them, most Russian companies must first get out of the Stone Age. And in this matter digital technologies are useless, here everything depends on the leaders.