service excellence white paper - showcase.mheda.org...and mobile ﬁeld service application plays,...

Service Excellence is a Strategic Differentiator that

enhances Profitability of Equipment Dealerships

Abstract

Equipment dealerships are presented with service

opportunities. At the same time, they are facing

challenges in providing Service and Product Support.

Service-related opportunities and challenges invite

dealership executives to scrutinize their current

operating practices.

This White Paper presents a series of best practices.

It also highlights the role, a modern business system,

and mobile field service application plays, in optimizing

your service processes and profitability.

A best-practices guide

for forward-thinking

Equipment Dealerships,

looking to provide

optimized Customer

Service

White PaperService Excellence

e-Emphasys Technologies Inc. 2501 Weston Parkway

Suite 101, Cary, NC 27513

T: 919 657 6565 F: 919 657 0773 E: [email protected]

www.e-emphasys.com

On the one hand, equipment dealerships are presented with several opportunities in the Service

area. Service is oftentimes looked upon as the tail-end of the business. Many service departments

are excellent at fixing broken equipment. Yet, in the larger scheme of the dealership business, the

service department has a more strategic role to play. Dealerships have the opportunity of

transforming their service department from a cost center into a profit center. They also have the

opportunity of elevating their customer service into a strategic and competitive differentiator.

On the other hand, dealerships are also facing service-related challenges. Customers are

increasingly demanding. Fleet owners expect maximum equipment availability and utilization.

Large fleet owners exert downward price pressure. Meanwhile, equipment has become highly

sophisticated, requiring specialized technical skills for operations and service. For certain

competence areas, qualified staff is hard to find and attract, resulting in premium labor rates.

The service-related opportunities and challenges invite dealership executives to scrutinize their

current operating practices.

In this White Paper, we present a series of best practices. We also highlight the role, a modern

business system and mobile field service application plays, in optimizing your service processes

and profitability.

Opportunities & Challenges in Service

The Service Opportunity

Most equipment today is versatile, sturdy, and of excellent quality. Product differentiation has

become increasingly challenging, and price wars, commonplace. Fierce competition between

brands is putting sales margins under pressure. And large fleet owners dealing directly with OEMs,

are eating into new equipment sales opportunities for dealerships.

Your Service department represents a powerful weapon for turning these challenges into

opportunities. What customers will best remember you for, is the service level of your

organization. Quick and adequate repair of their equipment, consistent high-quality service, and

reliable operation of their fleet are your best differentiators. Satisfied customers tend to be loyal,

and repeat business generates higher margins. Moreover, your technicians operate in the front-

line; they are your eyes and ears in the market. They can spot opportunities before your

competitors can.





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With an efficient and high-quality service organization, you are in a good position to contract

major service and maintenance work for large (rental) fleet owners. Most of them are ready to sub-

contract or out-source service and maintenance to a specialist.

The following simple statistic, demonstrates the importance of service, and the size of the

opportunity it represents. For every new unit being sold, a multiple of 20 or 30 units are in

operation at any point in time, requiring service, maintenance, parts and upgrades.

Installed-base-to-new-unit ratio:

- Average: 13:1

- Locomotives: 22:1

- Tractors: 30:1

- Civil Aircraft: 150:1(Source: Harvard Business Review, October 1999)

When looking at the initial acquisition cost of equipment as a percentage, the overall life-cycle cost

it represents is only a 10% portion; 90% of the life-cycle costs are service-related. (Source: Accenture, 2005)

These figures when combined, illustrate the importance of equipment service. Capturing a larger

share of this overall revenue opportunity, and managing it more profitably, makes both top-line

and bottom-line impact to your dealership.

The Service Dilemma

Your Service department, including your technicians, dispatchers and service managers, probably

represents one of the hardest-working teams within your organization. They are always on call,

rushing against time, and dealing with customers who can’t wait for their machines to get back into

production.

Whilst they are probably your best customer advocates, customer satisfaction ratings for your

company’s service may still leave room for improvement. Though nobody would argue their hard-

working nature, you may still find the Service department’s profitability to be a challenge.





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The difference between profit and loss can be as simple as missing a manufacturer’s warranty for a

replaced component, or dispatching an overqualified person for a particular job. From working

closely with many equipment dealers, e-Emphasys learned that the key to unlocking this dilemma

is not working HARDER, but operating SMARTER. Being smart about service is the difference

between a satisfied and a grumbling customer, between long-term loyalty and luring attrition,

between profit and loss. With today’s insight and technology, service excellence is within reach for

your organization.

The Service Productivity Game

The winners in the service arena will be the companies focusing on service productivity. This means

working smarter rather than harder, and operational excellence beyond diligent ‘fire-fighting’.

The question that each dealer executive and service manager should ask himself is: whether their

service department possesses the infrastructure for efficient and effective job execution.

Most technicians carry an expensive tool kit, but are deprived of essential information on the job.

Most dispatchers are very proficient with telephone, fax, and service board, but lack real-time

interaction with the field. Most executives have an excellent feel for performance of their business,

but have limited management information for analysis and decision making. Superior service

productivity starts with a system, which pulls it all together, addresses the tactical issues, and

disconnects any inefficiencies within the business process.

Best Practices

~ Integrated Customer Interaction

With today’s communication technology, customer interactions happen through a variety of

channels, including telephone calls, reports from an onsite technician, submissions from the web,

e-mail, fax, automatic updates or calls from equipment with on-board monitoring and satellite

communication capability. Every interaction is an opportunity to increase customer satisfaction,

and possibly get an order. However, for most dealers keeping track of these interactions, and

creating a 360-degree customer view, provides a challenge. Dealers can therefore gain value by

integrating their customer touch-points, and providing their employees with visibility of customer

contacts, fleet details and history, to get a complete picture of the customer’s activity and potential

needs.





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Being able to anticipate needs, and predict or prevent problems, upgrades the customer service

relationship from pure fire-fighting, to a more pro-active partnership. At the same time, it helps

dealers to decrease the need for expensive and disruptive emergency service calls. By automating

the capture and response to requests through tools such as remote access, workflow, automated

escalation and integrated email, companies are ensuring that customer calls are captured and

addressed in a timely and adequate manner.

~ Call Efficiency

Margins on services business are highly dependent on keeping costs in check. Dealerships that

build a knowledge-base of problems, causes, resolutions and occurrence rates, combined with

OEM service bulletins, and share this information with their service representatives, are able to

support their customers more effectively, whilst improving call efficiency. By providing

information that can be quickly searched for relevant answers, the time spent with customers is

more productive, and provides more value. If a customer can find the answer to a problem, or

question through self-service, customer satisfaction can come at a significantly reduced cost. By

providing customers and customer service representatives, with broad access to product and

service-related knowledge, on site service visits can be reduced, and the cost of the technician and

related overhead expenses saved.

~ Intelligent Scheduling & Task Combination

A dealer executive recently stated: “Skilled technicians are becoming a scarce commodity, and you

certainly want to make best use of their time.” Intelligent scheduling, skill matching, parts availability

verification, route optimization, and combining of tasks provides great opportunity for optimized

utilization of technician’s time and capability. Furthermore, emergency calls and equipment swaps

always have a disruptive effect on dealers’ and customers’ operations, and come at a high cost.

Reducing those through planned maintenance or repair, and moving load from peak to off-peak

times, contributes to customer satisfaction and improved efficiency. By providing the technician

with the right information about the customer and upcoming service, technicians can often

combine tasks, and save on the total number of trips required. Intelligent scheduling tools are a

great aid for service desks also. Moving from an on-the-wall service board, to an electronic

scheduling solution helps improve service desk productivity and effectiveness, whilst maximizing

productive time spent in advising customers.





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~ Service Order Prioritization

Service orders should be prioritized, not only based on customer need, but also on the value of the

customer, and the service level that he has paid for. Nobody wants to leave a customer in need, but

knowledge of the contracted service agreement can allow company representatives to properly

prioritize limited resources to the appropriate customer. Customers that continually request

urgent responses outside of their service levels can be targeted for an upgrade to their service

plan, to generate more income for the company. Any service calls that are trending towards an SLA

violation or customer service failure should be alerted in advance, and the appropriate person

notified while there is still time to address the problem.

~ First Time Resolution Rate

By closing the call the first time, the number of service calls can be reduced, customer satisfaction

increased, and the call-to-cash cycle shortened. Fixing the problem, the first time requires the right

technician, with the right knowledge, the right parts, the right tools, the right customer data, and

the right equipment information in hand. By having pre-defined job templates for problems,

outlining the appropriate actions, tools and parts required to make the correction, service

technicians can show up prepared to get the job done right. Online visibility to the equipment, the

service history, and the call history, enables the technician to accurately and quickly diagnose, and

resolve the issue. Closing the call means customer sign-off, invoice release and expedited cash

collection.

~ Technician Productivity

The service technician is critical not only to resolving customer problems, but also to maintaining

service history, and reporting time and material information for billing. Reducing the amount of

time spent on paperwork through automation, enables the technician to spend more time on the

job, reducing employee expenses from overtime, and hiring additional technicians. Mobile

technology and self-service capabilities can significantly reduce the air time technicians spend

with the service desk, thus freeing up time on both sides. Keeping technicians updated of schedule

changes in real-time, helps develop and maintain a responsive, productive and nimble service

organization.





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~ Source of Opportunities

Companies with service personnel trained and equipped to spot sales opportunities can add a

significant new source of revenue. Service desks and field technicians having visibility to contract

expirations, upgrade availability, promotions, and complementary attachments or supplies, can

increase customer satisfaction as well as sales revenue. Up-front notification of potential

opportunities will enable service personnel to look beyond the mere servicing of equipment.

Modern business systems can further optimize the capturing and timely follow-up of

opportunities by the sales department. The most expensive part of service may be sending a

technician; any additional work will come as profit.

~ Call-to-Cash

Perhaps one of the best ways to increase the profitability of services work, is to enable the service

technician to create an invoice on the spot, starting the payment cycle immediately. Equipment

dealers tend to sit on large numbers of open service orders. Invoice cycles of 30-60 days after

service order completion are fairly common, with obvious cash flow effect. In addition to being

paid earlier, the service technician can get approval at the time of the service. Part numbers, time

and expenses are much more accurately reported when captured quickly. To generate an accurate

invoice in the field requires online access to contract, warranty, service history, call history, and

customer information. Leaving customer premises with an approved invoice prevents errors,

disputes and credits, and impacts cash flow positively. Creating an inaccurate invoice, however,

may be worse than delaying the invoice. Modern service applications fully automate this process,

expediting the process and minimizing efforts required by technicians.

~ Revenue Leaks

Revenue leaks occur when customers are not billed for services they should pay for. The goal is to

give the customer everything he is entitled to, at the same time invoicing everything the dealer is

eligible for, thus leaving money on the table. Due to fragmentation of information, paper-based

processes, and time delays, many dealers face revenue leaks for expenses which go unreported

and / or are not billed for. Revenue leakage is difficult to identify after the fact that it usually arises

in small but frequent occurrences, and requires access to detailed history and account knowledge.

Similarly, supplier warranty information must be readily accessible, integrated and easy to

understand, in order to track returns and refunds. A systematic approach and supporting business

solution can provide significant benefit in recouping out-of-pocket expenses, and lost revenues by

providing visibility, and eliminating guess work.





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~ Customer Relationship

Customer satisfaction is extremely important to building long-term relationships. Moreover,

repeat business usually generates greater profitability, due to the cost involved in acquiring a new

customer. By enhancing the service offering with preventive maintenance, remote equipment

monitoring, and failure analysis, dealerships can do more to provide customers with superior

equipment availability, reliability and performance. Moving from a break / fix relationship to the

earned status of trusted advisor, and value-added service provider, oftentimes represents a ticket

to future business.

~ Lead Generation

Many dealerships have professionalized to the point where they are running, or have the desire to

run target market campaigns for lead generation. The critical element for successful marketing

campaigns – which tends to be missing at most dealerships – is a customer database with

structured and quality information. Leveraging your service organization by having it collected,

and report fleet related information (size, mix, brands, age, life-cycle cost, maintenance history) as

part of your regular duties, helps your organization build the customer intelligence necessary for

running highly effective and targeted campaigns.

~ Proactive Management

Through increased visibility into the service business, dealerships can gain better control, find

bottle-necks, and make better management decisions. Today, most dealer organizations rely on

reports that show history after the fact. With better information and business intelligence tools,

your management team becomes more proactive through alerts, real-time information visibility,

trend analysis, and key performance indicators. With better grip on your business, your

management team is in a better position to control costs, and improve top-line performance,

whilst making a bottom-line difference.





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For many dealership organizations, the above best practices represent an excellent way of

evaluating and improving the existing service processes. Successful implementation of these best

practices may require adoption of modern business software, tailored to the needs of the service

business and equipment industry.

e-Emphasys is the most comprehensive and modern Dealership Business System (DBS) in the

market today, with extensive equipment service management capabilities. e-Emphasys enables

forward-looking dealerships to re-invent their service organization, and transform it into a

strategic element of their business.

e-Emphasys provides your service organization with a powerful infrastructure, to position well for

the future, and drive bottom-line results:

n Lower service costs and increase service-driven sales

n Improve first-time fix rates and increase customer satisfaction

n Enhance field service visibility and reduce unnecessary inventory

n Improve business processes and enable better decision-making

n Improve employee satisfaction and retain critical service knowledge

For more information on the e-Emphasys DMS, please visit: www.e-Emphasys.com

Bottom-line





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e-Emphasys is the first, comprehensive Dealership Business System for modern and professional

Equipment Distributors and rental companies. It is based on a proven and flexible Enterprise

Resource Planning foundation.

Modern and professional Equipment Dealerships have outgrown the capabilities of COBOL-

based, green-screen systems. Today’s business requires nimble, integrated and intelligent

Dealership Business Systems. Customers are demanding, and competition is tough. Dealer

organizations are as flexible and intelligent as their systems enable them to be.

In e-Emphasys, dealerships model their organizations and business processes, unique to their

situation–without force-fitting. The dealership employees collaborate by sharing activities and

information. e-Emphasys obliterates islands of information, unnecessary paperwork and

redundant data entry through automation. It provides seamless integration with the OEM, and an

accessible portal for instant and round-the-clock ordering and inquiring. e-Emphasys enables

informed decisions that can be taken faster, and with more impact. In today’s equipment industry,

the fittest survive, but the smartest thrive!

e-Emphasys Technologies Inc. is a global provider of enterprise solutions, serving customers

worldwide, ranging from 25 to 2000 users. Strategic focus at e-Emphasys is on its industry-specific

ERP System, developed exclusively for Equipment Dealers.

e-Emphasys has spent more than 3000 man-years in research and development. The company

employs more than 250 highly-qualified professionals, and has a close partnership with Infor

Global. e-Emphasys offices are located in Cary NC (USA), Tokyo (Japan), Mumbai & Bangalore

(India), and Apeldoorn (The Netherlands).

About e-Emphasys Technologies





www.e-emphasys.com

service excellence white paper - showcase.mheda.org...and mobile ﬁeld service application plays,...

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