six ways to achieve same year roi for field services transformation

© 2007 – 2016 RTM Consulting, Inc. All Rights Reserved 1

Randy Mysliviec | Managing Partner, Field & Support Services | RTM Consulting, Inc.

6 Ways to Achieve Same Year ROI for Field Services Transformation

Agenda

• Introductions

• Challenges of Achieving Positive In-year ROI in Field Services

• 6 Ways to Achieve Positive In-year ROI - Case Studies

• Selling Your Plan to the CxO

© 2007- 2016 RTM Consulting, Inc. All Rights Reserved.

Randy MysliviecManaging Partner, Field and Support Services

(also President and CEO)

39 years services and technology experience

IBM

Convergys

Author and innovator of the Just-in-Time Resourcing® Solution

3

© 2007- 2016 RTM Consulting, Inc. All Rights Reserved.4

Rapid Assess Design Transform RESULTS!

Innovative Frameworks and Transformation

Processes

Since 2007Two Locations: Cincinnati (HQ)

Wash. DC

>100 Clients Worldwide

on 5 Continents

Services Transformation Experts for Tech

Companies

100+ Years of Strategy and OperationalLeadership Experience

Management & Operational Consulting

#1 in Resource Management: Just-in-Time Resourcing®

ConsultingTraining

TechnologyStaffing

Why Investing in Field Services is Unpopular?

• Business transformation costs money but budgets are declining

• CxO is reluctant to invest in anything ‘hardware’ related

• Therefore CFOs want most/all investments accretive in current year

• Risk reward curve for FS executives drives most to the path of least resistance – accept more cuts and move on

© 2007- 2016 RTM Consulting, Inc. All Rights Reserved. 5

This presentation is designed to help FS executives learn how to invest in FS needs and achieve in year savings leading to long term benefits!

RTMC Services Transformation Strategy for FSTactical execution of in-year transformation actions funds needed investments

Optimize Current Business Model

…to deliver current financial plans and enable investments in business transformation

Develop Services Engines of Growth

…to deliver incremental revenues and profits

Customer Value Proposition

…enhance value by enabling customers to consume full value of solutions

Workforce Transformation

…evolving mission requires workforce transformation


Case Study #1 - Restructuring for Success

• Multi-national/multi-$B technology firm

• Field Services facing massive cost reduction targets with company under revenue pressure

• FS Exec decides to tackle the fish in a disciplined manner

• RTMC engaged to:• Perform a high level assessment of the current business model, strategic initiatives,

current high level operating plans, and organization structure

• Design a business model to achieve target gross margin levels by:

• Improving current cost structure (org focused)

• Improving operating and cost flexibility (labor, parts, vehicles)


Optimizing the Current Biz Model

2-year target = $15M*

Organizational Redesign

Parts and Vehicles $3 to $4M

Other Cost Opportunities(Labor Utilization / Channel Optimization /

Travel / Other

$6M

$5 to $6M


Use of bench-

mark data helpful in

setting targets for

‘what good

looks like’

* target is cumulative savings from prior year spend. New run rate results in substantially greater long term savings.

Followed a Structured Process


Assess & Architect

Build & Refine

Execute

Phase 1 Phase 2 Phase 3

RTMC FS Business Transformation Process

Actual/Projected Savings = $18M (per year)

$3.5 (in-year)

$8M (in-year)

$6.5M

Organizational Redesign

Parts and Vehicles

Other Cost Opportunities(Labor Utilization / Channel Optimization /

Travel / Other

Organizational simplification Ops consolidation/more

shared support Improved operational and

client performance Improved decision and

execution effectiveness

Case Study #2 - Optimizing Cost (Vehicles)


• Field Services facing significant cost reduction targets

• FS Exec identifies vehicles (using benchmarks) as an opportunity for savings

• RTMC engaged to:

• Perform a vehicle management assessment to identify opportunities for savings

• Use Variability Reduction techniques to accelerate time to savings


http://www.rtmconsulting.net/field-services/vehicle-optimization


http://www.rtmconsulting.net/skills-development-training-for-field-services

RTMC Vehicle Optimization Landscape• Strategic alignment/other

considerations on utilization of vehicle

• Echelon stocking/parts delivery capabilities

• Geographic/service coverage alignment

• Price and lease/buy

• Company owned or employee owned

• Special requirements and aftermarket retrofits

Vehicle Selection

• Monthly mileage-business and personal

• Entitlement

• Fuel and Maintenance

• Accidents/Insurance/Driver Safety Programs

• Personal Use/Legal and Tax Consideration (Tool or Benefit mentality)

• Technology available with benefits far beyond vehicle optimization!

Vehicle Use

• Timing/Aging of fleet

• Types of leases/purchase options

• Tiered depreciation to increase flexibility

• Maintaining proper number of vehicles

• OEM marketing data

• Managing days to sell

Vehicle Refresh


TSIA Benchmark




1) Which vehicle2) How many

vehicles

3) At what

price

4) How to

maximize

usage

5) When to

replace

6) How to

remarket the

best

Improved type mix:- Lower

cost- Better

reliability

Re-evaluated inventory/service needs need and consolidated / optimized fleet

Some savings for in-year purchases (vs. prior strategy) but mostly out-years

• Preventative maintenance and accident redux focus

• Future savings from better use of telematics

• Financial analysis produced better mix of lease vs. purchase vs. employee owned

• Replacement schedules optimized

• Next year plan to get better resell price yield

20152016

2017>$1200

Great progress! (mo. cost per vehicle)

<$1000

<$800

Case Study #3 - Labor Optimization


• Field Services facing substantial cost reduction targets

• FS Exec identifies labor (using benchmarks) as an opportunity for savings

• RTMC engaged to:

• Perform a labor/usage assessment to identify opportunities for savings

• Use Variability Reduction techniques to accelerate time to savings


http://www.rtmconsulting.net/field-services/labor-optimization



• Competitive Wages

• Competitive Benefits

• Effective use of Flexible Resources (Direct and Indirect)

• Sourcing

Labor Rate

• Effective Supply and Demand Management

• Density Management

• Technical Proficiency

• Repair Procedures, Policies and Practices

• Knowledge Management

• Variability Management

• Management Processes

Labor Utilization

• Select, Develop and Retain

• Serviceability/Technology

• Remote Solutions and Channel Optimization

• Product/Parts/Supplies Quality and Availability

• Product Rationalization and End of Life

• Customer Expectations and Use of Solution

• Measures, Scorecards, Rewards and Recognition

Labor Effectiveness

RTMC Labor Optimization Landscape


Channel Optimization

(Shift Left)



Speed

Quality

Wage

Benefits

Direct HoursLabor

Cost

Rate

Utilization

Effectiveness

Variability Reduction

analysis conducted to

identify outliers and remediation

by region/geo

In-year savings ($4M) and drivers:

Next year savings ($12M) and drivers:

• Utilization (partial yr.)• Non-conforming WOs -

(improved FTF)

• Utilization (Full yr.)• Non-conforming WOs -

(improved FTF)


Some Mini-Case Studies


Revenue Growth

• Multi-$B multi-national technology firm

• Renewals challenges• Strategy to leverage tech

relationships • Client facing skills a

challenge

• Solution:• Successful soft skills

training pilot (2016)• Broader rollout 2017• Results tbc

Parts Optimization

• Multi-$B multi-national hw/sw firm

• Cost redux targets to meet• Parts costs known to be

above industry norms

• Solution:• Variability reduction used

to identify opportunities• $1.5M parts costs per

month savings began in current year

Channel Optimization

• Multi-$B industrial automation firm

• Labor cost challenges• Decided to ‘shift left’

• Solution:• Channel optimization

assessment• Remote solves primary

area of focus• 6 mos. implementation• >15% on-site calls moved

to remote solve (in-year)


http://www.rtmconsulting.net/field-services/parts-management

http://www.rtmconsulting.net/field-services/shift-to-the-left-2

Selling Your Plan to the CxO

- Have a plan that is accretive in the current

year (plan ahead!)- Contemplate starting

early in your budget year to maximize time to

results

Know your stuff

- Use benchmarks- Often a third party can

help you fill gaps & speed time to value

Have a detailed plan showing needed

investment, Y1 ROI, and execution plan

(consider a third party to help with speed and

execution)

1 2 3

Contact Information:

RTM Consulting, Inc.855.786.2555

[email protected]

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