Inflation and The Skills Gaps: Two Ingredients Redefining “Good Service”

Field service manager

Customer service managers across every industry face pressure from all sides to improve customer experience and meet demand.

However, a new report found the field service industry is experiencing this pressure on a whole new level as inflation remains high and skills gaps widen.

So, how are field service leaders responding?  They’re turning to innovative service intelligence software solutions as they find themselves under growing pressure to deliver improved, cost-efficient service outcomes in a challenging economic environment.

The adoption of service intelligence software comes at a testing time for service professionals. As customers demand faster and more accurate results from field service teams, equipment becomes  increasingly more complex and difficult for customer-facing technicians to repair and maintain. Moreover, inflation drove the average cost of field service 7% higher in 2022, according to Aquant’s 2023 Service Intelligence Benchmark Report.

Delivery of “good” service on its own is no longer enough to guarantee customer satisfaction. Service costs are rising so rapidly that failure to invest in the right tools and training will cause significant challenges — perhaps even extinction — within five years if service teams fail to adapt to customer expectations.

What the data tells us

The Aquant 2023 Service Intelligence Benchmark Report gathered data from 113 organizations, including service divisions within original equipment manufacturers (OEMs) as well as third-party service providers. Data was collected from organizations in manufacturing, medical devices, capital equipment, HVAC, commercial appliances and more. Information in the benchmark report was gathered from more than 16.2 million work orders and nearly 125,000 technicians.

Among the most striking findings: First-Time Fix Rate, the widely used measurement of productivity among customer-service teams, is an outdated KPI and doesn’t actually provide the information leaders need in today’s environment. When First-Time Fix Rate is measured on its own, it’s impossible to actually see the full picture. Service leaders often miss major costs that emerge a few weeks after a failed first encounter, including additional interactions to resolve the problem.

Instead, leaders of the best service providers rely on measurement of “Cost Per Resolution.” Calculation of the total Cost of Resolution provides visibility into work that involves multiple work orders, service calls and parts ordered to resolve the same core issue. By this measurement, the cost differences between highly skilled and lower-skilled workers are stark.

At one organization, a top technician has, on average, a First-Time Fix Rate of 76 percent, resolves problems in an average of 5.2 days and posts an average Cost Per Resolution of $908. (The top 20 percent of field-service technicians boast an 86 percent First-Time Fix Rate.)

A lesser-skilled technician, meanwhile, has a First-Time Fix Rate of 63.2 percent, takes 6.6 days to fix problems and posts an average cost of $1,225 per resolution —35 percent higher than the top performer, on average.

In all, low-performing technicians can cost their organizations as much as 67 percent more.

Closing the skills gaps

It’s clear the best service organizations strengthen the skills of their entire workforces to improve performance and efficiency. They focus on closing the skills gaps between top and average performers. They implement new service intelligence software that quickly enhances the skills of new hires. Equally important, they use service intelligence platforms to harvest knowledge accumulated by veteran technicians and share it across the workforce.

The results: Delivery of the right service solution on the first visit with the customer. Reduction of parts ordered by reducing guesswork and ensuring the right parts are used during the initial fix. And lastly, specific, accurate and actionable data that gives leaders of service teams enough visibility to allocate resources effectively and improve the skills of individual workers or entire teams.

The demand for service intelligence is growing

Large software companies are beginning to see the value in this kind of technology. For instance, Oracle, who has an entire business line dedicated to field service, saw the need for this type of technology when their customers started to express a pool of challenges related to improving the overall customer experience. In response, they entered an agreement with Aquant that enabled them to offer its Service Intelligence platform — an industry-leading tool powered by artificial intelligence — to existing and future users of the Oracle Field Service solution.

Oracle began offering service intelligence to their customers after seeing the value that intelligent triage capabilities brought to front-line ambassadors in call centers and in the field, and how it enabled users to quickly and accurately diagnose problems. Meanwhile, the management insights incorporated into the platform deliver useful data to service leaders on workforce performance, customer risk and product quality trends. The knowledge harvesting and triage capabilities helps get junior techs up to speed and operating at the level of more experienced techs, while the analytics dashboard gives leaders a clear view into their business and helps pinpoint problem areas so that they can see where they’re falling short and what actions they need to take to improve.

Answering today’s challenges

Inflationary pressures on service costs are likely to continue. Customers’ desires for better and faster service will only increase. Service professionals will continue to face greater complexity in their jobs as machinery becomes more difficult to fix. While service organizations can’t control parts costs or inflation, they can focus on areas within their control, like managing their workforce’s performance. With tools like service intelligence under their belt, organizations can prioritize:

  • Closing the skills gap by hiring new techs and getting them ramped up faster.
  • Reducing parts shotgunning by determining the best and most cost-effective part for the fix.
  • Solving equipment failures on the first visit — as opposed to making quick, short-term fixes that address symptoms but not the root cause.
  • Adopting a laser-focused approach to spending by reallocating resources and cutting costs where necessary.

The time for wide adoption of service intelligence platforms clearly has arrived. If service organizations hesitate to make changes now, they are risking greater economic impact in the long term.

About the Author

Sidney Lara, AquantSidney Lara is Service Principal at Aquant.




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