Medtronic shows its commitment to being an information service provider

August 23rd, 2013

This article does a great job illustrating the new direction medical device companies are taking – some faster than others.

http://medcitynews.com/2013/08/cardiocom-acquisition-shows-medtronic-is-serious-about-expanding-from-devices-to-data/

 

 

Service Transformation – Remote Service Makes It Possible

February 10th, 2009

I just had a new article published in AFMSI’s S-Business Journal. If you haven’t read it yet, check it out here,

http://www.ssipartners.com/articles.htm

This is a topic I feel strongly about. Especially when I see so many companies struggle with it. Feel free to comment. I am sure others would benefit from opinions other than mine on this topic.

Jack

Secrets to Remote Service Customer Adoption

May 16th, 2008

Many manufacturers have yet to understand how customers best adopt new remote service offerings. They get so hung up on, “will our customers let us do it?” The real question is, “How do we communicate the value so our customers want it?”

Even if the first introduction of remote service is about efficiency and cost reduction, which is often the case, there are many aspects that benefit the customer. In fact, one of the best things about remote service is that just about anything a service organization does to reduce costs with remote service, there is a corollary effect that has measurable benefit to the end-user.

For example, let’s say a manufacturer uses remote service technology to diagnose a problem before dispatching a technician. In some cases, they may even be able to avoid the dispatch altogether and save significant costs.

The end-user in this case just got the equipment back up and running in record time. In fact, you can measure the difference in “time to equipment recovery” with and without the remote service capability. This difference translates to an increase in your customer’s productivity – or, whatever they deem is valuable to having running equipment.

A big key here is that the new remote offering is focused on “support” and not really a “value-added service.” From a best practices standpoint, this is as it should be.

When it comes to increasing equipment uptime, I argue most end-users are more than willing to accept being connected to the vendor. Some even demand it. The mistake manufacturers make is overlooking the importance of properly communicating the value of the “support” offering to customers. This is especially true when the primary motivation for doing remote service is reducing service costs.

I can count three manufacturers off the top of my head who are stuck with deployment because the end-users want discounts on the service contract because the offering only appears to benefit the vendor. What is so appalling is that they give in and offer discounts for the connection. Obviously good services marketing is missing in these cases.

A question I get quite often is, “Fee or Free? Should we give the offering away or charge a fee for it?” The answer is very clear if the nature of the offering is to reduce your service costs – GIVE IT AWAY!

It is not a good strategy to commit to cost reduction within your organization that depends on your customer to purchase something from you. If they choose not to buy, you have just shot yourself in the foot to reduce your own costs.

Remove all barriers to acceptance, communicate what it means to the end-user, and get as many customers connected as possible. No matter how good your offering is, you won’t deliver any results if you are not connected to a large percentage of your installed base.

Save the value-add (fee based) services for when your customer has become comfortable being connected and has had a chance to experience the goodness of remote support. By this time, you will already have them hooked.

Only then will they be ready to “hear” about new services that can benefit them even further.

HP buys EDS

May 15th, 2008

The front page of yesterdays Wall Street Journal quoted the CEO from HP saying, “Our growth with come from services.”

Holy cow, what a concept!

Perhaps this will be a wake-up call to other equipment manufacturers to cure themselves of “Box-itis” and they might see the strategic role services plays within an equipment maker.

One can only hope…unless they are your competitor.

Top 10 Signs You Are Already Sitting on a Smart Service Goldmine

April 29th, 2008

There is a big difference in using remote service technology as a support tool versus a value creation platform. Most equipment companies see remote service as only addressing the break/fix needs of the support group.

It is an uninformed and shortsighted point of view. That is, unless you are only interested in having the equivalent of a long screwdriver to support your products in the field and there is no pressure to grow the business.

Here is a list of signs that indicate there is untapped value in the installed base. I’m not saying Smart Service is the only way to exploit that value. There are indeed many ways to do it.

I am saying however, that using remote service technology to create “Smart Services” happens to be one way that scales very well.

  1. The cost of owning your products are at least 6 to 8 times more than its purchase price
  2. Your customer is required to maintain records on equipment operations and maintenance
  3. You know how to run your customer’s operation better than they do
  4. There is a skills attrition problem among your customers
  5. Your customer wants but cannot afford their own performance management tools
  6. You customer could benefit from analysis of the data produced by the equipment they use
  7. Downtime is expensive
  8. You as the service provider can increase equipment uptime not only from fixing it faster, but also through proper configuration management and operator usage
  9. More than 10% of support calls are operators not knowing how to perform or complete a task
  10. If you improved your customer’s productivity, they could quantify the revenue gains

5 Examples of Revenue Generating Smart Services

April 22nd, 2008

I call these “Smart Service” offerings because they have a achieved a level of maturity in the market where they are tightly integrated with the products and services the equipment owner is selling to their end customer. They are successfully contributing to revenue growth.

See the remote service FAQ for more on the difference between Smart Service and Remote Service. (links open in a new window)

1. Metronic CareLink Network

Device maker providing clinical expertise to physicians

2. CardioNet

Medical device maker accommodating insurance reimbursement requirements rather than waiting for industry change for disease management

3. Emerson Climate Technologies

Conserving energy consumption while protecting chilled retail inventory at the same time

4. Schmitz CargoBull Trailer Telematics

Through creative partnership with Bosch Security, the have enabled their customers to offer services to the end-customer previously unavailable.

5. Gilbarco – Veeder Root

Reducing total cost of ownership and automating inventory management

Which other ones belong on this list?

To Have Smart Services, You Need Smart Products

April 7th, 2008

One of the most peculiar behaviors I have witnessed inside a product manufacturer has been the relationship between the support/service organization and the product development group. The relationship defines insanity.

I witness this repeatedly. Larry, the support manager, feels the pressure of maintaining warranty performance on the products he supports. Every so often, the support group, doing its best to support a difficult product, reaches the boiling point trying to keep their heads above water. They have had enough of inheriting the product’s quality problems.

At which time, Larry stomps down the hall to product engineering with documented facts in hand. He pounds on Stefan’s door, the development manager. Waving his supporting data, Larry demands certain fixes be made immediately because support is falling down on their face trying to fix things in the field.

Stefan, being quite used to this by now, listens intently as Larry has his rant. It happens at least a couple times a year.

Stefan is quick to placate him, “Yes Larry, we are going to have a maintenance release as soon as these other features get done…I promise I will make this my next priority.” Poor Larry is gently subdued and leaves Stefan’s office with cautious optimism. Sort of like when Charlie Brown goes to kick the football while Lucy holds.

Read the rest of this entry »

The difference between support and service

March 31st, 2008

Are support and service synonymous in your organization? You would be among good company if it were. Many organizations view these business functions as the same. Of the ones that do differentiate, few actually leverage them for the opportunity they offer. Let’s look at the differences.

Support is what product manufacturers do to keep the product running as advertised. It involves repair, maintenance, parts, and all the other work required to keep the machine performing its intended function. Most manufacturers have founded their warranty and contract business on support.

Service is work done for others as an occupation or business. Think of it as anything over and above “keeping the machine running as advertised.” We can call them “Value-added” services.

Many manufacturers confuse the two. I argue their differences are distinct.

Read the rest of this entry »

This stuff is plug & play, right?

March 30th, 2008

Most equipment manufacturers invariably want to benchmark themselves against peers within every aspect of their business and remote service is no exception. They often are not trying to determine how much catching up they have to make but really want to confirm a suspicion that they are no further along than anyone else even after one to three years of trying. It is an unfortunate but comforting feeling when they report amongst the managers that everyone else is struggling too and no is really living up to what they have led the world to believe.

This implies a couple of important things. First of all, most are having difficulty implementing remote service. And, industries are getting to the point where companies see the need to benchmark themselves on their remote service capabilities and extent of deployment. This is a good sign as it indicates a maturity turning point.

Buy why do so many struggle?

Read the rest of this entry »

The most expensive field service call ever

March 30th, 2008

NASA is the best remote service organization in (and out of) this world. They have to be. Field service calls are way too expensive.

Listen to the narration. He talks about the field service engineer (astronaut) fixing a loose power supply cable. Look closely at the long boom. That’s a person hanging upside down from it. Next time you hear an FSE complaining about working conditions, you can have them watch this.

How would you like to submit the travel expense report with 5.3 million miles! :)