Strategic Service Management

It’s that time of year again. MillwardBrownOptimor have published their Top 100 Brandz ranking, and corporate marketers are either celebrating or justifying in boardroom around the globe.

But should marketers alone take in these findings? Or does customer perception break down any barrier between Service and Marketing that may exist on Org Charts?

If you are in either Marketing or Service, I recommend you take in the “Trends” on page 10 of the report. What are its key SSM implications?

As people stay in during the recession, home shopping / home services are on the rise. Not only does that mean more deliveries, but also a greater need for repairs as users invest, for example, in coffee machines to cut down on trips to coffee houses. Do you deliver? Have you optimised your routing and scheduling? Is your parts planning reliable? Do you have the required visibility to exceed your customers’ expectations in your management of vans and technicians?

People buying equipment for home use, or putting off major new investments (which goes a long way to explaining the 22% hit suffered by the car segment), opens up an opportunity for service parts pricing. How are you positioned to take advantage of it?

Apple grew 14%; BlackBerry 100%. Where once we had phones, now we have… handheld life organisers. This trend is supported by growth in network brands: Vodafone is up by 46%, AT&T by 67%, O2 by 36%. We are increasingly connected, which (when managed…) benefits our efficiency (in and out of the office). But it also means our expectations rise. Why can’t a delivery be scheduled more accurately? Why can’t a tech turn up with the right part? We are all more aware of technology’s potential – and accept no excuses for failure to leverage it.

Such increased technical sophistication also means we are often happy to fix minor problems ourselves – a scenario that expedites repair time and dramatically reduces costs for all involved. Do you have the technology to remotely support your customers?

At Servigistics, we have long underlined product commoditisation. Branding is a critical path to differentiation. Is it achieved through good marketing? Is it achieved through good service?

Let’s look at it this way: I would challenge anybody to achieve differentiation in 2009 without good marketing or good service. Which is why SSM goes beyond managing your Service operation, and encompasses your entire business. And, in your quest to win and retain customers, you create fictitious barriers between Service and Marketing at your peril.

best,

g.o.s.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

The good news is… looks like I’m not alone.

The bad news is…

Well, come on – people shouldn’t be dreaming dreams in 140 characters, or dream of the new iPhone hardware as they ponder whether to splash out or not. That’s not what the resting hours are for.

This is what happens to us when we overdose on technology. It happens to all of us, at some point – and the effects are clear to see. Because, fundamentally, we are hunter/gatherers, not e-mailers or twitterers. And, at least in our sleep, we should revert to our fundamental nature.

Our fundamental nature… are there aspects of it that we may want to dust off for the workplace? Or would that simply go against centuries of evolution theory?

Some of the most successful sales people I’ve worked with don’t appear to have embraced the great technological revolution. Their world doesn’t appear to move any faster now than it did five, ten years ago; they still listen and observe, like old-fashioned hunters. But wise hunters, who know that it will be easier to gather the prey when it approaches them rather than to chase it round in circles. (And they have embraced the good technology bits, by the way – just not the distractions.)

In a world where the divide between sales and service is increasingly blurred, similar key considerations apply. Sure, techs have to be more proactive. But, in getting the job done, they should never jeopardise the possibility to take in the environment around them, and consider how they may turn it to their advantage.

If today we live in the iWorld, then the ‘i’ can often be seen as standing for ‘instant’. And when great service is instant, everybody is happy – especially the customer. But, when a compromise has to be made between great service and instant service… compromise on quality at your peril. And, once you’ve got job done as quickly as possible, to keep your customers happy – why miss out on an opportunity to spend five minutes finding out what’s going on at a site? Why not try and gather further info that will increase your colleagues’ (and company’s) effectiveness?

If that’s what being hunters and gatherers is all about, then a “back to basics” approach (supported by technology for storage and analysis) is not necessarily a bad thing…

April 16^th, 2009

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

About a month ago, Managing Automation publisher Heather Holt-Knudsen wrote a piece called “Project 1985″. The article is both light-hearted and stimulating: in it, Holt-Knudsen sets out to live for a week without post-1985 technology (although, within a few lines, such total ban was lowered to using phone ahead of e-mail, not using one-line replies in e-mail, no texting, and only tweeting once a day).

The project never actually took off. In Part 2 of the article, Holt-Knudsen recognises that the issues that frustrate her about technology today do not actually lie within technology itself, rather in the way we have allowed ourselves to become addicted to it. As she points out, “Perhaps all I need to do is ease up versus completely give it up. It’s like what any successful diet requires: portion control.”

Information overload is a danger to which we are all exposed. Whereas in 1985 obtaining data was the key challenge, today differentiating what holds value from what does not is often the main issue. So, when technology does what technology should do (and lends a helping hand), it should be welcome. Turning our back on technology for the sake of it is not progress.

Back in 1985, my interaction with IT was limited to Nintendo handheld games such as “Donkey Kong”. But I remember with equal fondness University life, and research undertaken at library desks with paper books (remember them?) as Internet terminals were only just emerging - the nearest to a computerised search was the process through which you located the book you needed. So, for all the cursing I occasionally do when my Inbox is overflowing, I am forever grateful that I have the opportunity to do what I do at this moment in history - in an age when technologies are at their most interactive, interoperable (hey, when I started out on a Macintosh LC II I couldn’t share files with the rest of the world…) and deliver measurable results.

The same principles apply in Service. We sometimes curse at talking heads and IVR menus, longing for that old-fashioned human touch instead of technological abuse. At the other end of the relationship, somebody may well be counting the beans and the saved costs, though not necessarily the lost customers. But the technology in itself is rarely flawed: rather, we should marvel at what techies all over the world have achieved, and ensure their output is channeled in a value-adding fashion. When it improves productivity and the customer relationship, when it increases visibility over the Service operation and reduces costs, when it improves efficiency throughout the supply chain… basically, when it makes life easier for everybody involved, then technology has delivered upon its timeless promise. That’s the dessert we all wait for.

Now - where did I put that Rubik’s cube? Because let me tell you - you couldn’t find the solution online back in 1985…

By Shannon Rentner, Director, PR, Servigistics

Interactive Marketing is cool, innovative, slick, forward-thinking, and creative.  B2C companies that employ interactive marketing on their websites, in their ad campaigns, marketing collateral, etc. make companies with static websites and non-interactive collateral [what is the opposite of interactive?] look like Sunday school teachers from the 1970’s using flannel boards to illustrate Bible stories.

Consider some of these inventive examples of interactive marketing:

• Real women’s stories about financial planning for Wachovia Securities. What a refreshing way to present the client case study: http://www.planforwhatsnext.com/
• Remember Harold and the Purple Crayon? UPS tapped this magical marker idea for their whiteboard campaign where the long-haired guy illustrates what “brown can do for you”: http://whiteboard.ups.com/
• What if you live to be 100? How will you take care of yourself? Genworth Financial created the Genworth100, a website that featured the oral history of several centenarians as a way to pitch their financial planning services.

It’s entertaining, eye-catching, fun and informative.

But for B2B transactions, turn off the talking head.

When I’m sitting at my computer at the office doing research or evaluating potential vendors, I want the flannel board approach - let’s be old school: get me right to the point - something I can quickly read and process. Clear, Concise, and Direct.

Don’t make me sit there and listen to some dumb talking head spewing fluff. When I want a client case study, I’ll click on it and then it better be a good story illustrating what the potential vendor can do.  Otherwise, I’ve lost patience and will move on to the next vendor.

How does this relate to service?

The other day I was driving home from work and saw a car with ricohteknoforce emblazoned across the side and rear. So, when I returned to work, I decided to visit the website to see if this was another Geek Squad post-sale service play.  The answer: yes and no - more of a B2B IT outsourcing play.  Nevertheless, I was completely rattled by the talking man. I just wanted to navigate the page to see what Ricohteknoforce offers. http://www.ricohteknoforce.com/

Seriously, no one listens to it. So just save him for later. If I want to hear someone speak to me, allow me to click on it - don’t throw him at me while I’m sitting in an open office and pressed for time.  Consumers, on the other hand, have the time and privacy away from work to enjoy such leisure viewing and listening activities. I don’t.

But I also rip off the wrapping paper from my presents rather than slowly untying a bow, unpeeling tape, and neatly unfolding the pretty paper. Those people drive me nuts.

What do you think?

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Earlier this week, The Economist reported on how staff-motivation schemes may be feeling the impact of the recession. You may be experiencing it yourself: as corners are cut, those elements that are not seen as directly linking to revenue, and which take up time that could be devoted to primary activities, are most endangered. Of course, the line between perception and reality is blurred: as The Economist reports, “Towers Perrin, a consulting firm, found that between 2002 and 2006 companies with excellent records in motivating staff generated an average annual return over the period that was 9.3 percentage points higher than that of the companies in the S&P 500 stockmarket index”. Their message is clear: dismiss the value of motivation at your peril.

This article in last October’s Harvard Business Review did a pretty good job of pinpointing four key areas to focus on for motivating employees. However, in times of trouble, our focus shifts towards corporate stability, rather than individual benefits. We can go back to basics, and Maslow’s Hierarchy of Needs: we pursue Self-Actualisation and Esteem only when Safety is taken care of. When this is no longer a given, our perspective changes – and, with it, our behaviour. The best healthcare and pension plans in the land are worth nothing without a job underpinning them.

If this blog entry could guarantee you safeguarding your job, it probably wouldn’t be publicly accessible – and I would retire on selling the formula. But this is anything but The Age of Guarantees. Furthermore, how you go about re-engaging your staff (and yourself?) within your organisation depends on specifics that a generic entry cannot address. You should be aware, however, of changing behavioural patterns around you.

But I will make one point I believe is relevant to us all. As you look to cut costs, close that deal, refocus… don’t lose sight of the importance of customer service.

Companies that excel in customer service foster an atmosphere that improves both internal and external relationships. Furthermore, remember:

·         Winning a new customer costs as much as five times as much as retaining an existing one – and that’s before you’ve built up any loyalty or knowledge;

·         Customers who become advocates are an amazing marketing tool; unhappy customers are a potential barrier to growth;

·         Dealing with happy customers motivates staff. Solving issues for appreciating customers gives a great buzz. But dealing with unhappy customers, not being able to help them… that leads to high turnover rates. And high agency fees…

·         If your products and service are at the premium end of the scale, this is the time to be engaging with customers – to ensure you are not threatened by low-cost alternatives

This is not just about niceties. Even in a recession, excellent customer service makes sound financial, commercial sense – throughout your value chain. It’s only normal for you to lose sight of this, at times. But, if you let your competitors make the mistake on a long-term basis and you keep your eyes on the prize, you will come out of these time a stronger player for it.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Greetings from Paris.

That always sounds extravagant, doesn’t it? Well, don’t get carried away. I have a checkered history with accommodation in this beautiful city, and tonight’s tipped the balance the wrong way.

I am here for a two-day User Conference with our European Pricing customers. And ‘here’, more specifically, is the Radisson SAS near CDG: convenient, practical, respected. The sort of place you associate with good service; an impression that I have had reinforced in the past few weeks, during which I’ve dealt from afar with the hotel’s Commercial Department to get the event set up. Nothing has been too much trouble for them.

Then came tonight. I cleared customs, and duly waited for my shuttle bus at Terminal 2B. It’s a Sunday night, so I appreciate the service will be relatively infrequent. Some thirty minutes later though, having seen the Hilton’s shuttle go past me for the fourth or fifth time, it’s hard not to wonder.

A couple of hotel guests waiting with me are on the phone to the hotel, who assures them it’s ten minutes away. Trouble is, they had done that 25′ earlier - equally abruptly. Now it’s bad enough when expectations are mismanaged by the local pizza delivery joint: but this is a hotel brand that prides itself on service, leveraging it to charge a premium price. Does it know what’s going on? If not, why not? If so, why the blatant misinformation?

In the end, I waited 50′ for the shuttle. How long the other two guests waited, I daren’t imagine because when it finally arrived, there was only one seat available. Since they were travelling together, they kindly offered it to me. They weren’t as docile towards the driver or the hotel reception, over the phone. The waiting had been bad; the deceit, unnecessarily aggravating. I wouldn’t want to be in the driver’s shoes as he heads back to pick them up from here, which he seemed to be doing - even after Reception had guaranteed them another shuttle was already en route and would be with them five minutes after ‘mine’…

Whatever you sell, your customers are not idiots. Most customers tend to have greater patience than you may think. They accept things go wrong - indeed, fix their problems well and their loyalty will be higher than had they never existed. That’s why Dell showcases its Enterprise Command Center to illustrate how it helps its customers: because doing so exceptionally well is a true competitive differentiator.

What customers don’t accept is being lied to. That’s just insulting. While it’s no more insulting than it ever was, it is easier to get found out, since there are just too many sources of information available for customers not to verify what they’re being told. And it’s too easy for customers to share their dissatisfaction within minutes, as you are proving by reading this.

If you can’t always be truly exceptional, at least always be exceptionally true.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

When the company that’s owned the top spot in the Interbrand Global Brand List for the past eight years makes a move, others follow. Or, at the very least, they take note.

Coca-Cola has released… no, not its secret formula, but the carbon footprint of its various brands. That’s right: we now know that “a 330ml can of Coca-Cola sold in Great Britain has a carbon footprint of 170 grams and the same sized can of ‘diet Coke’ or ‘Coke Zero’ has a footprint of 150 grams. A 330ml glass bottle of ‘Coca-Cola’ has a footprint of 360 grams”.

So - what does that mean? Does it make Coca-Cola green, because it’s facing up to its corporate social responsibility and working on programs to reduce its footprint? Given what happened when it tried to improve its formula in the 1980s, could this be a key strategy for the company - as it leaves the product alone and looks at how CSR can enhance the brand? That was the view the Chief Executive took last year…

Will you soon be surrounded by analysts measuring your company’s carbon footprint? Or is that already the case? Of course, not everybody’s customers react as strongly as Coke’s when products are tweaked - most welcome changes. And, in companies where funds are harder to come by, product managers are still likely to shout louder. Yet this announcement is unlikely to remain isolated… would you bet against carbon footprint becoming an integral part of Annual Reports, alongside EPS and ROCE, in ten years’ time? That’s the way the Environmental Protection Agency is heading in the US…

But don’t panic just yet. Service can play a major role in reducing carbon footprint - all along boosting profitability. Cutting unnecessary trips through routing and scheduling and by ensuring techs have the right part, reducing inventory levels, improving remote support… it’s only natural to look at this from a business perspective, and to how it improves first time fill- and fix-rates, or calls/day. And there’s nothing wrong with that. But you know what? There’s nothing wrong in acknowledging that it cuts down your carbon footprint, either. That’s when it all starts tying together. Neat, eh?

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

I wanted to expand on the concept covered in the previous entry to explore a key benefit of excellence in service - one that is all the more critical in the current climate.

We have seen throughout this blog how service delivers profitability on a sustainable basis. It helps you retain profitable customers at a time when, rightly or wrongly (don’t get me started on this one - not here…) marketing spend is typically cut; it offers differentiation at a time that product commoditisation is rife. Sure, mass customisation is happening; but technology makes that easier to copy than differentiation built on people and processes; differentiation, that is, built on service.

So these uncertain times call for proven solutions and methodologies. As President Obama said on the steps of the Lincoln Memorial on Inauguration Day, “Our workers are no less productive, our minds not less inventive, our services no less needed, our capacity remains undiminished”. He was addressing a US crowd, but such statements ring true around the globe. Yet what these times are compromising is the critical link between that invention and the financial gains it stands to deliver.

Let’s take one simple example, since everybody else seems to be doing the same: Twitter. Do you tweet? I’ve only just started (feel free to follow me), out of a mixture of curiosity and fascination. The phenomenon itself is gathering attention, but so is curiosity over how it will make money. Indeed, is there any money in Web 2.0? I expect Apple and its network of independent iPhone Apps writers would merrily tweet ‘yes’. But, for many, the question mark (and the cloud of the previous dotcom crash) hovers.

With service, there are no such debates. There is room for constant improvement, in which technology (including Web 2.0) can play a significant part; but the fundamentals are a given. Look after your customers, and they’ll look after you. And, when the winds are howling and the levies are cracking, as is the case all around us, it’s imperative to ensure we excel at the basics before attempting to stretch. Many a great offerings have failed due to bad timing. But there is no such thing as a bad time for great service. Service always delivers.

That’s what makes service sexy. Because it’s not about comparing a sweaty technician with a funky website. It’s about knowing whom you can count on when it matters. And, if your customers can count on your service infrastructure to deliver, so can you - to deliver profits. And that’s always worth tweeting about.

By Shannon Rentner, Director, Servigistics

We’ve been saying it ever since I started working here: post-sale service can not only be a competitive differentiator, but it can also be a source of revenue. Yeah, yeah, and I sound like a broken record - oh wait, people under the age of 30 may not understand that reference to records….

In fact, service made the cover of BusinessWeek once again – but as fellow service blogger John Wild points out – “What was missing was the Business to Business sector in which extreme customer service is so important now.”

Wild also reminds readers that “the end business customers (those that rely on the equipment they’ve purchased or leased to remain performing or to be service ready) are a fickle bunch. They’re paying for performance (up time) and expect it. Let them down, and they’ll start looking elsewhere for products that perform better or that are serviced better. So this challenge hits right at home in the field service and service parts logistics environment.”

That means that the right part better arrive with the right technician at the right time at the right location…or else you’ll miss your SLA or the client will simply do business with someone else in the future.  

Why some many business publications fail to mention B2B post-sale service is perhaps due to the fact that it’s just not sexy.  After all, the fun comes from buying – not maintaining or repairing, right?

Wrong. Post-sale service  is sexy. It’s sustainable, socially responsible, profitable and catching on. Hope your business is ready!

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Earlier this month, we looked at the Convergence Economy – and how the paths of Manufacturing and Service are uniting to differentiate successful OEMs from tales of woe. That was less than three weeks ago – so what’s happened since?

Regardless of where you are reading this, some companies will have gone bust. Others will have made the headlines for their request for state assistance. When did interventionism suddenly become acceptable again?

There are fundamental economic issues, as well as moral, discussions to be had here – only ‘here’ is not the place. Servigistics’ concern, both as individual corporate citizens who now indirectly own a stake in some of the world’s leading brands as well as a corporation dedicated to helping leading global players, is that the companies who today benefit from State Aid will tomorrow benefit the countries supporting them – through taxation, innovation and employment opportunities. It is an aspiration which belongs to no political affiliation, but again illustrates how these are times of convergence.

State Aid that is not linked to a fundamental shift in strategy is unlikely to yield the long-term results required – and may only serve a political purpose (although, in the automotive industry, the concept of a “domestic car industry” is now blurred – or at best emotional). It is widely accepted, for example, that many problems in the automotive industry, while exposed by the downturn, were not caused by it – not least its tendency to run at full (and expanding) capacity regardless of the state of the economy. Sooner or later, something would have to give – and, boy, has it given. Which is why there is a sound argument (put forward by, inter alia, the likes of “The Economist”) for not supporting manufacturing – if all it is going to do is manufacture items nobody currently wants at prices nobody can currently afford.

Those “ifs” are the key to the argument. If State Aid enables long-needed business transformation and refocus on principles (e.g. R&D into alternative fuels, as is the case in the UK), then it goes beyond the purpose of a short-term band aid. Alternatively, it may be prolonging the agony at the expense of more creative organisations.

This is not the place for company-specific considerations. But, as we raise our heads above the water and consider what the post-downturn model may look like, here are some generic thoughts for you to dwell upon:

·         Companies that have mastered flexibility in both manufacturing and service are faring better in these troubled times;

·         OEMs that meet the convergence criteria in offering products and services are less likely to make the headlines for the wrong reasons;

·         When it’s genuinely customer-focused and market-oriented, innovation pays. Companies that have reached the top through innovation in their field should continue to enhance their proposition by focusing on core capabilities while enhancing their secondary capabilities through best-of-breed partners

by Shannon Rentner, Director, Servigistics

In a recent article in Manufacturing Business Technology, “Brains and Brawn: Manufacturing has a future in the U.S.,” AMR Research analyst Bill Polk discusses the future of US Manufacturing, or to be more exact, whether or not the US has a future in manufacturing.  This was a topic I reported on over 10 years ago as a technology reporter at the Austin Business Journal, but the focus was on wafer, or semiconductor, manufacturing.

At the time, Austin was trying to recruit more fabs, or wafer fabrication facilities, which was a big boon to the local economy. However, fabs were already going overseas in droves. And was that necessarily a bad thing for the American economy? After all, so the discussion followed, as long as the design remained in US-based companies, the US could maintain its leadership and places like Taiwan or Singapore were much more cost-effective than locations in the U.S. or Europe.  And workers could turn to service-related jobs.

However, it appears that the discussion has once again shifted dramatically. Perhaps it’s no longer about geographical and political boundaries - .ie. where a product is made or designed. After all, the new catch-phrase is GLOBALIZATION and most companies employ people of all nationalities - all the way down the proverbial food chain from C-Level Executives to Fab workers. Therefore, corporate entities often exist beyond country borders.  Here at Servigistics, a US-based company, I work with colleagues in Asia, India, Europe, and South America. We have the same goal: to deliver the best solutions and the best service for our clients, regardless of nationality or country origin.  And at the end of the day, we want our company successful because it’s what helps feed our families.

Now consider Sematech - the Austin-based Consortium that played a vital role in revitalizing semiconductor manufacturing and development in the U.S. at its inception. Today, it’s no longer about bolstering US semiconductor companies but now serves as the “world’s catalyst for accelerating the commercialization of technology innovations into manufacturing solutions. By setting global direction, creating opportunities for flexible collaboration, and conducting strategic R&D, SEMATECH delivers significant return on investment to our semiconductor and emerging technology partners.”

How does this relate to Polk’s article on American manufacturing? As another well-known analyst is known to say, “Manufacturing will continue to go East and service will head West.”  The problems in supply chains will continue to occur, but it’s simply a matter of growing pains. But post-sale service on those goods is another supply chain story and that will most likely remain regionally-based.

However, his final point concerning U.S. manufacturers’ “heritage of craftsmanship,” using Harley Davidson motorcycle as an example of US-based manufacturing, appears more of a marketing discussion than a manufacturing issue. Harley embodies an American concept, an American image of freedom and individualism on the open road. Would that change if some of the components were manufactured in China or India? What’s even more significant, IS every last piece on a Harley Motorcycle made here in the US?

That being said, we still want to be in touch with our own culture, our own region, our own locale. So Polk’s call for “products that are innovative in design and function, and of unquestioned quality” is a salient point.  But apart from food or local arts and crafts, the origin of where a product is manufactured seems moot.

But where do I go if it’s broken?

Selling global strategic service management solutions requires worldwide travel. So in addition to our blogs about post-sale service and the related solutions, we also want to offer our readers valuable hints and tips about places that meet the necessary standards for cleanliness, Wi-Fi connectivity, and thriftiness - all the while ensuring you can actually tell when you’re in Amsterdam rather than Düsseldorf, Paris rather than London – off the beaten “chain hotel” path. You’ll also find information on local eateries, running locations, and offer transportation tip for the cost-conscious but curious business traveler.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

ACCOMMODATION

Amsterdam is, unsurprisingly, awash with chain hotels - both in the centre and near Schiphol Airport. But the centre also features a number of small hotels built within traditional Dutch buildings. They lack the size and scale to command great star ratings, but how long are you going to spend there? Our favourite is the Bellevue, a recovered building with Wi-Fi throughout where the rooms offer comfort you’d expect for a lot more than the €77/night we paid (the beds alone just about warrant that…). But the hotel’s biggest asset has to be its location - just a few minutes’ walk from Dam Square, and literally two minutes across the road from Central Station. Breakfast is served from 7am on weekdays - when we were in town, the selection was broad (from cooked to staple Dutch ham and cheese), although the more time-constrained amongst you may need to allow for an extra few minutes as there was never more than one staff on hand.

FOOD

You won’t struggle to find a cuisine of your liking in Amsterdam. Indonesian and Argentine restaurants are all over the place, and there are even a few Italian and… er, Dutch places, too. On our last trip, we opted for an Indian meal at Moti Mahal, just five minutes from the hotel en route to Dam Square - and our hunch was rewarded with a fine selection.

After enjoying your meal, you won’t be short of options should you care for a pre-bedtime drink - either in a traditional Dutch bar, or in a more ‘international’ environment (the city’s not short on Irish or British-style pubs, which can be useful if you’re missing a sporting event). Just remember that “Coffeeshops” are not the best places for a coffee…

GETTING IN AND OUT OF THE CENTRE

When arriving via Schiphol, Amsterdam’s ring road is no smoother than most others in Europe - hopping in a cab can cost time and money. Since trains connect Schiphol and Central Station every quarter of an hour and take between ten and twenty minutes, costing just over €3, the railways offer best value on all fronts. It is also the reason why we prefer to stay centrally and travel in the morning rather than stay near the airport, if we have to make that choice - with additional savings on hotel costs.

MIND MY BIKE

You have little to fear from car drivers in the Netherlands. But watch out for cyclists! They will rarely stop, and could come at you from any angle. The Dutch pedestrians have little problem with this - each and every one of them has been, or still is, a cyclist themselves. But, if you’re not used to it, make sure you take every care.

RUNNING OPTIONS

To maintain your fitness, get on over to Vondel Park - in the south-west of the city. It’s not bike-free, but it’s a safer option than most.

OTHERS

Oh, one could write a whole book on this section… But we won’t bother. Just enjoy the canals. And, if your watch has GPS and indicates sea level, don’t look - or you might get a sinking feeling.

By Shannon Rentner, Servigistics

I love online shopping. No rude salespeople, no traffic, no hassle, just point and click. So when I do visit a Bricks-and-Mortar Store, I expect something a little extra - a personal touch - an experience, if you will. After all, I’ve taken the time to get in my car, fight Atlanta traffic, find a parking spot and walk in my five-inch stacked heels to the darn store, so once I get inside the establishment, please be nice to me.

The other day, I journeyed to the mall to visit a popular women’s store to purchase some hosiery for a black dress I had just purchased. This was the only store that carried what I needed - and I needed to wear that little black dress THAT night.

Upon entering, I found myself enthralled with the amazing sales displayed in the front of the store, so I sifted through some merchandise. Suddenly, a salesclerk appeared at my elbow and asked if I needed help. Since I couldn’t find my size for one of the sales items, I asked if she could find it for me.  Hence began the great SELL-A-THON.

Admittedly, I’m a sucker for pretty things, but I was outnumbered. The first salesclerk not only found my size, but also a number of other items in the same size. Then another salesclerk appeared and showered me with even more items that “would look just fabulous!”

I ended up with five unnecessary items and cringed when the salesclerk rang up the sale. As she handed me the receipt, she asked me to visit the website and comment on her customer service. I smiled and promised I would do so.

Then I returned to my house, ready to dress for the big evening out.

 I dumped out the items and searched for the hosiery. Alas, the only item I needed was not to be found. So I called the store. “Yeah, we forget to place it in the bag,” the salesclerk admitted on the phone. “Want us to mail it to you?”

No, I didn’t want it mailed. So I had to get back in the lousy car and drive back through Atlanta traffic to the mall. When I finally arrived in the store and asked for my item, the salesclerk said, “Yeah, well, wait a minute. It’s not like we keep those items at the front counter.”

Rude, but, whatever, surely they’d add something to my initial purchase to cheer me up. I mean, a little coupon, a free lip gloss, SOMETHING to make up for such LOUSY customer service. Who forgets to place an item in a customer’s bag?

The salesclerk returned, handed me the package, and said, “Want a bag with that?”

I said no thanks. And then she turned away from me.

 That was it. There was a perfect opportunity to secure my loyalty and they failed disastrously. Not even an “I’m so sorry for your inconvenience.” Nothing.

So I left the store, shaking the dust from my feet, never to return to that shop or their online store. That’s it. And I will certainly spread the word to all of my friends to ban that place and re-tell the sad tale of the clerk who forgot to place my purchase in my bag.

Moral of the story: Mistakes Happen - So recover from them with excellent service.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

For anybody who has just landed on Earth from a far-flung planet, here’s a very brief (and over-simplistic) overview of global economics:

• Once upon a time, people made things for people who would buy them. This was called the ‘Manufacturing Economy’;
• Then, as raw materials and labour, got expensive, people slowed down on making things, and spent more time selling things you could not actually touch or feel, such as financial products. This was called the ‘Service Economy’.
• Then a lot of people who had sold a lot of financial products suddenly realised there was a big hole in the economy, and thought that maybe making things was not that bad, after all. But people across the Service Economy had learned some valuable lessons about looking after customers once things had been made, too. So then…

Well, then is now. The next stage is the one we’re writing now. How is today’s history looking?

Our children, and our grandchildren, will be the ultimate of judges of that - if not in the classrooms, then certainly with their payslips, which will determine how many of our “financial programs” they find themselves funding. But some trends are already emerging - and could prove valuable for any Manager.

• Successful OEMs will need to master both Manufacturing and Service, providing both quality products and after-sales services. As Pierfrancesco Manenti at “Manufacturing Insights” predicts, “Manufacturers will enhance their capabilities as providers of services”. Excelling at either manufacturing or service may suffice in certain B2C industries, where replacement costs are ludicrously low; but they are the exception. And no strategy should be based upon exceptions;
• Successful OEMs must not forget what made them successful in the first place - and continue to leverage their core expertise while building new strengths around them. But that need not entail developing those new capabilities in-house - as we saw previously, collaboration is an effect of the downturn that has benefits to contribute in times of growth, too. And outsourcing / acquiring skills is nothing to be ashamed about if it allows companies to deliver excellence in the fields that made them leaders

Balancing the quest for in-house improvement with the ability to identify areas where procuring those capabilities externally is the wiser option will be a hallmark of any successful manager in the current downturn, during which ROI will be a key decision influencer. But this is a valuable skill that should not be thrown out with the doom and gloom when the economy starts to recover. Servigistics is a software solutions company, recognised as a leader in its field - a field that, while we may expand, we will generally stick to. Yet there are manufacturers who seek to maximise the value of their SSM operation by developing in-house solutions, when the cost of a Servigistics implementation could probably be covered by the savings realised in the additional development time of a bespoke product. I’ll leave you with that thought.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Everybody’s talking about it… and most people are doing it, more or less overtly. Are you?

 Consolidation (or its precursor - collaboration) is on everybody’s lips. Let’s take a snapshot of the automotive sector, where FIAT and Chrysler are heading down a route that covers both consolidation and collaboration, with the US giant handing over 35% of its equity in exchange for access to greener technology. Separately from this deal, FIAT have been rumoured to be in merger talks with French group PSA - talks both parties have denied, nevertheless enjoying a healthy rise in share prices as a result.

 Is the landscape much different in other industries? Hardly. From airlines to financial services, from recruitment to IT (where it is viewed as the “CIOs’ Top Priority for 2009″), whether you’re making stuff or selling services, the world around us seems to be experiencing a reverse tectonic shift.

 Determining the extent to which the trend will benefit consumers would keep the conversation flowing at many academic dinner parties. For the time being, we are still a comfortable distance from danger; and the times demand the type of knowledge-sharing in which some corporations are proactively engaging, and to which others are being called by government, such as the UK automotive sector, whose financial aid is subject to investment in green technology.

 Consolidation is changing the rules. What are its implications for Strategic Service Management?

 As with most challenges, it offers opportunities. Manufacturers can share common service parts and manage both those and their bespoke parts through common tools. Even before the commoditization of product, while the end results that we deploy at home and at work may be unique, the individual components rarely are - the art lies in their combination (and marketing), but a bolt is a bolt just like a 60Gb hard drive is a 60Gb hard drive. And, regardless of the logo on the machine on which you are reading this, your brand of hard drive or processor may not be dissimilar to that of the guy two floors below you, checking the weather forecast on a totally different machine.

 Creativity is also expanding outside of R&D departments, and into the CFO’s office. Is owning your own inventory compulsory? No - providing you are still able to deliver first-class service. And if you can do that by pooling your inventory with other companies in your field… who loses out?

 There is nothing blasphemous about this. Times of crisis often bring sworn enemies together for the greater good. Over the coming months, this will often keep M&A lawyers busy - with the emphasis more on ‘acquisitions’ than ‘mergers’, regardless of the press releases. But, now that the technology enables it, keeping conflict at bay, there remains ample scope for cost-efficencies through collaboration.

Shannon Rentner, Senior Manager, Servigistics

Driving home from work the other evening I was listening to the radio and heard a commercial for AT&T’s new service: ConnecTech. Now, when I first heard the announcer say ConnecTech, I honestly thought he was saying “Kinetic” but with an initial “o” sound.  So it’s a difficult to pronounce name, it goes to show that service is selling.

Forget about Target partnering with Zip Express. The new belle at the ball who claims to “out-Geek” Best Buy’s Geek Squad (forgive the mixed metaphors) is AT&T’s ConnecTech, which is now available for residential customers in all 50 states, whether they use AT&T or not. Customers can request home theater installation, computer and home network setup, and a host of TV, computer, and network repairs - all right at home.

So, I may not need AT&T as my cell phone carrier and I may already have a DSL provider, but I certainly will need help at some time for a malfunctioning computer or a broken plasma TV that I won’t want to lug into the local electronics store.

So once again, it comes down to the service - especially when spending for new products is almost nil.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Long-term… How do you define long-term?

Whatever your answer, I have little doubt that it is a shorter timeframe than the one you’d have volunteered five years ago - and equally so that it is a greater timeframe than the one you might volunteer in five years’ time. On the most basic of graphs, we can imagine an inverse relationship between how we perceive “long-term” and the impact of uncertainty - in itself, rising:

Fig. 1: The Growing Burden of Perceived Uncertainty and Short-Termism

This, in itself, is nothing new -

jump in a time machine and you’ll find the graph holds true throughout history. That’s why I cautiously talk about a ‘perception’, rather than a reality - and show those two components plateau out, as beyond a certain level they cannot continue their respective paths. However, some argue that, whereas in the past periods of disruption were followed by stabilisation, as keeping up with the pace of progress set by revolutionary advancements was simply impossible, we have now entered “the age of constant disruption” - with technologies continuously evolving at a constant rate. Add into the mix the speed at which information can flow and people be mobilised, the interconnection of our financial markets, and you have to seriously question whether “long-term certainty”, as prior generations understood it, will ever return.

So - why bother with strategic planning? Why not live from one day to the next? After all, whether you’re an outgoing US President, an embattled UK Prime Minister or any other world leader, you’re probably blaming the state of the economy on factors beyond your control. And if the White House and Number Ten aren’t in control of their destiny, what chance have you or I got?

Do not be mistaken - the overwhelming strength of external forces is no justification to abandon ourselves to their pull. Quite the opposite: now more than ever, strategic planning is fundamental to success. Equally critical, however, is the ability to plan with flexibility - and review individual components on a daily basis without compromising on the bigger picture.

That is why Strategic Service Management (SSM) is critical during a downturn. SSM brings together the tools to measure progress towards goals for “old school long-term” and daily, indeed hourly, operational KPIs - the performance that matters to customers, more concerned with your ability to meet 4-hour SLAs than 3-year grand plans. Companies that lock those grand plans in a cupboard for a thousand days are unlikely to succeed not only in the current downturn, but also in subsequent periods of growth (hold on tight, they will come) - for they too will be uncertain, and require swift action. Where yesterday rapid reaction sufficed, today preemptive action is necessary - and that’s what Servigistics’ solutions enable, across all levels of management, delivering tangible results.

From having the right part to pricing it correctly, from having the right technician on the job to optimising the flow of information and enjoying a holistic view of your service business, even when it seems as if the world all around you is crumbling there are plenty of key components of the jigsaw you hold securely in your hand. Servigistics provides proven SSM tools to place them in the right place - and claw back some of the certainty for which you so rightly long.

By Sebastian Urbina, Product Manager, Servigistics

With the worst economic crisis in decades, it is understandable that companies, and people, for that matter, are looking for all ways to reduce expenditures, too bring costs down.  However, is this the best of ideas? 

However, there is a flip side to this.  Consider this situation.  You are choosing between two plumbers, both seem to be equivalent in terms of skills, knowledge and functionality; however, one is 15% more expensive than the other.   But what happens when you your toilet backs up at midnight after you are paying for the night of bad Mexican food?

Who is most likely to show up quickly before the water exits the bathroom onto the bedroom carpet?  The plumber that charges an average price to or the one that charges above average prices.   Remember, both can get the job done.   Since both you and the expensive plumber know that you could get it fixed cheaper, you’d expect the expensive plumber will provide better service to ensure repeat business.

This phenomenon has been studied in terms of paying employees more.  Efficiency wages have been discussed extensively since deciding to pay $5 a day, doubling the salary of most workers in 1914.  There are all sorts of benefits from efficiency wages, but they can be summarized simply by “those who get paid more work harder.”

I believe the same occurs when you pay for service or anything that is continual and will result in repeat business.   It becomes particular important when you are paying for use of a resource that is constrained.  Consider you are one of the many airlines that run on the same engines.  In an airport, there is a freeze over that breaks the engine of all airplanes on the ground.   All the airlines have a maintenance contract with the same manufacturer.  However, since this is an unexpected event, the manufacturer can not provide service to everyone.  Who do you want to be, the company the pays the lower maintenance fee or the one the pays the highest.  Even if the contract is the same for both, who do you think will be able to fly the planes faster?  Without a doubt it will be the one that pays the most money.  When decisions need to be made on how to allocate resources, resources get allocated to those that produce the most revenue.

Another example is software licenses.  You pay for maintenance upgrades, improvements and support.  Let’s say two companies are asking for different enhancement requests of equal complexity.  They both run the same software and have similar contracts.  However, there is a fixed number of developers that can get the enhancement finished.  Who do you think is going to get their request finished first?  Everything else being equal it will be the client that pays the most.

Paying more has its benefits.  You are able to demand more.  However, this only works when there is a promise of continual business.  Paying more for the same computer from Best Buy if it comes with a service contract will be worth far more than some cheapie off the internet - at least when a virus wipes out your hard drive and you need it repaired/recovered.

As times become worse and if the economy doesn’t improve, consider when you to cut costs what it actually means to pay less.   In theory, when you cut the cost it might not been much, but in situation when you need the service, it might just no be worth it.

Make it, Sell it, Service it

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

If you’re struggling as a manufacturer in the current climate (or if you want to avoid membership in this club), there is an article out there that is well worth your time.

It may well be that you’ve already caught “Britain’s Lonely High-Flyer” in this week’s “The Economist” - or maybe its introductory piece, “What Rolls-Royce Can Teach Britain”. Both articles look at Rolls-Royce, and how “the way in