From the Top
- Executive to Executive -
Recently, RealMarket had the opportunity to spend time with Dr. Moshe BenBassat, Chairman & CEO of ClickSoftware, a provider of software solutions that enable organizations to maximize field service delivery. Dr. BenBassat shares his vision of service optimization and discusses how companies are learning to service more customers per day with the same or fewer resources.
Dr. Moshe BenBassat,
Chairman & CEO, ClickSoftware
RealMarket: Good afternoon, Dr. BenBassat. Let’s start by talking about the world of CRM. How does your view of service optimization fit into the world of CRM?
BenBassat: I would first say that service optimization goes far beyond CRM. Let me give you an example. Consider a customer of a utility company who calls in with an issue. The agent will start by recording the problem, verifying the customer’s address, and the status of his contract. The CRM system may also suggest wishing the customer a happy birthday, if appropriate. Well that is all great and important but then comes the moment of truth when the customer asks: “When will someone be here to fix my problem?” This customer typically is not alone, and there may be hundreds of customers all calling at about the same time, all wishing to have service as soon as possible. On the other hand, there are only that many technicians who can respond to these customer calls. In order to effectively and efficiently answer that question, the utility company needs to consider the technician’s skills, availability, drive time, service level agreements and a host of other parameters. The company challenge is to manage the delicate balance and trade-off between maximizing the utilization of technicians while complying with service commitments to its customers. While CRM products deal with data processing, service optimization products deal with automatic decision support for these kinds of questions.
| Service optimization creates a win-win situation by driving down the size of the service window. |
RealMarket: So, is service optimization simply a matter of getting more out of your technicians?
BenBassat: That is certainly a big part of service optimization but it goes beyond utilization. It is also about setting expectations and delivering to those expectations. For instance, we can all relate to half-day service windows where we have to wait for the technician to arrive. It is very frustrating and unproductive. Service optimization creates a win-win situation by driving down the size of the service window. The company can schedule service appointments more intelligently so that the customer has more accurate expectations of when they can expect to receive service.
RealMarket: It appears that demand for CRM solutions is on the increase. Are you seeing the same demand for service optimization?
BenBassat: We have seen a great increase in demand. The Gartner Group has reported that service companies are looking for new optimization solutions to help them differentiate their service offerings. Last year, our annual growth was 44% and we believe the demand for optimization solutions goes far beyond the demand for traditional CRM applications.
RealMarket: Can you provide an example of how companies are using service optimization to improve their operations?
BenBassat: Certainly. Recently we shared a press release about how Maytag has made significant improvements. In the past, when a customer would call, the agent had no way to provide him/her with a good estimated arrival time on the spot. Using our solution, Maytag has made dramatic strides in guaranteeing that a technician would be there within a specific timeframe. With the right tools, Maytag now can coordinate this at the individual technician level. By the end of the year, they will have rolled it out across the United States.
RealMarket: OK, your Maytag example talks about improving customer expectations. Are there operational savings?
| Being able to deliver more calls with the same field force goes straight into the bottom line of the company because the operating expenses remain at about the same level. Beyond the utilization of the technicians, we often see better utilization of the dispatchers. |
BenBassat: Of course. We have documented case studies making double digit productivity improvements, measured in number of jobs per technician per day. Being able to deliver more calls with the same field force goes straight into the bottom line of the company because the operating expenses remain at about the same level. Beyond the utilization of the technicians, we often see better utilization of the dispatchers. Traditionally, the ratio of dispatchers to technicians has been between 1:10 and 1:15 because there is significant effort to maintain the schedule. With our solution, the ratio can increase to 1:50 or even 1:100 because the schedule is now being automatically managed by the computer up to a small percentage of exception handling which is managed manually. We have a customer in Canada that reduced the number of dispatchers from 75 to 25 resulting in millions of dollars of savings.
RealMarket: You’ve talked about the utility and appliance industries. What other industries can benefit from field service optimization?
BenBassat: Telecommunications, computer and office equipment, medical equipment, heavy equipment and home services are all major industries that can benefit. In addition, we are working with other very large companies outside these sectors. For instance, a major beverage company must keep countless vending machines up and running. There is a significant incentive for them to service vending machines as quickly as possible because an inoperable machine produces zero revenue.
RealMarket: What do you see as major trends in the world of service optimization?
| Service optimization software is enabling another trend in the service world which is a move towards centralization and managing larger pools of employees under one system. This produces economics of scale that could not otherwise be realized. |
BenBassat: Mobile devices are enabling real time optimization and thus are taking productivity optimization to new heights. A technician can now send update messages for example that his two hour job will now take four hours. The scheduling optimizer can look for other technicians that can cover this demand and can re-route technicians in real-time if required. The opposite applies as well when technicians on a two hour job might complete it within an hour. The nature of daily scheduling is handling surprises. That’s why real-time optimization is such a great opportunity. Service optimization software is enabling another trend in the service world which is a move towards centralization and managing larger pools of employees under one system. This produces economics of scale that could not otherwise be realized.
RealMarket: Are you worried that the big CRM vendors will add functionality to their suites that will make your offering obsolete?
BenBassat: Actually we are working with several CRM vendors that understand that it would take a long time for them to develop their own capabilities. PeopleSoft and SAP both partner with us and normally refer their customers to ClickSoftware. System integrators like IBM Global Services and Accenture are also seeing quite a bit of business in this application area. These and other system integrators tend to involve ClickSoftware’s products in their offering.
RealMarket: So with whom do you compete?
BenBassat: ServicePower a UK-based company is a competitor. However, we have by far the largest number of deployed customers that are using our system day in and day out. There are other field service companies that offer traditional service management solutions with some simplistic decision making capabilities, but I see them more as complementary players, not as competitors.
RealMarket: What is the top issue keeping you up at night?
BenBassat: Managing profitable growth is probably our biggest challenge. Our pipeline is rich and the market momentum is strong. We see strong demand coming from a variety of verticals in all parts of the world. The challenge is how to expand into verticals and territories, with the right timing and size, so as to maximize the growth that the market currently offers while minimizing the risk of delays and slowdown.
RealMarket: Let’s talk deployment. How easy is it to implement these solutions?
BenBassat: As I mentioned earlier, we have the most service optimization solutions up and running. So let’s frame deployment in terms of the best practices that we see working today. First, it is critical that there is an initial assessment and specification of service policies and service processes. We spend the time to get all the details and summarize it in a working document, so deployment typically flows very well. A critical step towards the end of deployment is the tune up of the company’s service policy so that the computer produces service schedules which are in perfect harmony with this policy. We have developed a unique methodology and tools to conduct this phase successfully and effciently
RealMarket: Are there any other deployment “hot buttons” that you can share as best practice?
BenBassat: One other issue is data quality in the systems we interface with. For example, do these systems have a current and accurate view of technician skills and job duration? If the database is corrupt or incomplete, there is not much we can do about it. We recognize this as a critical factor, so we outline to customers the implications of inconsistent data early in the process and offer ways to manage them. Change management within the organization is also a key success factor. After the implementation you now have the software making many decisions. Often there is a challenge to gain the trust of the dispatcher because there can be a conflict between the way the dispatchers used to work “in the old days” and the way the system works today. To mitigate those issues, we offer a change management program that is part of our deployment methodology. I am proud to say that in the past 36 months the vast majority of the companies who bought our products also succeeded in the implementation and in realizing measurable value from these products. This is a remarkable achievement in the world of enterprise software.
| At the end of the day, to be successful, an organization must manage the immediate term, short term and long term needs so that service delivery to customers will be according to expectations while operating costs are minimized. |
RealMarket: What is next in the world of service optimization?
BenBassat: As more companies utilize this technology they will realize that daily scheduling is only the first link in the service decision-making chain. While scheduling addresses decisions at the 7 hours to 7 days horizon, there is also a need for decision support in tactical resource planning where companies deal with the 7 weeks to 7 months period for vacation approval, training planning and contractor’s availability. Looking further down the road, come the challenges of long term capacity planning and forecasting where the decision horizon spans 7 months to 17 months ahead. In the world of manufacturing these challenges are well recognized and techniques and software products exist to manage them. For instance, the well known MRP (Material Requirements Planning) concept is designed for tactical planning of raw material. In the world of service, where the primary resource are people, we call it workforce resource planning or WRP. At the end of the day, to be successful, an organization must manage the immediate term, short term and long term needs so that service delivery to customers will be according to expectations while operating costs are minimized.
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