© 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
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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)
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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
© 2007- 2016 RTM Consulting, Inc. All Rights Reserved. 8
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
© 2007- 2016 RTM Consulting, Inc. All Rights Reserved. 9
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)
$6.5M
Organizational Redesign
Parts and Vehicles
Other Cost Opportunities(Labor Utilization / Channel Optimization /
Travel / Other
Organizational simplification Ops consolidation/more
shared support Improved operational and
client performance Improved decision and
execution effectiveness
Case Study #2 - Optimizing Cost (Vehicles)
• Multi-national/multi-$B technology firm
• 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
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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
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TSIA Benchmark
Followed a Structured Process
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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
<$800
Case Study #3 - Labor Optimization
• Multi-national/multi-$B technology firm
• 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
© 2007- 2016 RTM Consulting, Inc. All Rights Reserved. 13
• 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
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Channel Optimization
(Shift Left)
Followed a Structured Process
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 ($12M) and drivers:
• Utilization (partial yr.)• Non-conforming WOs -
(improved FTF)
• Utilization (Full yr.)• Non-conforming WOs -
(improved FTF)
© 2007- 2016 RTM Consulting, Inc. All Rights Reserved. 15
Some Mini-Case Studies
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Revenue Growth
• Multi-$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)
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)
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