The Uptime Blog
For software vendors like Enigma, doing business in the aviation industry – with OEMs, airlines and MROs – almost always means answering RFPs (Requests for Proposal).
The scenario is a familiar one. Business and IT managers decide it is time to check what is the “latest and greatest” out there. They sit down (or pay a consultant to sit down for them) and fill out dozens of Word pages and Excel spreadsheets specifying all the requirements and features they would like – real and imagined. They send the RFP to several companies, usually a mix of loosely connected software vendors and systems integrators. Even though the process of writing the RFP will take them months to complete, they will invariably ask the RFP recipients to submit their responses within a ridiculously short time frame, say two weeks. The process then typically entails on-site workshops with shortlisted vendors, followed by several months of back-and-forth discussions about requirements, scope, commercials, terms and conditions, etc. A year or so down the road, assuming internal budgets are approved the two exhausted parties – customer and vendor – finally sign a contract and kick off the project. By this time, strong imaginative acumen is necessary if one is to find strong resemblances between the original RFP requirements and the project SOW (Scope of Work) document.
Can things be done differently? This article, recently published in Inc. Magazine, suggests a radical approach for vendors who receive an RFP: just say no. The article lists seven reasons why companies should walk away from RFPs, the more salient ones being:
- Diluted differentiation. Because the RFP goes out to vendors whose solutions and value-adds differ widely from each other, the result is an “apples vs. oranges” comparison that is doomed to fail. By responding to the RFP, vendors are thus agreeing to be judged almost exclusively on price.
- Playing by the customer rules. Yes, the customer is king. But does the king always know best? Most of the requirements and features are, at best, “nice to have” and in many cases totally unnecessary. To get to the short list, vendors answer “yes” to essentially all of the requirements, knowing they will find a way down the road to eliminate or modify them.
- Most RFPs are rigged. This might sound a little harsh, but even if they are not rigged, in many cases a vendor close to the customer lent a “helping hand” in shaping the RFP requirements and conditions to favor its own solution. This requires the other “competitors” to jump through hoops just to qualify through to the next stage.
So what is the alternative to answering the RFP? The article suggests sending a short, polite letter to the customer extolling your solution’s value and proposing a direct discussion. Chances are, concludes the article customers will circle back to you after failing to implement the cheap solution they selected in the RFP process.
Can this approach work in the aviation industry? Can software vendors ignore RFPs from OEMs and airlines, placing their faith solely in the merits of their solutions? A colleague of mine pointed out that this approach is wishful thinking when it comes to the conservative aviation industry. Innovation is slow, regulation is binding and procurement rules mandate the issuance of an RFP. For a vendor to win business in this industry, RFPs are the only way in.
I agree. It is indeed almost impossible to do business in the aviation industry without answering RFPs. But after many years of selling into the aviation industry (and countless hours working on RFP answers), I believe vendors should adopt a more sober approach to RFPs. Gone are the days when customers would issue an RFP for an IT system and expect software vendors to jump to attention and do their bidding, costs be damned. In these harsh economic times, when customers expect heavy discounts and concessions from vendors, the “my way or the highway” approach no longer works. Vendors simply cannot afford it. Too many vendors have been driven out of business because they had no choice but to play by the rules dictated by the RFP processes. No more.
A sober approach to answering RFPs means qualifying directly with the relevant stakeholders if this is a real opportunity or just an exercise in knowledge gathering or idea fishing. It means stating clearly in the RFP answer which requirements are nothing but fantasies that will cost a lot to implement but will deliver precious little benefit. It means scheduling more online demos and conference calls and fewer on-site visits. It means not caving in to terms and conditions that guarantee financial loss in project implementation. And, most importantly, it means knowing when to walk away from an RFP and nurture direct relationships instead, thus foregoing the immediate (and probably imaginary) opportunity for a future (and more real) opportunity.
I know; easier said than done. As writing and receiving RFPs remain an inevitable part of aviation maintenance business, I urge you to download our free RFP sample, here: MRO: Requirements for Maintenance, Repair and Overhaul, to make the task less formidable.
Aberdeen Group, in its Field Service 2013: Workforce Management Guide, reports that “financially, leading [field service] organizations experienced a 9.6% year-over-year increase in revenue, ahead of the 6.6% increase driven by all other organizations.” That’s pretty impressive and shows significant profit.
The companies achieving that success have done so by becoming best-in-class organizations employing best-in-class strategies. Those strategies involve planning, executing the plan, and then re-evaluating the plan in a continuous improvement loop –a process that Aberdeen identifies as “performance management.” Aberdeen has found that performance management “plays a central role in enabling better plans and the strategies required to execute those plans.” And best-in-class companies, those earning higher year-over-year revenue than others, consider it a key area of investment for 2013.
The report goes on to identify five strategic actions that top performing field service organizations take to reach that revenue grabbing, best-in-class status.
What caught our attention about these strategic actions is how closely they align with the functions and features of a best-in-class electronic parts catalog, in particular Enigma’s own InService EPC, which helps service organizations realize success.
There are three ways InService EPC helps companies become best-in-class service organizations, which leads to higher year-over-year revenue. In essence, we help them make money on field service. Let’s take a closer look at each of the three points to see how.
1. Investment in mobile tools to provide technicians with better access to information in the field.
By its very nature, an electronics parts catalog (also known as an illustrated or integrated parts catalog) puts critical parts information at the fingertips of service technicians, wherever they may be working. InService EPC improves on that functionality in several ways.
First, it delivers all service information so technicians have installation, repair and replacement instructions for those not-so-familiar or less frequently performed procedures. This extends the experience of your staff, shares knowledge across all skill levels, and allows management to more effectively schedule work schedules since the entire team has access to the same service knowledge base, not just specialized staff.
Second, InService EPC ensures that service technicians not only have parts and service information they need readily available, but that it is the most accurate and current information that engineering and tech pubs can provide. Using the incremental updates feature allows new or modified materials to be updated in smaller batches, rather than the whole database of information, which results in faster distribution of the latest information to the field service teams. This helps reduce parts mis-orders by eliminating outdated or obsolete parts and service information.
Third, InService EPC was designed with flexibility for field mobility rollout in mind. Multiple devices and operating systems are supported, including laptop and tablets, from privately hosted or cloud hosted SaaS. Users can access InService EPC via web (online) or wireless, or run as standalone units offline in environments with no connectivity or with limited connectivity such as hospitals and high-security environments. Print distribution is available to output hardcopy of specific parts, assemblies or sections or whole service updates.
2. Make captured service information available across the enterprise.
Enigma InService EPC has two key features that support system-wide communication. Enigma InService EPC is based on an open architecture Enigma 3C platform, enabling integration with back office applications such as warranty, diagnostics, inventory and ERP systems. It easily integrates with the information systems that are critical to field service operation. Also built into InService EPC is an e-notes feature for on-the-job creation and viewing of collaborative information for maintenance and feedback associated with parts, assemblies, or manual sections.
3. Improve forecasting of and planning for future service demand.
In order for performance management to be effective, a means of measurement needs to be in place that provides insight and information to the executive team. Enigma’s Dashboard reporting feature provides that measurement. The InService EPC Dashboard is a newly created executive management tool that captures and displays EPC activities and purchases, presenting them as easy-to-read charts, highlighting pre-defined key performance indicators (KPIs). Insights gained from the Dashboard can be used to optimize aftermarket service and parts processes—those recurring activities that drive the most profitable part of the business.
Contributing so much to a field service company’s best-in-class status seems like a lot to ask of a humble parts catalog. But Enigma’s InService EPC boasts of advanced capabilities that play a significant role in improving the service revenue through performance management.
Field service isn’t what it used to be. While it may have taken a back seat to new product sales in the past, recently it has become a more vital part of ongoing profitability for complex equipment manufacturers (OEMs). More complicated equipment, high demands on uptime, advancements in technology, and improvements in communication and information sharing have demanded that field service not only support new product sales, but become an active contributor to overall company success.
Mobility and Integration Will Drive Field Service
As VP and principal analyst for service management of the Aberdeen Group, Sumair Dutta has studied the field service industry. He understands more than most what makes best-in-class service providers valuable contributors to the viability and profitability of their business organization. In this short field service video, Dutta identifies what he sees as the top two trends in today’s field service organizations. We’ve expanded on his brief points and added Engima’s perspective on the topic.
Investment in mobility for field worker empowerment. Businesses are realizing that mobile technology – both hardware and software – can give their field service technicians a tremendous competitive advantage. In 2013, manufacturers are planning on improving the quality and timeliness of information provided to field workers so they can get their work done efficiently, on time, and within the first visit to the customer site.
Integration between field service and other elements of service business. Field service no longer operates in isolation but is an active part of the overall business environment. One area of particular importance is parts catalog software that extends the reach of the field service technician so they have access to the same resources as the rest of the service team. Enigma’s InService EPC does just that.
InService EPC is an electronic parts catalog that integrates with back end software systems such as field service management (FSM), enterprise resource planning (ERP) and product lifecycle management (PLM) to broaden the level of information available in the field. Having direct access to inventory, pricing, service notes for installation or repair, as well as the ability to directly order parts from the field goes a long way toward improving first-time fix rates.
More detailed information on the field service topic can be found in Dutta’s Field Service 2013 Workforce Management Guide. In it he concludes “improved efficiency and productivity continues to be a top goal for field service organizations in 2013.”
Mobility a Field Service Change Agent
David Krebs, VP of mobile and wireless for VDC Research, in the Field Mobility 2013 Analyst Outlook also considers mobility to be a field service change agent. In the report he writes:
“In terms of mobile technology, we are in the midst of a perfect storm with a combination of a rapidly declining cost of mobile adoption, advancing mobile processing capabilities, and expansive wireless network coverage.”
Krebs confirms that mobile and wireless solutions to automate processes improve field service operations. He goes on to say that the “real benefits realized by mobile solutions among field service leaders include:
• 18% increase in field service visits per technician
• 25% reduction in service calls per ticket
• 40% increase in service revenue contribution per technician
• 30% reduction in logistics costs (as a percent of operational costs)”
Those are impressive statistics on how integrated mobile field service tactics can contribute to a company’s profitability. As more field service organizations realize their potential, the more concerted effort will be to improve the overall service experience.
As Dutta concludes in his video, customer service and field service in particular are becoming a more integral part of the overall business success and profitability. Companies are beginning to fully understand the financial impact of satisfied and retained customers. They’re making the connection that customer satisfaction leads to customer retention, which in turn leads to higher revenue margins.
It’s not pretty. It’s bad for business, painful to work with, and costly to maintain. It damages customer loyalty. So what is it?
Dirty data – and it is slowly clogging up revenue streams and shrinking profits for countless unaware or indifferent U.S. companies. It’s costing over $3.1 trillion of lost revenue every year, according to industry expert Hollis Tibbets who notes, “that’s twice the size of the Federal deficit.”
What is Dirty Data?
Techopedia says that dirty data refers to data that contains erroneous information. It may be misleading, incorrect, inaccurate, duplicate or non-integrated data. It could violate business rules, be outdated, incomplete, contain spelling or punctuation errors, or be unstructured without generalized formatting. In some cases hard copy data can also be construed as dirty since its non-digitized formatting cannot be easily accessed and shared. And although some businesses pay attention to keeping their data as clean as possible, their work is never done. New products, new parts, new service information, changing part specifications, updated service instructions, manual data entry, and countless other reasons can all muddy the water.
Dirty Data in the Field
To support the aftermarket maintenance of complex machines and equipment, manufacturers (OEMs) publish and distribute large quantities of technical information for themselves (service and field service maintenance technicians), their networks (usually dealers and distributors), and even their end users (customers or third-party vendors such as authorized service providers).
Often the data used in the field includes parts catalogs, maintenance manuals, troubleshooting guides, service bulletins, installation guides, schematics and marketing collateral. This technical documentation is at the heart of an OEM’s long-term success, because it enables effective customer support, which is a key driver of cross-selling, up-selling and brand loyalty.
Dirty data in the field wreaks havoc on aftermarket support. Distributing erroneous part information and service instruction to service technicians unnecessarily extends equipment downtime. It lengthens the time needed to perform a repair and adds excessive cost for the customer leading to frustration and lack of loyalty. It leads to second guessing by field service, resulting in needless calls to the help desk on routine matters and hidden inventories of unreturned alternate parts and “trunk spares.” Clean data, on the other hand, enables technicians to provide fast and accurate aftermarket support with confidence, ensuring high levels of customer satisfaction.
Customers expect to find OEM parts and service information online, rather than in DVDs or paper catalogs, and they expect it to be accurate and well organized, in the form of an electronic parts catalog (EPC). Customers will take their business elsewhere if the OEM doesn’t make it easy for them to figure out what’s wrong with a machine and find and purchase the necessary parts. The OEM’s goal should be to ensure that customers can quickly find and order the right part, procedure or service bulletin online. An electronic parts catalog with a centralized knowledge library like InService EPC makes that possible.
Clean Data for Aftermarket Profit
The importance of clean data in the aftermarket can’t be overstated. Aftermarket parts and service is a significant source of revenue for companies that manufacture complex equipment and machines. Morris A. Cohen, Professor of Manufacturing and Logistics at the Wharton School, University of Pennsylvania and Chair, MCA Solutions Inc., writes about aftermarket profitability and predictable revenue:
“The sale of parts and services to provide aftermarket support represents a significant portion of a firm’s business (25% to 50% in most industries). Typically, these sales have some of the highest margins, providing, on average, 45% of profit. At the same time, the market share of the lucrative aftermarket business is low for many companies. A Deloitte benchmarking survey found an average 40% share for services and a 70% share for parts sales. Capturing service revenue is important as it generates a recurring revenue stream, which is much more predictable than the uncertain revenue from new product sales. The design and delivery of new “service support products” represents an opportunity to increase both revenue and profit on a consistent basis.”
Clean Data Makes for Clean Business
Real-world parts and service information is constantly changing, which makes consistent formats, presentation styles and navigation hierarchy critically important. Adjusting to structured data standards may take some getting used to but is the only proven path to success to ensure that aftermarket data is clean, scalable and profitable.
Some companies are able to take on the task of prepping data for integration into an electronic parts catalog. They are organized, structured and persistent enough to make it happen. But most gratefully accept the help of knowledgeable professionals like Enigma who are skilled in database integration and electronic parts catalog software. Together with our data conversion partner, DCL, we collect, map, format and prepare all sorts of technical documents such as paper, scanned paper PDF, textual PDF, Word, CSV, XML and SGML so it is all available and searchable.
And—more good news—companies can start small in prepping their data. Preparing and testing data on a limited scale, such as a few selected product lines or a single region teaches valuable lessons in data management that can be useful for a fuller rollout. It illustrates immediate ROI benefits and allows for more efficient inclusion of other products and regions, in greater detail, later on.
Getting Squeaky Clean and Polished
With over $3.1 trillion of lost revenue every year attributed to dirty data, there’s plenty of room to tidy up. Enigma has prepared a white paper – Seven Steps to Put Parts and Service Information Online – to get you started. Not surprisingly, it concentrates on cleaning up the dirty data so you can deliver the right information to the right person at the right time through the right electronic parts catalog. It’s no secret that cleaning up data and streamlining its distribution to maintenance and support staff will help aftermarket revenue flow more freely and companies find their lost profits.