MAKING THE CASE FOR Outsourced Services in Post-Sale ...€¦ · MAKING THE CASE FOR . Outsourced...

MAKING THE CASE

MAKING THE CASE FOR

Outsourced Services in Post-Sale Supply Chain

(SSC)

MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)

onprocess.com • OnProcess Technology • 2

It’s no wonder that a 2016 study from Forrester

Research found that 72% of businesses say

improving customer experience is their top priority.

Senior executives know the effectiveness of the

service supply chain—their SSC—is critical to

success. In fact, a study by CFO Research found

that 83% of companies believe that they can boost

customer satisfaction by improving the quality

of post-sales service. However, 75% said their

companies could substantially improve their current

post-sales service.

In short, we know that improving after-sales service

is essential, but getting our arms around how to

achieve that, and then having a platform to execute

processes optimally, is the hard part.

The challenges are complicated because they’re

multi-faceted, cross departmental boundaries, and

are usually saddled by fragmented data, explains

Robert Kenney, executive VP of sales and marketing

with OnProcess Technology, a managed services

provider specializing in complex, global SSC

operations—the flow of people, parts and services

following the sale of a product.

THE DIGITAL AGE BRINGS OPPORTUNITY in many forms, but along with that, there’s a growing set of challenges. Cus-tomer expectations are higher than ever, and not only when it comes to product quality and on-time delivery, but also servicing of products after the sale.

Improving after-sales service is essential, but getting your arms around how to achieve that is the hard part. With a high-performing SSC your organization can take out costs in spare parts inventory, spare parts logistics, and recovery of repairable assets—all while improving customer satisfaction.

Making the Case for

Outsourced Services in Post-Sale Supply Chain (SSC)Your Service Supply Chain: Advantage or cost drain?

Source: Forrester Research & CFO Research

In fact 83%of companies believethat they can BOOSTCUSTOMER SATISFACTIONby improving the quality ofpost-sales service

However,

75%said their

companiesCOULD

SUBSTANTIALLYIMPROVE

their currentpost-sales service

72%of businesses sayIMPROVING CUSTOMER EXPERIENCEis their top priority. Senior executives knowthe effectiveness of the SERVICE SUPPLYCHAIN–their SSC–is critical to success

2%




This technology-driven approach is vastly different

than BPO engagements based on contracted

headcount. OnProcess uses a visibility solution that

pulls information from the client company’s existing

enterprise, service, logistics, and inventory systems to

provide a unified view of the service chain, and applies

analytics and best practices to achieve specific results

and to drive continuous improvement.

For example, notes Kenney, analysis of Internet of

Things (IoT) connected equipment can help predict

when products in a customer’s client base are likely

to fail. This can help right-sized spares inventory

levels and positioning so that less capital is tied up in

parts, while the uptime for products in the installed

base is not compromised. “The good news is that

advancements in areas like machine learning are

enhancing our ability to pinpoint and predict machine

failures, which we can use to save costs and improve

reliability and customer service,” says Kenney.

OnProcess also applies analytics to business

processes and events, such as predicting which

customers in a client’s installed base are most likely or

least likely to return equipment. This can make asset

recovery processes more effective with less effort.

It’s just one example how analytics can look beyond

machine failure and examine ways to optimize crucial

handoffs in the service chain.

“Solving service chain challenges isn’t easy,” says

Kenney. “It takes experience and service chain process

expertise, coupled with data analytics and technology

enablement, to achieve the right outcomes.” •

“There are some real silos that exist in after-sales

service, such as the divide that can happen between

systems and people on the tech support side of a

company, and those on the service delivery side of

the house,” says Kenney. “They’re often operating

in different systems, so the data they’re looking at is

different. As a result, bridging that information gap

becomes a challenge.”

Poorly integrated systems and metrics may result

in departments working in an uncoordinated way.

For instance, a customer support operation may be

tracking how quickly it can resolve trouble calls, and as

a result, might be overly inclined to promise an onsite

technician visit, which can be good for the call center

metric, but bad for the field service operation if the

customer issue could have been resolved remotely.

“One department may perceive their metric

is in great shape, but what they’ve done is shift

responsibility to another department,” says Kenney.

“Lack of visibility and operating in different systems

magnifies these silos, leading to what is known as the

‘pain chain’ many companies experience.”

What’s the answer to this pain chain? Ultimately, it

takes better visibility over service events, orders and

processes, and better analytics to drive improvements.

The trouble is, few companies have the necessary

analytics and integrated systems to pull it all off. “The

challenge is that companies have a tremendous

amount of data in different systems, but it is sitting in

silos and not leverageable across all touchpoints in the

overall service process,” says Kenney.

Throwing more people at these challenges isn’t the

answer, especially if those workers lack a common

set of tools for visibility and analytics across the end-

to-end process. Simply outsourcing the challenge

to a business process outsourcer (BPO) will also fall

short without defined goals, as well as integrated

information and insights.

OnProcess Technology, a managed service provider

with proven visibility and analytics tools for service

management, can solve service chain challenges by

marrying subject matter expertise with technology to

achieve targeted improvements.

“Solving service chain challenges isn’t easy. It takes experience and service chain process expertise, coupled with data analytics and technology enablement, to achieve the right outcomes.”—Robert Kenney, executive VP of sales and marketing, OnProcess Technology



“We are a managed service provider business, but

what we provide is powered by visibility tools and

analytics,” says Flinton.

Founded in 1998, OnProcess and its people

are experts in SCC processes. The company’s

engagements are outcome-based, meaning that when

it’s brought in to help a company, it assesses the pain

points and structures its incentives around attainment

of specific goals. It applies analytics to discover areas

for improvement, and leverages its visibility platform

known as OPTvision to optimize SSC processes,

explains Flinton.

Whether a company needs help with services

related to order-to-cash workflows, or with ongoing

service events, OnProcess can apply its mix of

domain expertise, technology and analytics to achieve

targeted outcomes.

“Typically, within a client organization, there are

multiple departments involved in fulfilling aspects of

service. But there are multiple handoffs in this chain,

and handoffs get delayed or otherwise don’t function

well,” says Flinton. “But with our visibility technology,

we can monitor and proactively react to exceptions

across the entire process.”

MOVING FROM disconnected processes for after-sales services to a smooth-

ly working service supply chain (SSC) can yield substantial benefits. With a high performing SSC your company can take out costs in spare parts inventory, spare parts logistics, and recovery of repairable assets, while at the same time improving customer satisfaction.

For either business to business (B2B) or business

to consumer (B2C) companies that service products

in the field or assets related to a service they sell,

an efficient SSC holds enormous profit potential.

In fact, according to Everest Research, after-sales

service can contribute 75% to 80% of an OEM’s

core business profits.

To get your SSC running optimally, the keys include

technology-based visibility into events, analytics-

driven insights, and expertise in fine-tuning critical

functions such as technician dispatching, spare parts

logistics, and asset recovery, says Jim Flinton, VP

of technology and medical division with OnProcess

Technology, a managed service provider specializing

in complex, global SSC operations.

Time for a Technology-Driven Service Supply ChainThe keys to a successful SSC include visibility into events, analytics-driven insights, and expertise in fine-tuning critical functions. Here’s how technology is applied.

In 2016, OnProcess teamed with Massachusetts Institute of Technology’s

(MIT) Center for Transportation & Logistics (CTL) on using Internet of Things (IoT) data to predict machine failures and the impact

on spare parts forecasting. The research found that the more accurately you can predict failures via analysis of IoT data,

the lower average inventory you need.

AFTER-SALESSERVICE

can contribute

75% to

80%of an OEM’s

core businessPROFITS

Source: Everest Research



While many companies run business intelligence

reports on service related issues, OnProcess has

close to 20 years of analyzing service supply chain

processes, and can couple what the analytics

discover with its visibility and alerting tools.

OnProcess’s research and analytics team will

focus the analytics around what the client’s biggest

pain points are, says Flinton. For some companies,

it might be how to increase asset recovery, while for

other companies who sell high-tech products, fraud

prevention is a top concern.

OnProcess’s analytics leverage “propensity scoring”

to pinpoint tendencies that influence issues like asset

recovery or fraud, and immediately send alerts to

services agents to notify them of recommendations.

“We call these InstantInsights, which are proactive

notifications to our agents, so that the appropriate

response can be made,” says Flinton.

In sum, the OnProcess solution is not just

managed services, or a set of technologies, but

rather a blend of people with deep domain expertise,

as well as technology that can be applied in a

proactive way to specific SSC issues, says Flinton.

“Visibility is key, but we also build in the right

trigger points and alarms for specific processes

to proactively identify and prevent jeopardies,” he

says. “Our visibility approach allows us to proactively

support a process today, while our analytics take

processes to a higher level of performance.” •

Here is how some of this technology is applied:• With the OPTvision platform, alerting is used so that

once a threshold is reached the organization can

react. For example, if a service level agreement

(SLA) with a customer requires spares delivery

within 48 hours, and analysis shows that if it hasn’t

shipped from the primary warehouse within 12

hours it likely will not make the SLA cutoff, an alarm

will be triggered so that the order can be expedited

or an alternative parts source or mode of transport

can be found.

• Analytics can look at data from machines to predict

likely failures based on actual use trends, which aids

in spares inventory planning. In 2016, OnProcess

teamed with Massachusetts Institute of Technology’s

(MIT) Center for Transportation & Logistics (CTL) on

using Internet of Things (IoT) data to predict machine

failures and the impact on spare parts forecasting.

The research found that the more accurately you

can predict failures via analysis of IoT data, the

lower average inventory you need. The study points

to the value of basing spares inventory levels and

positioning based on real time trends, rather than

“just-in-case” overstocking based on history.

• Analytics also can be applied to business processes.

For example, OnProcess’s analytics can comb

through spares shipments to customers with

premium SLA agreements to see if parts shipped

under premium transportation get installed right

away, or sit idle waiting for a scheduled maintenance

window, thus leaving time for more economical

transportation options. When this pattern is

discovered, customer support can be alerted to ask

the end user if a more economical delivery option

that meets the repair cycle is suitable. Such analysis

saved one OnProcess client $8 million per year in

premium transportation costs.

• Another business process ripe for analytics-driven

improvement is asset recovery. By data-driven

examination of customers mostly likely to return

parts without prompting versus those who need

more reminders, asset recovery teams can focus

their follow-up efforts to yield maximum results for a

given level of outreach.

“We are a managed service provider business, but what we provide is powered by visibility tools and analytics…With our visibility technology, we can monitor and proactively react to exceptions across the entire process.”—Jim Flinton, VP of technology and medical division, OnProcess Technology



Nutanix has its own systems for enterprise resource

planning (ERP), procurement, inventory, and customer

relationship management (CRM). OnProcess has

integrated its control tower technology with Nutanix’s

enterprise systems, and is now linking its control

tower function with the systems used by Nutanix’s

third-party logistics (3PL) partner.

As a result, as soon as a Nutanix support engineer

determines a service part delivery is needed,

OnProcess can dispatch the parts and coordinate

with the 3PL in an automated way, providing visibility

into successful execution of the delivery.

“We’re embarking on the last leg of the integration

so that now we’ll have full integration not only

between Nutanix and OnProcess, but also our

3PL partner to allow a seamless information flow,”

says Torre. “That integration carries huge value to

us because it improves transaction integrity and

shortens lead time.”

This level of integration allows Nutanix to leverage

partner capabilities without the time delays, manual

interventions, rekeying of data or phone calls

needed to coordinate activities and provide visibility

to end customers.

SINCE ITS FOUNDING IN 2009, Nutanix has built a global reputation and attained rapid growth by offering a hypercon-verged infrastructure platform which simplifies Cloud Computing for en-terprises. Its infrastructure appliances integrate server, storage, virtualization and networking elements to reduce the complexity and improve the efficiency of Cloud Computing environments.

In servicing its rapidly expanding global customer

base, Nutanix also needed to reduce complexity

and give confidence to customers that service parts

logistics will be on track and on time. That’s a key area

for which Nutanix turned to OnProcess Technology,

a managed service provider specializing in complex,

global service supply chain needs.

The relationship with OnProcess allows Nutanix to

focus on technical support and customer service,

letting OnProcess handle functions including

service parts logistics coordination and recovery

of parts from customers. With rapid growth for its

solution, Nutanix stocks service parts at hundreds

of locations worldwide so that it can get them to

customers in data centers quickly, sometimes within

just a few hours, according to Bruce Torre, director

of global logistics, service operations and trade

compliance for Nutanix.

OnProcess has both the technology and expertise

to get these jobs done effectively, says Torre. “They

really understand our challenges, and also, they

have a strong continuous improvement mindset,”

Torre says. “When we meet, if ever there any issues

they’ve identified for improvement, they already

have a remedy, and a timeframe for putting the

remedy in place.”

Nutanix Taps OnProcess for Smooth Service Parts Logistics

“It’s critical that we have this crisp information on service parts logistics, because when we interact with customers we can tell them with a very high degree of accuracy when their part arrived, who signed for it, and the other details a customer might be asking about. This visibility helps strengthen customer confidence in us.”—Bruce Torre, director of global logistics, service operations and trade compliance, Nutanix

Case Study:



“It’s critical that we have this crisp information on service

parts logistics, because when we interact with customers

we can tell them with a very high degree of accuracy when

their part arrived, who signed for it, and the other details a

customer might be asking about,” says Torre. “This visibility

helps strengthen customer confidence in us.”

The integrated approach also smooths the handoff

from Nutanix tech support to OnProcess service parts

dispatching so Nutanix’s people can concentrate on what

they do best rather than worry about logistics, says Torre.

“Our people just need to be able to push a button and

know that it [the service parts dispatching] will work, and

know they will get updates when it is successful,” he says.

Going forward, Nutanix will examine ways to make

use of analytics from OnProcess to improve on areas

that might include asset recovery and service parts

logistics. OnProcess offers analytics technology that can

comb through data to discover patterns, and single out

areas in which to concentrate improvement efforts.

While Nutanix regularly wins accolades for customer

service and support, with its rapid growth, which for fiscal

2016 topped 106% year over year, it needs to constantly

look at ways to improve its service supply chain.

“Our relationship with OnProcess helps us meet the

scale and scope challenges we’ve faced in growing both

geographically, and in terms of customers and volume,

while maintaining our high level of customer service,”

Torre says. “We have good systems internally, and

smart technical support folks, but we also need, strong,

consistently performing backend logistics processes,

which is where we can count on OnProcess for help.” •

“We’re embarking on the last leg of the integration so that now we’ll have full integration not only between Nutanix

and OnProcess, but also our 3PL partner to allow a seamless information flow.

That integration carries huge value to us because it improves transaction integrity

and shortens lead time.”—Bruce Torre, director of global logistics, service operations and

trade compliance, Nutanix

Making the Case for Outsourced Services in Post-sale Supply Chain (SSC)Reap profits and hit operations goals via service supply chain optimization

IMPROVING THE SERVICE SUPPLY CHAIN brings with it a mix of benefits, from strategic to tacti-cal. Operating margins and working capital can be improved while simultaneously enhancing the customer experience. Operationally, man-agers can proactively monitor service events and avoid problems, rather than fighting fires or trying to pull together data from disparate systems. The key is moving from reactive prob-lem solving to proactive failure prevention.

According to Gartner, a recent survey of chief supply chain

officers (CSCOs) found that operations improvements, cost

management and profit improvement ranked as the top three

CSCO priorities. Let’s face it, every business is after reduced

costs and improved profits, but it’s important to remember

that attainment of these high-level goals typically stems from

operational improvements.

The strategic and operational benefits possible the service supply chain are outlined below.For senior executives including CFOs and CEOs: Improving aftersales service can unlock efficiencies and

improve customer satisfaction. According to a 2016 study

by CFO Research, 71% of senior financial executives

surveyed believe changes in post-sales services can

eliminate redundant work, while 82% agreed such changes

can improve customer satisfaction.

Potential areas for cost savings include lower spare parts

inventory levels, improved asset recovery rates, and lower

transportation costs for replacement parts. Better uptime for

products in the field and a stronger customer experience also leads

to improved customer satisfaction, which drives loyalty and sales.

Case Study: Continued



For logistics VPs and service parts managers: Visibility over

service events with exception alerting ensures that if parts or

service calls are at risk of failing to meet a promise data or

service level agreement (SLA), the organization can react to

resolve the issue without last-minute expediting.

Analytics can also be used to determine if customers who

have the right to premium spare parts delivery are making use

of the parts immediately, or holding them for later installation.

Knowing this pattern offers the service organization a chance to

slash spending on premium shipping while still meeting SLAs.

Additionally, monitoring and analytics of unidentified returns

parts will aid your organization from building up a costly level of

“trouble shelf” parts in warehouses.

Thinking about specific improvements needed in the service

supply chain is a good exercise for any business with after sales

service. You should not just throw more people or new systems

at service management challenges; you need to have specific

outcomes in mind, explains Jim Flinton, VP of technology and

medical division for OnProcess Technology.

“The areas our clients want to focus on are those areas that

directly impact a financial or customer satisfaction measure,” says

Flinton. “We are a technology-driven managed service provider,

and we’re focused on achieving specific goals. For instance, if by

delivering our service, we can show a reduction in working capital

for maintenance stock inventory, that’s a win any CFO would be

happy to see.” •

Outcome-based managed service providers who can

leverage technology for visibility and analytics over service chain

processes are a proven path for achieving underlying operational

improvements without having to deploy costly new enterprise

solutions or bring in internal domain expertise.

For customer support managers: Visibility over service

order events ensures customer issues get resolved on time,

while avoiding expediting and time wasted combing through

back end systems for event status, logistics updates, or other

information needed to service the customer. With analytics

into customer calls and requests, the “triaging” of customer

interactions is more effective, with timely resolution of issues

without overburdening the field service group with unneeded

technician dispatch events.

For field service/technical support managers: Analytics can help reduce unnecessary field service calls

by resolving more issues remotely, while also matching the

customer issue to the parts and technician skills needed to

efficiently fix the issue on the first visit. Meanwhile, analysis of

machine data can lead to predictive maintenance schedules

that may result in fewer truck rolls, and overtime, reduce the

likelihood of bigger repair orders.

Analytics can also help ensure that warehouses and service

vehicles have the right parts on hand to resolve issues without

overstocking. Overall, technology helps deliver better, more

efficient service. In fact, according to research by McKinsey Global

Institute, up to 15% of after-sales costs have been reduced through

the use of analytics that includes product sensor data analysis.

Up

15%of AFTER-SALES

COSTS

have beenREDUCED

through theuse of

ANALYTICSthat includes

product sensordata analysis

Source: McKinsey Global Institute

p to

5%

Source: CFO Research

82% agreedsuch changes canIMPROVE CUSTOMERSATISFACTION

of senior �nancialexecutives surveyedbelieve changes in post-salesservices can ELIMINATEREDUNDANT WORK

71%1%



supply chain for 19 years, and many of our clients have

been with us for 10-plus years. We couple that experience

and process expertise with technology enablement—with

the visibility and data analytics tools needed to achieve the

targeted outcomes our clients are after.”

Like most enterprise challenges, improving pains in the

service supply chain requires a mix of people, processes

and technology, but with OnProcess, companies can

count on help in all three of these areas. OnProcess

helps a company assess which service processes need

improvement, and start applying its technology and

best practices to attain those goals, says Jim Flinton,

OnProcess’s VP of technology and medical division.

“Our engagements are structured around attaining specific

outcomes—we are not a business process outsourcer,”

adds Flinton. “Our approach is to focus on areas that affect

your balance sheet, income statement, and customer

satisfaction levels in ways that are measurable and clear.

That creates aligned interest, putting us in a partnership

position around your service supply chain objectives.” •

WHEN WE HEAR ABOUT COMPANIES that have made big improvements in after-sales services—cutting spares inventory by 20%, or doubling their asset recovery rate on repairable products—it begs the question: How can my organization gain similar benefits?

The answer is complex, but basically, companies

need better visibility over end-to-end service supply chain

events, and the technology and domain expertise to

analyze trends and make adjustments.

That remedy is a tall order for companies who have

disconnected back-end systems for customer support,

technician dispatching, spare inventory management, and

logistics management. You can deploy an overarching

system for service management, but that takes time and

requires a major technology investment, and still leaves

your company without the domain expertise to know

which issues to focus on, and how to best run event

management and analytical tools.

There is a better alternative: bring in a managed

services provider with technology tools, analytics,

domain expertise, and a track record for making targeted

improvements in after sales services. OnProcess

Technology is such a provider. In its close to 20-year

history, it has helped Blue Chip companies such as

Charter, Cisco, Dell/EMC, HP, Philips Lifeline, and GE

Healthcare, manage after sales services.

OnProcess also has helped young technology

companies such as Nutanix quickly ramp up a service

supply chain, helping Nutanix keep up with exponential

growth, while improving its asset recovery processes.

“We have tenure and track record in focusing on

aftersales sales service supply chain issues,” explains

Robert Kenney, executive VP of sales and marketing for

OnProcess. “We’ve been 100% focused on the service

Move from “Pain Chain” to Service Supply Chain

Savvy supply chain managers bring in a managed services provider with technology tools, analytics, domain expertise, and a track record for making targeted improvements in after sales services.

“We’ve been 100% focused on the service supply chain for 19 years, and many of our clients have been with us for 10-plus years. We couple that experience and process expertise with technology enablement—with the visibility and data analytics tools needed to achieve the targeted outcomes our clients are after.”—Robert Kenney, executive VP of sales and marketing, OnProcess Technology

(SSC)

Visit www.onprocess.com

U.S. (508) [email protected]

The Netherlands +31 (0) [email protected]

MAKING THE CASE FOR Outsourced Services in Post-Sale ...€¦ · MAKING THE CASE FOR . Outsourced...

Documents

Transcript of MAKING THE CASE FOR Outsourced Services in Post-Sale ...€¦ · MAKING THE CASE FOR . Outsourced...