Resources Are Revenue - Field Services USA 2014 Presentation

Resources Are RevenueHow Research, Analysts, and Experts Have Reached Consensus on Technology Requirements for Field Services

Steve BeaumontServices Solution Market ManagerPlanview

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Optimizing service resources is the key to driving both

revenue and profitability, by reducing costs, and improving service value,

and delivery quality

Resources are RevenueConsensus Amongst Experts


Challenges and Pressures 4 drivers of analyst and committee consensus in field services today

Changes in 2014 to proactively ensure success in 2015

The Consensus of Resource Optimization Make more money with the same number or less people

Correctly pricing/estimating projects will always be the goal

Get the white paper, Resources Are Revenue Read more on expert consensus on resource optimization

Get their recommendations via highlighted best-practices on where and how to start

Agenda

Challenges and PressuresResources Are Revenue


Driver 1Tumultuous Times Are Ahead

0% 10% 20% 30% 40% 50% 60%

34% ‐ Saw lower service margins

40% ‐ Are facing reduced customerspending

46% ‐ Are seeing increasingcompetition in services

49% ‐ Did not meet serviceprofitability targets

Top Market Concerns Year‐Over‐Year Change in PS Revenue

Aberdeen GroupThe State of Field Services, 2013

Service Performance InsightPS Maturity Benchmark, 2014


“Competing on price alone is no longer viable for service organisations. In the developed world, the cost of manufacturing, increased competition and ease of production in low-cost economies (like Brazil, Russia, India and China) has forced companies to realize that they need a differentiator other than price to compete in the space.”

Service organizations “can no longer compete on price alone”.Business transformations representing new revenue streams impacting technicians, consultants, engineers, and other professionals: Combining products and services into new

recurring revenue services packages

Embracing Cloud technologies because of client demand

Winning work because of end-to-end services solutions

Focusing on client needs, greater customer satisfaction, and increased business value

Driver 2Service Organizations Can No Longer Compete on Price Alone

Technology Services Industry AssociationThe State of Services, 2013

Field Services Europe2014 European Services & Trends Report


Driver 3Technology: The Biggest Risk and Opportunity

The push for deployment of new technology is a major concern for companies in the industry. Similarly, the desire to enable technicians as revenue generators is a global concern for service organizations. – Field Services Europe, 2013

41%Technology

Appleseed GroupResource Management &

Capacity Planning Benchmark, 2013Field Services Europe

2014 European Services & Trends Report

What is the biggest risk of not addressing your key pain points


54% of leading organizations are looking to get a better grip on future service demand and thereby allocate the necessary resources to meet this demand in an efficient and expedited manner

Too many services organizations are held back by a “spaghetti” of legacy systems; spreadsheets; point solutions, project managers, etc.

Driver 4Legacy Systems Have Overstayed Their Welcome

Where is the latest resource

planning sheet?

Aberdeen GroupThe State of Field Services, 2013

The Consensus of Resource Optimization

Resources Are Revenue


Make more money with the same number or less people Minimizing personnel “on the bench” is inherently cost effective

Employee attrition is predicted to only get worse (20% by 2018)

“Germinating” associates is becoming a competitive advantage

Keeping your team happy is the key to client delight

Correctly pricing/estimating projects will always be the goal Servitization is not just a buzz word

Client expectations create new revenue structures

Technology trends create new service offerings, pricing is often estimated and revised with each hit or miss

Why Analysts Focus on Resource Optimization


Effective Utilization:Improve Margins With Current or Less Staff

78% Best in Class

70% Industry Average

56% Laggards

Best-in-Class organizations achieve significantly better

utilization

Service Performance Insight, 2013

Aberdeen GroupField Services Market Report, 2013


Best practice 1:Two-quarters of visibility (even if estimated in scenario-builders) is the new standard to ensure proper project staffing, forecasting, and technician/staff work/life balance

Best practice 2:HR must be closely involved to assure the proper resources are on board

Best practice 3:Use subcontractors only for peaks and valleys and for specialized skills

Optimized Utilization:To Reduce Attrition and Employee Satisfaction

0%

5%

10%

15%

20%

25%

30%

35%

Percen

tage of o

bservatio

ns

Workforce Utilization



Increased Utilization:For Improved Financial Performance

# of resources 1% 3% 5% 10%

25 $108,750 $326,250 $543,750 $1,087,500

50 $217,500 $652,500 $1,087,500 $2,175,000

100 $435,000 $1,305,000 $2,175,000 $4,350,000

200 $870,000 $2,610,000 $4,350,000 $8,700,000

500 $2,175,000 $6,525,000 $10,875,000 $21,750,000

1000 $4,350,000 $13,050,000 $21,750,000 $43,500,000

Annual Increase in Marginal Revenue Via Improvements in Revenue Impacting Utilization

AssumptionsBillable Hourly Rate/Cost: $200Annual Billable/Cost Hours: 2175


Businesses can no longer just compete on price

Services can no longer just be about implementation, support and maintenance

Client expectation You understand your Customer’s needs;

It’s your goal to achieve greater Customer satisfaction;

You promise, and therefore, deliver more value

End-to-end solutions are the new norm

Service Transformations and the Bottom Line


Combining products and services into new recurring revenue streams The Cloud is establishing client expectations for proximity and control

Focuses on customer business outcomes

Operational efficiency is necessary for any degree of organizational transformation

What-if scenariosreduce guesswork

Resource Optimization for Servitization:Better Estimates and New Revenue Models

Technology Services Industry AssociationB4B Operating Model Construct, 2013


Resource Optimize for Repeatable Processes:Improve Delivery and Create Agility

KPI >80% <80% ▲

Annual revenue per employee (k) $173 $143 21%

Average project overrun 7.4% 9.3% 20%

Year-over-year change in PS revenue 10.5% 9.2% 15%

Projects canceled 1.8% 2.1% 14%

Employee annual attrition 7.6% 8.8% 14%

Project Margin 37.5% 33.3% 13%

EBITDA % 11.4% 10.9% 4%


Percentage of the time a standardized delivery is used


Resource Optimization Technology Trends:Built for Service Visibility and Agility

• Sales forecast• Sales opportunities• Sales pipeline• Service pricing• Potential skills required

• Project & Activity plans• Resource requirements• Resource availability• Schedules• Time and expenses• Project cost• Project margin

• Services cost• Services revenue• Billing information• Days sales outstanding• Regulatory & shareholder reporting

Sell & Bid Deliver Bill & Collect

Integration

Interoperability


The Right Systems Do All of the Above

Resources Are RevenueHow Research, Analysts, and Experts Have Reached Consensus on Technology Requirements for Field Services

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Resources Are Revenue - Field Services USA 2014 Presentation

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Transcript of Resources Are Revenue - Field Services USA 2014 Presentation