In this episode of the Five Questions for a Field Service Expert Podcast, we chat with Ralph Rio, Vice President at ARC Advisory Group. Ralph’s domain areas involve Asset Lifecycle Management with a focus on Enterprise Asset Management, Field Service Management, Mobility, and Industrial Internet of Things (IIoT). He also covers 3D Scanning and Continuous Improvement Programs. The episode runs about 15 minutes.
Mobile Reach: [00:00:09] Welcome to the Five Questions for a Field Service Expert Podcast. This is the show for field service professionals where we dig into the big questions about field service delivery and management. Every episode, we ask a field service expert five questions that can help you do your job better. Today, we’re talking to Ralph Rio. Ralph is the vice president for enterprise software at ARC Advisory Group. At ARC, Ralph focuses on enterprise asset management, field service management, and industrial IoT, having researched and written on those topics extensively. He is an advocate of continuous improvement such as Lean Manufacturing, Six Sigma, etc. Ralph has written more than 100 research papers on these topics including asset performance management as well. He is a Six Sigma Black Belt and has been involved with Six Sigma since its beginnings at Motorola and in its rollout at GE. Ralph’s research and work experience has provided deep perspective for the management of continuous improvement programs, especially those in field service settings. Before his time with ARC, Ralph served in marketing and product management leadership roles at GE, as I mentioned, and Emerson, Motorola and Texas Instruments. Ralph, welcome. We’re really happy to be able to spend a few minutes with you today. Thanks for sharing your time with us.
Ralph Rio: [00:01:30] Thank you. Looking forward to it.
Mobile Reach: [00:01:33] Very good. Very good. We have five questions for you Ralph as we do for all of our field service experts. Are you ready to jump into those?
Ralph Rio: [00:01:41] Yes, thank you.
Mobile Reach: [00:01:42] My first question Ralph is about digital transformation. This is a phrase that gets bandied about quite a bit and there are about as many ways to define the concept as there are people who utter it. How do you think of digital transformation as it relates to a field service organization?
Ralph Rio: [00:02:01] Yeah, digital information transformation has a maturity curve attached to it where there are lower levels of digital transformation and higher levels. The lower levels start to look like business process re-engineering where you look at a workflow and apply new technologies to improve the workflow. And higher levels of maturity is where you start to offer new products or new services. So if we talk about the lower maturity levels where you examine the workflow, we can think about the new technologies that have come about around networking and cloud resources. You know these were all really generated proven obtained economies of scale these technologies with consumer products like our mobile phones. Now when these technologies get applied to field service you have a road optimization by the dispatcher so they get to look at maps and figure out where to send which texts and then at the same time that map gets displayed to the individual tech for a particular work order and they get to see the route that they should take. So applying this technology vastly improves the workflow and the work processes for the field service technician. So you’re talking about an evolving landscape for the task and his or her day to day.
Mobile Reach: [00:03:42] And that sort of dovetails into the topic of industrial IoT and sensor technology which is something you’ve covered extensively. The field service market is obviously moving inexorably toward that model. What implications do IoT and sensor technology have for the field technicians’ daily work.
Ralph Rio: [00:04:05] Yes, the most predominant application of IoT and the industrial sectors is for predictive maintenance. So this is where there is some kind of mathematical model of an asset to assess whether or not it’s running well or running poorly.
Ralph Rio: [00:04:27] And when things start going bad and that can be used to predict when an asset will fail. Those typically run in the cloud. You pull data from a piece of an individual piece of equipment.
Ralph Rio: [00:04:41] I like to call this a small data solution where you’re looking at five to 10 data points from a particular machine. That certainly isn’t big data. And using that to model it’s behavior. This has the potential of completely transforming the field service role.
Ralph Rio: [00:05:02] So if you know right now the role predominantly is reactive maintenance. If something fails or a service call gets called in when equipment fails it can’t prove product anymore it impacts revenue. That seems to get a lot of management attention pretty quick. There’s a lot of heat in the system and it’s a reactive situation. It
Ralph Rio: [00:05:28] I’m sure there are some field service techs out there who’ve been in some tense situations repairing equipment that impacted revenue. We have a chance to completely change that workflow and business model. If you have predictive maintenance you can predict perhaps two or three weeks out that a particular piece of equipment is going to fail.
Ralph Rio: [00:05:53] Now you can schedule a call, let’s say in a week, to make sure that you do the repair before it actually fails. Number one, this has a huge benefit in terms of customer service satisfaction. Customers aren’t mad at you because the equipment failed. You have a much higher chance, if you’re an OEM, of repeat orders for example. Also, you can completely rethink your spare parts management. Now you have time to FedEx parts. You don’t have to have every part imaginable in the tech’struck or at the nearby depot. You can you can complete rethink your spare parts management approach.
Ralph Rio: [00:06:38] So this predictive maintenance capability really has a chance at completely transform form how we approach field service.
Mobile Reach: [00:06:51] So you mentioned there in your in your thoughts about IoT the notion of equipment condition monitoring and being more proactive in that regard.
Mobile Reach: [00:07:04] In industrial settings in particular, how are you seeing equipment in condition monitoring feeding into other areas of the business. The non-service areas, in particular, like R&D, or sales or product engineering.
Ralph Rio: [00:07:19] Excellent. So, what I talked about before, providing predictive maintenance, typically is a new service a new product, so it’s an opportunity to grow revenue in terms of increased services. Let’s get back to the core product that they’re selling whether it be a pump or an HVAC piece of equipment in commercial buildings or whatever. When you’re doing condition monitoring, you’re getting actual field data. See previously or what most people do now is they get a few pieces of equipment, put it on a test stand and basically beat it to to force it to fail.
Ralph Rio: [00:08:09] And that’s the data they use to improve their design of their product.
Ralph Rio: [00:08:14] So it’s a few pieces of equipment in a controlled environment, not representing real field data. So by getting field data and applying analytics the R&D people can develop better products and gain a competitive advantage. So this is a way to improve the capability equipment. So you grow the equipment side to your revenue stream.
Ralph Rio: [00:08:45] So there is predictive maintenance for services and then there is selling more equipment and growing the business in that fashion.
Mobile Reach: [00:08:56] That makes a ton of sense and I appreciate you unpacking that for us. Let’s take a step to the right and talk for a minute about some more traditional technologies inside of a field service organization. So, mobile apps are clearly table stakes. One of those components of a technology stack that just sort of required in this day and age.
Mobile Reach: [00:09:21] What do you consider to be as a mature technology what do you consider to be some of the more advanced use cases for mobility in particular? And how are you seeing field service organizations solve for those use cases?
Ralph Rio: [00:09:34] Yes so we talked about the the transformation of the workflow, where the dispatcher and the technician where the route optimization and giving a technician a map. We also have the capability of giving the technician the documentation they may need to do the repair. If the technician comes across a problem that they didn’t anticipate or maybe are a little bit uncomfortable with, they’re not familiar with it, they have the opportunity through things like Facetime to bring in an outside expert. They can show the outside expert with you know video or a picture of what they’re seeing and the outside expert can give them direction. So there’s this ability to bring in outside experts that are a clear future added business value with mobility.
Ralph Rio: [00:10:35] But I want to talk about a whole other area that is ripe for digital transformation. And that is the area of inspections. So a lot of field service people talk about repair of equipment. There is sending of technicians out to do inspections in a similar way using field service management applications. And typically the way inspections are done now is the technician is given a printed piece of paper, a form. They go to the piece of equipment and they write down data about the piece of equipment. It could be readings off of meters or it could be some text about the ring leaks or things that they see that are unusual about it. Well this is a piece of paper typically just filed away someplace. And the data and is not really used unless something very obvious is wrong and then it turns into a repair ticket.
[00:11:39] We have a chance to completely transform that with a mobile device, where instead of the form being a piece of paper the form is a screen with dialog boxes on the mobile device with data in these the dialog boxes that because it’s computer now you can do some some data checking it’s at the right format is the value completely at a range so indicating a data entry problem and things like that.
Ralph Rio: [00:12:10] You can even Bluetooth meters into the device so the data is automatically collected.
Ralph Rio: [00:12:18] So now that the data is available electronically it can go into analytics applications to do things like predictive maintenance where you look at trends over time and maybe some value was going gradually out of range and or going towards a limit. And you can take action before it actually passes the limit.
Ralph Rio: [00:12:42] So this I see another area of business transformation is around that inspection process.
Mobile Reach: [00:12:54] Excellent. The really really rich insight there, appreciate that Ralph. So, let’s finish our series of questions here with a question about the C Suite. So field operations executives typically need to engage a CFO as sort of a purchasing partner if you will, sometimes even the CEO of the business depending on how the organization is structured. When building that business case for digital transformation. What are some of the most critical considerations you recommend that that field service executive think about?
Ralph Rio: [00:13:26] Yeah, it’s a good thing to talk about because there are several potential situations and each one’s a little bit a little bit different. I want to start off with a general statement though is that the C suites metrics are very public and very obvious. We often overlook this because in communications with our presidents or CEO of our organization, usually, they are not so much around their metrics. Their metrics are in the PNL statement and the balance sheet, which gets issued quarterly and get a lot of scrutiny in the analyst community. So if you can tie your justification into that you will get their attention and it will be sustainable. So I want to talk about just quickly two types of situations.
Ralph Rio: [00:14:26] One would be an OEM and this is where an OEM has a field service organization that’s that’s basically focused on warranty repair. And it is viewed as a cost center where it uses the people and spare parts and usually the C suite looks at a cost center as a something to be in. I mean this is cost optimized which means reduce the cost so you improve margin. If the field service core organization can transform to one where they’re offering service contracts and then becomes a revenue oriented area a PNL center that and start adding revenue to the top line, that completely transforms how the C suite will look upon the field service organization.
Ralph Rio: [00:15:37] And they are much more likely to approve resources. New field service management organization additional people and resources to make that higher revenue and more profitable part of the business. You completely change their view of you from a cost center to a revenue opportunity and you’ll get the resources you need to be successful.
Ralph Rio: [00:16:06] The other situation I’d talk about is where the business owns the assets so this would be like power transmission and distribution.
[00:16:26] I’m sure there were other examples where the business owns the asset and you get into the area of unplanned downtime which directly impacts revenue. If the equipment isn’t running can’t make the product. If you can do your justification for a field service management application or other resources in the context of how it affects revenue or asset longevity. That gets to their metrics and will get their attention. Unfortunately, most people tend to when they do the justification, focus on costs like no technicians or amount of spare parts and that is not impactful enough to get their attention. It is much better to go to the revenue side of it even if the case is not solid. If it’s a little loose, they will understand and you will get there much more likely to get their approval.
Mobile Reach: [00:17:30] Excellent insight and that underscores the importance of top line certainly relative to margins or cost containment. Appreciate that Ralph. This has been a truly insightful dialogue for me I greatly appreciate your time. Thanks for offering your insights.
Ralph Rio: [00:17:48] Thank you.
[00:17:50] You can learn more about Ralph and his technology advisory work here.