Field service automation not backed by CEOs

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By: Wise Marketer Staff |

Posted on December 14, 2002

Despite field service's largely accepted role in product differentiation, and potential as a profit centre, many CEOs leave a wide gap between their investments and their perceived value of field service automation, according to a study by Astea International.

The firm's survey of over 3,500 field service professionals and their senior managers discovered a serious difference in the importance placed on field service by CEOs, and the commitment their companies are showing in order to realise the potential returns of field service through automation.

Out of almost 1,900 respondents who claimed direct decision-making power when it comes to field service, 56% of CEOs view field service as playing a vital role in their sales and marketing mission - either as a profit centre or as a product differentiator - while only 42% of them expect to expand their field service budgets in 2003.

Of those companies expecting to invest in upgrading and automating field service over the coming year, 40% expect to spend less than US$250,000 - an amount which Astea claims is unlikely to allow for any real gains in field service automation.

Big business
Astea's study also quotes a recent report from AMR Research, which showed that service businesses (such as divisions of manufacturing companies that provide parts, maintenance, or other services to customers after original product sales) tend to account for 40% - 50% of a manufacturing company's profit, and up to 25% of annual revenue.

"Clearly, C-level professionals realise the importance of field service but, somewhere between this perceived value and the organisation's investment commitment, there is a breakdown," explained Zack Bergreen, CEO of Astea International.

According to Bergreen, some 32% of CEOs rank field service as a potential point of additional sales, and yet their investment in those initiatives generally falls far behind.

Employee attitudes
The difference between perception and investment also makes itself apparent in employee attitudes toward field service. For example, while 24% of CEOs say that field service represents a vital product differentiator for their company, only 8% of field service professionals believe that management takes such a progressive approach when supporting and allocating resources for field service.

"In tightening markets, service often stands as a last defence in maintaining prices and profitability," notes Bergreen.

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