Is Your Service Organization Prepared For The New Year? Depending on your organization's fiscal year end and your current planning processes, you are probably into your new fiscal 2012, or closing 2011 and planning for the New Year. Whichever the case, how did your service organization perform (financially and operationally) in 2011? Was your service department as profitable as you had planned? Was your service team effective in supporting any new 2011 initiatives i.e. production print, MPS? Despite your service operation's 2011 performance, at this point in the year, one must identify and quantify opportunities in which your service department will improve its performance in the New Year No matter the depth of financial information provided to your service leader, there are still areas to consider when planning for the upcoming year. Also, beware that every service operation is unique and may have different initiatives and challenges; unfortunately there isn't a silver bullet, or magic wand, that will improve your service department. However, there are fundamental areas to consider when planning for the New Year. Consider the following areas when preparing for the upcoming year. 1. Monitor and identify opportunities within your base. Are you able to identify new upgrades (churn), new placements, cancellations, competitive take-overs and solution sales impacting your base? Every organization's base is unique, but can you identify changes within your base and other areas impacting your base? There is more to monitoring your base than simply identifying changes to your total MIF and calculating your base's total image volume. Base churn can have a tremendous impact on various areas of your operation affecting labor expense and parts expense. Although upgrades are part of doing business, they could adversely affect your total service revenue. For example, when a large percentage of your service base is upgraded with new equipment at a lower cost per image, your service revenue will decline. In addition new placements will provide incremental revenue, but will increase your total parts expense if you are not aware. Both circumstances (churn and new business) will impact your department's workload demand affecting your staffing levels. Do you have a plan to address other areas of opportunity i.e. poor performing equipment, contracts below expected profitability thresholds, obsolete contracted equipment? It is extremely effective for both service and sales to work together on these opportunities. 2. Assess appropriate staffing levels. Often service organizations are not aware of what their staffing levels should be, which can contribute to excessive staffing levels. I have seen various techniques used when determining staffing levels i.e. call load volume, images per technician, and machines per technician. However, few methods benchmark your technical staff's productive time, your base's actual active work load demand and the desired response time when determining the appropriate staffing levels. Assuming you have appropriately determined your staffing levels according to your base's benchmark workload demand, determining upcoming staffing levels is not over yet. Consider the impact of situations affecting your base as I described earlier and don't forget about consulting your sales team to understand future opportunities within the upcoming year that will affect your staffing levels. It's important for service to understand the significant sales opportunities that could close throughout the year in order to ramp up recruiting efforts. It could be a detriment to your entire organization if your sales team closed a major account which would tremendously affect the service department's work load and there wasn't anyone on deck to fill the needed position(s). Conversely, if you are aware that you will be losing a major account within the upcoming year, it is important to plan the de-selection process should the account loss come to fruition. 3. Create parts spend targets by technician. As a service leader could you answer, "How many parts should your technicians use to support the equipment in their territory?" If not, you are not alone. Often service leaders are managing their parts expense as a percentage of revenue without knowing their team's individual parts spend targets. They just assume they have to get to the "industry model," but fail to determine a spend target for each team member. Have you ever tried shooting a target without bullets in your gun, then wonder why you never hit the bulls-eye? When the field staff has a clear understanding of their individual spending target and how they are accountable to manage these targets, the organization will see dramatic decreases in parts expense. 4. Construct and implement individual development plans (IDP's). Although it is important to remain focused on the key expenses driving the department's profitability, one must not lose sight that service is a team sport and each individual needs to understand his/her contribution to the team. Technician efficiency, interpersonal communication skills and technical proficiency provide the foundation for an effective technician; therefore, it is important to identify each technician's strengths and weaknesses in these areas in order to help coach them for further improvement. Assuming you are tracking and managing each technician's First Call Effectiveness (FCE) and have identified technical deficiencies the previous year, it is time to develop a training schedule for your technical staff to help them become more proficient on the products they support. 5. Evaluate and adjust service territories as needed. Service territory management is one of the most critical aspects of running an effective and efficient service operation. Dedicated territories, territory integrity, ensured workload balance and product specialization are best practices in territory design. Assuming you did your diligence in designing your service territories, were there instances in the previous year when the service team experienced excessive call loads, or excessive response times? Did these instances occur for a particular technician or major account during the previous year? If so, did you identify the reason(s)? Do you feel comfortable these situations will not be repeated in 2012? 6. Identify and implement a strategy to develop and satisfy your top influential accounts. It is easy for service leaders to get engrossed in managing all the various service metrics, but one must never lose sight of the ones who provide the foundation for your organization's existence - your customers. Your top influential accounts could be those who provide a significant amount of revenue and profit to your organization. They could be key influencers to allow your company to gain more market share. They could be top prospects for the upcoming year, or maybe an important account your company intends on upgrading at some point in the New Year. Whatever the case may be, it is important to identify these accounts in order to develop a strategy that will keep them close to your organization. This way, come decision time, these accounts will fully appreciate the value of your organization, making it more likely for you to close more of their business. The upcoming year will present tremendous opportunities for your organization. Just make sure your company is positioned to take advantage of every opportunity the New Year brings. If you have not identified and implemented many of these planning strategies, it is not too late to begin. Staubitz is a service consultant with Strategy Development, and has over 14 years experience in all levels of service operations and MPS service structure. Ken spent the majority of his career at Modern Office Methods in various service and operational roles, most recently, was MOM’s Director of Client Services where he oversaw all service operations and managed a staff of over 60 field service personnel in multiple branches. Ken led the organization to exceeding industry benchmark of 52% service gross profit, and was key in creating and implementing the service structure to handle its explosive MPS growth. Ken served on the Lanier Dealer Advisory Council and was an E-Automate Service Committee member. u