Maintenance and service is the earner to go after as margins rapidly get lower at the point of sale
Field service will become a primary revenue driver by 2018, according to research which questioned 200 IT and field service decision makers at companies in the US, UK, France and Germany.
The research found that 86 percent of companies believed their field services will become a main revenue driver for their organisations in an average of 24 months.
The problem is that those profit margins are getting thinner and thinner. In a globally competitive market, many products are now commoditised, and with such tightly squeezed margins it’s diminishing the leverage from this sort of production-centric approach.
“Senior management are realising that service is the hidden gem within their organisations, which is something we’re already seeing in our own global customer base,” said Spencer Earp, vice president EMEA for ServiceMax, the cloud-based field service management provider.
As companies begin to properly monetise their service departments, said Earp, they have the opportunity to increase service revenues even further by supporting existing third party or competitive products.
This creates an ongoing relationship with the customer that effectively locks out competitors, and provides an effective hedge in a downturn economy.
The research found that 73 percent of businesses say field service management is having a “positive impact” on their organisations’ profitability, and 47 percent say field service management “reduces costs”.