Maximizing Reimbursement in Today’s Fee for Service World: A Conversation
Maximizing service profitability at optimized cost to serve: Next generation service process...
-
Upload
genpact-ltd -
Category
Business
-
view
210 -
download
0
description
Transcript of Maximizing service profitability at optimized cost to serve: Next generation service process...
© 2014 Copyright Genpact. All Rights Reserved.© 2014 Copyright Genpact. All Rights Reserved.
Maximizing service profitability at optimized cost to serve: Next generation service process execution
© 2014 Copyright Genpact. All Rights Reserved.
A Global Business Process Services Leader: Process Transformation and Outsourcing, Analytics, Technology
We help leaders of some of the largest enterprises transform and run their processes and operations, including the very complex and industry-specific
What we do
Unbiased, agile combination of process science, related technology and analytics limits upfront costs and enhances future adaptability
Right critical mass:
• we are large (64,000+ global staff) but our solutions appropriately flexible
• our top management is directly involved in our client partnerships
How we do it
Our impact
We help enterprises to be more competitive by becoming more intelligent: adaptive, innovative, globally effective and connected…
…by enabling tighter management of costs, risks, regulations, and supporting growth
The results: US$22B* of impact for 800+ global clients
© 2014 Copyright Genpact. All Rights Reserved.
“A business absolutely devoted to service will have only one worry about profits. They will be
embarrassingly large.”
3
Henry Ford
“An excellent product no longer guarantees business success. Finding new sources of income and growth has become a matter of competitive
necessity for traditionally product-oriented companies”
© 2014 Copyright Genpact. All Rights Reserved.4
Organizations with higher “services” than “product” revenue growth see their stocks rising!!!
Source: Report by Mckinsey - 2011
© 2014 Copyright Genpact. All Rights Reserved.
Are companies heeding the advice and FOCUSING well?
5
The real struggle lies in “FOCUS”
© 2014 Copyright Genpact. All Rights Reserved.
The Aftermarket Services (AMS) value chain
6
• Contract monitoring
• Contract renewals
• Contact center
• Product support /helpdesk
• Service parts planning and pricing
• Parts fulfillment support
• Field service support
• Remote monitoring
• Warranty claims processing
• Warranty supplier recovery
• Operations dashboard and service / cost analytics
• Installed base management, including IB analytics
• Product returns support
Pro
cess
In
terv
enti
on
sV
alu
e D
rive
n • IB service
coverage %
• Cost per sale /
renewal• Contract
profitability
• Response time• First call
resolution
• On-time
delivery• Back orders
• Claim to
recovery TAT
• Analysis
accuracy
Service Growth Focus Service Execution FocusTransaction Processing
and Reporting
Setup and Planning
Service Request
Management
Warranty Management
Service Fulfilment
Parts Management
Service Invoicing and
Reporting
Contract Management
Product Returns and Refurbishing
Gen
pac
t A
MS
O
ffer
ing
s
• Remote
resolution %• FE utilization
• Cost of
reverse
logistics • Repair TAT
© 2014 Copyright Genpact. All Rights Reserved.
A close look at the AMS space
If 100 units go the ‘Forward’ route
FORWARD via dealer or direct to home
REVERSE: Reuse, repair, recall, recycle
At least two units take the ‘Return’ route
7
© 2014 Copyright Genpact. All Rights Reserved.
AMS is an integral part of the reverse supply chain
Customer Support Operations
Call center, email support, or chat support.Often it is a combination of all of these.
Logistics Operations
Receive goods from customers, move back to origin for resale/replacement or to eWaste facilities
Storage & Warehousing Operations
Returned goods and parts are tagged, tracked, and stored until decisions are taken for repair, reuse, resale, and scrap
Repair/Refurbish/Resale Operations
Inspect returned goods, repair, refurbish, revive and re-sell
AMS
Control
Control
ManageManage
8
© 2014 Copyright Genpact. All Rights Reserved.
What customers expectThey do not expect “too much.” They just expect “service delivery”
Availability
Service
Reliability Predictability
Customer Delight
Customer Ecstasy (High Maturity Level)
Customer Service (Base Maturity Level)
5%
95% of your customers
will be happy just with this
basic compliance
High Maturity State
9
© 2014 Copyright Genpact. All Rights Reserved.© 2014 Copyright Genpact. All Rights Reserved.
No Automated Escalations
No Checks & Controls for
measuring Partner Performance
Lack of Service CultureCost Concerns
preceding service
priorities
Lack of Systemic
Interventions
High Dependency on ASC/ISCs
No control over
product and service
life cycle
Manual and
outdated processes
No objective review
mechanism
Despite best efforts, the result mostly is…
Customer and cost issues10
© 2014 Copyright Genpact. All Rights Reserved.
Challenges to achieving $$ impact
11
Lack of visibility into the installed base data
Low accuracy of the existing installed base (IB)
Growing market need to drive higher contract coverage
Lack of clarity in the “service products” (contracts)
…driving service revenue …optimizing service cost
Lack of visibility into Cost to Serve
Broken link between customer contact and service issue resolution
Lack of standardized processes
Significant parts availability/inventory issues and field service responsiveness issues
Unclear job allocation and handoffs
Lack of visibility into KPI/metrics to measure process efficiency and effectiveness
Key Industry Challenges In…Key Industry Challenges In…
© 2014 Copyright Genpact. All Rights Reserved.
Multiple missing links are an opportunity for value creation
Highly disaggregated
and broken processes, leading to
unclear handoffs
Service businesses financially
challenged by
Brands’ service
organizations unable to
commit and execute
service levels
Brands unable to drive Service
Excellence and Customer
Confidence
Result
Service Growth Enablement Service Execution SupportTransaction Processing and
Reporting
Setup & Planning
Service Request
Management
Warranty ClaimManagement
Parts Management
Service Fulfilment
Service Reporting &
Analytics
Contract Management
Returns & Recovery
XX X XX
12
© 2014 Copyright Genpact. All Rights Reserved.13
Focus and Forward: Effectiveness drives a much bigger impact than efficiency
Effective measurement drives improvement: Interplay of “smarter” processes, people, and technology is the key enabler
*Source: Blumberg Report
Efficiency Metrics
Effectiveness Metrics
Effectiveness Levers Affecting BOs
• Field response TAT• Parts OTIF
Service Execution:
Issue resolution
% Reduction of service requests on hold for parts
Improved productivity % Point-in-time savings
Improved resolution % Sustained savings growth
Integrated call field parts Process & Execution
• IB coverage• Contract profitability
Integrated IB and Contracts Process & Execution
Service Growth Enablement:: Contract and IB
expansion
• IB accuracy• Contract
Renewal/expansion Rate
Service requests requiring parts to complete transaction range from 28% to 73%; manufacturing industry median: 43%*
Service Factory: Integrated process and
execution
© 2014 Copyright Genpact. All Rights Reserved.14
The 5 Cs of the foundation
C C CCustomer Satisfaction Cost Cash
CommitmentCommitment
CompetencyCompetency
ChangeChange
CaptureCapture
CollaborateCollaborate
To serve Translated to goals and guidelines
To execute Across the value chain
Mindset Focus on issue and customer
C
C
C
C
C
Sources of revenue (out of warranty) Segments of customer
In the “service” ecosystem With external and internal parties
© 2014 Copyright Genpact. All Rights Reserved.15
The fundamentals: R5 and A5
A5
R5
© 2014 Copyright Genpact. All Rights Reserved.16
Did you know?
Process
People
Technology
Companies that build Service Value Chains often find that 50 % or more of their profits end up coming from after-sale service and support
Service businesses have much higher profitability than the overall business unit – 76% higher on average
Consolidation of field engineer support and parts triaging teams can result in potential savings of ~15%
Remote monitoring deployment can reduce emergency dispatches by 30% and result in savings of ~5%
Manufacturers often have individual, disjointed IT systems to manage post sales services. An interconnected, holistic system of related processes and technology platforms is MISSING
Over the past few years, investments in service management software have grown by 25% annually – 2.5 times the rate of overall IT spending
Source: Reports by Accenture, Mckinsey, Deloitte; Genpact Insights
© 2014 Copyright Genpact. All Rights Reserved.17
Service organizations are struggling to transform from cost to profit centersAn effective “service delivery model” will enable this process
Enabling service transformation
“Cost to Profit”
Optimize Cost to Serve
Increase customer satisfaction
Drive service revenue
Enhance service profitability
PeoplePeople ProcessProcess
TechnologyTechnology
Service Delivery Model
KPImeasurement
framework
KPImeasurement
framework
© 2014 Copyright Genpact. All Rights Reserved.18
Building blocks of an effective service delivery modelNext generation service and business process execution
Creating next generation processes and institutionalizing KPIs
Creating next generation processes and institutionalizing KPIs
1
Technology platform as a key enablerTechnology platform as a key enabler
Connect business level KPIs to operational KPIs
Provide visibility into L2 and L3 process measurement metrics
Explore inter-linkages between business outcomes and process metrics
Creating a strong “backend” and service delivery model
Creating a strong “backend” and service delivery model
2
Centralize service support to impact service revenue and cost
Decouple similar processes and consolidate them
Establish a seamless linkage between customer contact and service issue resolution
3
© 2014 Copyright Genpact. All Rights Reserved.
Presentation Title Goes Here
© 2014 Copyright Genpact. All Rights Reserved.
Intervention 1: Institute KPIs centrally and create next generation processes
© 2014 Copyright Genpact. All Rights Reserved.
KPIs to measure using AMS Smart Enterprise Processes
ILLUSTRATIVE
Request to Repair (R2R) Business Outcomes: Cost of Service Service Revenue Customer Loyalty
Service Fulfillment
Warranty Management
Parts Order& Logistics
Setup & Planning
Service Invoicing & Reporting
Service Request
Management
Contract Management
Level 2Sub-process
Key Performance
Measures
Level 3Activities
Key Performance
Measures
Level 1SEPSM
Handle field admin and
support tasks
Fix problems remotely
Re-order/correct/ place new parts
orders
Tools scheduling and
fulfilment
Service Provision & Field Support
Coordinate and expedite with
service vendors
Complete field service report
after FE debrief
• FE utilization• Support cost per
repair• Fulfillment TAT
• Remote
resolution
percentage• Resolution TAT• First time fixed
right
percentage
• Tat• Answer rate• Accuracy • First time
response
• Order accuracy• Tat• Back order %age
• Tat• Availability
percentage• Tools calibration
percentage
• Tat • Compliance
percentage
• Debriefing
accuracy• Missed billing $
SAMPLE
© 2014 Copyright Genpact. All Rights Reserved.21
Establish Linkages Between performance measures and process outcomes NOT EXHAUSTIVE
Max
Minimum
Median
Key Business Outcomes
Field engineer utilization
%
30 79
59
Key Performance Drivers
% Asset remotely connected*
21 100
83
First time fix rate % 27 86
66
On-time parts delivery % 81 96
89
First time part fill rate%
Work orders completed late
%
% Back orders
TAT compliance %
7677
31 9
17
Deploy and monitor remotely
Field service support
Key Performance MeasuresSub-processes Activities
Remote resolution %
5 90
47Fix problems
remotely
Available capacity
Use analytical models for field force forecasting and
scheduling
Wrench timeDispatch the best-fit customer
engineer based on skills, proximity, availability,
preference
Ensure service history records, IB details, required parts/tools
info and other documentation is provided to CE
Manage entire dispatch process until closure and action on all field support activities within
specified TAT
Expedite with logistics / 3PL partner for on-time parts
deliveries onsite
Follow-up on open dispatch / back-orders, handle exceptions,
liaise with vendors, etc. for timely repair/deployment
82
IB accuracy %
Source: Aberdeen Service Management Benchmarks
© 2014 Copyright Genpact. All Rights Reserved.22
How KPIs link to business outcomes to drive action
Service Parts Management
2
Service Issue Resolution
Higher customer satisfaction Reduced service resolution TAT Reduced service cost
Optimized field/warehouse Inventory Improved order fill rate Reduced order fulfillment TAT
1• Percentage of total calls
resolved on initial contact
• Average cost per service request
• Average length of call as a percentage of target time limit
• Just in time (JIT) delivery %
• Order fulfillment TAT
• Back orders as a percentage of total parts orders
• Wrong shipment percentage
Business Outcome/ImpactService Area Related KPI
© 2014 Copyright Genpact. All Rights Reserved.
Presentation Title Goes Here
© 2014 Copyright Genpact. All Rights Reserved.
Intervention 2: Creating a strong “backend” and service delivery model
© 2014 Copyright Genpact. All Rights Reserved.
De-Couple, consolidate, and centralize: Building blocks
24
Field ServiceField Service Parts ManagementParts Management
FE SchedulingDispatch Creation
FieldRepair
Manage & Track Field Parts
Parts Ordering Tools Sourcing
Manage Field Returns
FE DebriefField Admin & Support Tasks
Field Service Metrics Reporting
Invoicing AuditUpdating FE Availability Calendar
Parts Logistics
Order ReceiptEstimate and Promise Delivery Date
OrderEntry
Follow-Up for Back Orders
Shipment Tracking
Parts returnsParts Expediting
Global Order Triage
Parts planningScrap Management
Field Parts management
Centralized Support Platform
Apply Lean/Six Sigma principles
Establish link with local physical execution
Field Admin Time Vs Wrench TimeField Admin Time Vs Wrench Time Parts Velocity Vs Fulfillment support costsParts Velocity Vs Fulfillment support costs
© 2014 Copyright Genpact. All Rights Reserved.
Centralized support platform: People and process
25
Call CenterCall Center
Product Support &
History
Product Support &
History
Field Service Support
Field Service Support
PartsSupport, Planning, and
Fulfillment
PartsSupport, Planning, and
Fulfillment
Returns Management
Returns Management
AdministrativeSupport :
Service invoicing, etc.
AdministrativeSupport :
Service invoicing, etc.
ISC/Field Engineer
Parts Supply
Customer Calls for Service
Via email, chat, phone, etc.
Knowledge Management
Centralized Support Platform
OEMOEM
Warehouse/LSP
Installed Base Management
Installed Base Management
Contract ManagementContract Management
© 2014 Copyright Genpact. All Rights Reserved.
Presentation Title Goes Here
© 2014 Copyright Genpact. All Rights Reserved.
Intervention 3: Technology as a key enabler
© 2014 Copyright Genpact. All Rights Reserved.
Beyond technology: Driving value across the AMS chain
27
Tight integration of technology with
process and people
will drive “Realized Benefits”
Technology is outshining human collaboration and communication but
provides only “Potential Benefits”
PROCESS
TECHNOLOGY
PEOPLE
© 2014 Copyright Genpact. All Rights Reserved.28
Technology Platform: What does the market need?
Customer setup and admin
Add OEM Add product, parts, incidents,
installed base Add user Add policies, etc.
Service fulfillment support
Geo-tagged field scheduling and follow-ups
Step-by-step diagnostics Service checklist Voice of the customer (VOC)
Warranty management support
Warranty entitlement check Warranty payout definitions Warranty claims management Quotations
Service request management
Service requests, customer registration (contact center)
Service requests at carry-in centers
Online registrations
Parts inventory management
Parts request management Parts MSL, reorders, and
forecasting Defective returns,
replacements, DOA
Service vendor management
Add vendor Define vendor role Define vendor area of ops Vendor terms Credit management
Knowledge management
Guided troubleshooting Service manuals Repair history Product features Self-servicing
Contract management
Automated contract generation
Contract workflow (lead to conversion)
Contract profitability Contract SLAs
Service analytics and rigor
KPI visibility and analytics Scheduled reports Service quotations, partner payouts, and service financials Reminders and escalations
© 2014 Copyright Genpact. All Rights Reserved.
Bring all critical components under one umbrellaAchieve visibility and control through the right combination of people, process and technology, all at a common ‘workplace’
People
• Trained to handle AMS operations
• Consistency in delivery
• Structured interactions with customers
Process
• Metrics-driven process measurement• Well documented and consistent
operations• Ensured business benefits, guaranteed
performance• Predictable and reliable
Technology
• Proven platform for managing distributed AMS operations
• Superior visibility and control
• ‘One Company’ approach
29
© 2014 Copyright Genpact. All Rights Reserved.
The Service factory modelA confluence of process, people, and technology
30
Centralized back end: Interplay of skilled people, smarter processes, and integrated technology
Local execution of service supported by a
Common central support platform
Measurement system to identify and link key performance indicators (KPIs) to business objectives
Focus on realized benefits
© 2014 Copyright Genpact. All Rights Reserved.
About Genpact
Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients.
Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability.
We have global critical mass – 62,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally.
Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years.
For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn.