KPI’s, metrics, goals, and objectives. Measuring performance in a field service department has never been more more important. How do you decide which metric to attain, profitability, utilization, or billable hours? These and other metrics are certainly important for measuring success, but how do you define success in a service department.
In a previous post I asked “How Should Service Define Success?” Success in field service department is defined by business objectives. If the objective is to achieve maximum service revenue then a billable hours per tech is a very important metric. If the objective of the department is to support sales activities, then a better metric might be utilization. Utilization as measured by value activity rather than billable hours. If field operations are expected to support non-revenue generating activities, then profitability is not the best gauge of success.
These different perspective on the goals that measure success have common ground. Regardless of the measuring criteria, it starts with hours. Understanding what is being done and how long it takes is a fundamental beginning to understanding your service department. Starting with hours and activity rather than trying to calculate utilization or profitability will give you true insight to what your service department is capable of. Starting with hours and then moving to utilization, and then to revenue. It is easy to start with other metrics and work towards hours and tasks, but you will not be able to make informed decisions working in that order.
Field service departments can have a huge potential to benefit your business. Service revenue, parts, upgrades, technical sales, continuous improvement, and social media interaction. Your field service reps are doing all of these things right now, the secret is to channel it in a way that works towards the long-term interests of the company. Following lean management principles towards your field organization is the best way to achieve goals.
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