Network News Volume 47 Issue 3
Metamorphosis in the Service Industry By: Claudia J. Betzner
The
service Industry is changing. We now see break/fix companies expanding
into new areas on an escalated basis. In the past few years we have
seen a migration to not just servicing the equipment but selling the
equipment, providing consulting services, professional services, network
services, cabling, internet connection services, even software services.
We now see many companies getting into communications services. Our
communications between each other is becoming instantaneous with email
on cell phones, handheld devices, and palm pilots. Who could have
predicted just ten years ago we would be in such a productive growth
mode. Sure, we are a maturing “service industry” but that is why we
are seeing the growth in new areas. Earlier this month I attended
the AFSMI meeting in Atlanta where we held a SIA Board meeting immediately
at the conclusion of the AFSMI annual meeting and their speakers and
exhibitors were a mix of new talent and services now being offered
to Service Executives. There were many Software companies, Wireless
Communications, Logistics Management Companies, Parts companies and
Consulting Companies. I saw old friends in the middle-age of their
careers beginning new companies—offshoots of their existing talents.
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Many years ago we began talking about co-opatition, competing on some contracts and co-operating with the same service partner on others. We now see service partners between OEM’s and ISO’s, ISO’s & ISO’s, previous major competitors now partnering. This is now a trend we see in the industry. All OEMs now utilize some level of Independent Service Providers to supplement their service. We cannot do without the OEMs since it is a major source of revenue to an ISO and the OEMs cannot be as profitable without utilizing the Independent service Provider. Their strategy now includes ISO’s as service partners. It seems we need each other to survive in the service arena. This is one subject we will be discussing at the annual SIA conference with a major summit of cLevel executives made up of the leading OEM’s and the leading ISO’s. How to continue Building the Bridge between OEM’s and ISO’s. We have assembled a Industry Panel to discuss dynamic topics presented by the audience. Participation and interactive sessions will be the focus of the event. This year our focus is more dynamic, more interactive since this seems to be the one thing you cannot get in a canned presentation. How often do you have the opportunity to discuss concerns, opportunities and challenges in the service industry in an open-environment? |
Important
this year is a case history of a major customer’s perspective. How
does he choose a Service Provider.
Of course, the biggest news this year is….. we are teaming with
the cLevel Executives of AFSMI so you will have new networking opportunities
with some of the major corporations in America.
We are also inviting Exhibitors from AFSMI to participate.
New Sponsor & New Members
New
Sponsor
Barrister Global Services becomes a Bronze Sponsor
Barrister Global Services Network is a premium provider of multi-vendor
IT services that deliver superior resolution to any client/server
hardware challenge. Established in 1972, Barrister provides services
for warranty and non-warranty maintenance, networking, project support
and web-based service call management and delivery. We have warranty
authorizations and preferred partner relationships with over 20 manufacturers
and technical expertise covering the products of over 200 manufacturers.
Barrister provides exceptional multi-vendor management through a single
source solution, enabling our customers to spend their time focused
on their core business.
Barrister serves hundreds of thousands of customers in large and midsize companies and government throughout North America through direct and indirect channels. For manufacturers and retailers to insurance companies and federal agencies, Barrister provides efficient hardware problem resolution, from initial call, to deployment of technicians, right through to closure. We get the right technical skill to the right customer location at the right time for fast and predictable hardware problem closure.
New Members This Quarter:
Logical Maintenance Solutions
Craig Youngblood, Pres.
Santa Ana, CA (IT Group)
714 549 1608
Cyoungblood@lmsservice.com
Microserv, Inc.
Jonathan Scott, Pres. & CEO
Kirkland, WA (IT Group)
425 820 5605
Info@msvinc.com
Kinetic Biomedical Servs., Inc.
Jim Graham, Pres. & CEO
Erie, PA (Medical)
814 836 9800
Corporate@kineticbiomedical.com
Professional Copy Systems
Wayne Carlile, President
Orem, UT
801 301 4380
New members in 2002
Regal Technology Partners, Inc. (Computer Group)
949 583 7400
Toho Technology USA (Copier Group)
847 464 5961
Pembroke’s Inc. (Copier Gp)
801 521 0450
Clayton Technical Srvs, Inc.
905 361 5000
Renova Technology (Computer)
770 448 4778
Integrity Medical (Medical Gp)
941 454 9555
PartsSource (Medical Gp)
440 735 5060
Diagnostics Issue in Auto Industry gets help
Over the last few months you have been receiving regular emails from
me asking you to support legislation in the Auto Industry on their
“Vehicle Owner’s Right to Repair Act S.2617.” While the official bill
is still in committee, the “Big Auto Manufacturer’s” in early October
agreed to release computerized car repair codes to the over 13,000
independent repair shops nationwide after much heat from associations
like us including AAA and members of Congress. A hearing was held
this summer when Congress threatened Auto Makers they would require
them to provide the codes if they did not do so themselves. It seems
Members of Congress would also like to choose who repairs their cars.
Many of you responded that you did in fact send letters to your congressional
representatives, both in SIA and NISO. The independent auto repair
business, which had been lost as a result of not having the “closely
guarded codes used to diagnose troubles” was estimated at $18 billion
and included such regular repairs as anti-theft system codes, air
bag system codes, etc. Over the next couple of months, the association
will examine how the adoption of this new policy by one industry may
have an advantage in our industry.
While it is not clear if all codes will be released, or just a part,
it is a clear victory for all industries who have a problem completing
repairs because of a diagnostics issue. In the Copier industry you
can get the Diagnostics but you must have a license agreement and
agree to pay a large fee for the use of the diagnostics. You may recall
we have also had this same issue in the Service of Medical Equipment
and IT equipment.
This issue will also be explored and discussed at the annual SIA conference in March at the Mirage in Las Vegas. It will be on Tuesday Morning, March 4,2003, during the Legal & Legislative Update.
Choice makes the world
go around…The Benefit of Aftermarket Competition in the Service Industry
by:Claudia Betzner and a co-operative effort by the Board, SIA White
Paper
How would you like it if you had to go back to the Doctor that delivered you for your lifetime healthcare? How would you like it if you had to take your car back to the Original Manufacturer each time you needed a repair on your automobile? What about you’re Computer or your Copier? What if each hospital or clinic had no choice on the service of his or her MRI’s or medical Equipment? Would you like to have no choice on aftermarket service? No, of course not because You know your costs would escalate and the service, having no choice would be on the Manufacturers terms. You know quality would deteriorate. Service Industry Association’s primary Purpose is to see that consumers have choices and the Service industry has a level playing field. The benefits of competition in the marketplace boil down to higher quality service and more competitive Service Pricing. In other words…Choice makes the world go around.
When
there is aftermarket competition service pricing is more competitive.
When price Competition exists, suppliers compete to service customers
whose main objective is to acquire the Maximum value for their dollar.
Manufacturers have tried to monopolize the after warranty service
Market to control the price levels. However, consumers want variety
and choice in determining their service offerings. According to
the Gartner Group, the worldwide IT services market size is $557 billion
for 2002, up from $542 billion last year. So even though some forecasts
dome and gloom, the fact is the services market for IT is
growing. The largest percentage of this pie goes to the Manufacturer
but some OEM’s such as Sun and Dell have a strategy of concentrating
on the Product and setting up service partners such as Independent
Service Providers for the Service of their products. Most manufacturers
now provide multivendor service, which has legitimized the third party
service Industry. When they are servicing equipment not Manufactured
by them they face the same problems…. OEM’s need the necessary software
Diagnostics, the necessary parts in a timely manner and they need
training. ISO’s (Independent Service Organizations) tell us a large
percent of their revenue comes from OEM’s subcontracting to them,
which also helps the consumer because his costs is reduced when the
manufacturer doesn’t have to go out and hire someone for a particular
geographic area or product niche. The laws permitting and validating
the existence of aftermarket competitors originated in the copier
industry in 1992 even though third party service has been around for
the past three decades. In 1992 the famous Kodak case was decided
about the sale of spare parts for Kodak high-speed copiers. On the
heels of that decision by the U. S. Supreme Court, Xerox settled a
similar case, providing more than $200 million in coupons that helped
aftermarket companies to compete.
When there is after-market competition, manufacturers lose the ability to render a product obsolete by arbitrarily terminating after-sale support. Access to non-manufacturer service provides the consumer with the ability to continue using a piece of equipment that they already own for as long as its performance continues to be acceptable to them. After all, it’s usually cheaper to repair than to replace.
When there is aftermarket competition quality of service becomes
a service differentiator.
Non-manufacturer services have other important characteristics.
Non-manufacturer services providers are vendor neutral, more likely
to be crossed trained on many different brands of equipment, and more
likely to be able to support and fix a facility’s entire equipment
inventory. Also, in-house equipment maintenance departments should
recognize that they have many interests in common with independent
service organizations and should support an open platform. It appears
that the U.S. has become, or at least has made great strides in realizing,
a post-industrial society, with services assuming the paramount role
in the economy. The service sector in the U.S. accounts for about
75 percent of all employment and more than two-thirds of the GDP.
The Resourced-Based View (RBV) states that firms can gain an advantage
over competitors by using bundles of resources, which are subject
to mark inefficiencies. When market inefficiencies surround a competency,
the result is uniqueness. The RBV is an insightful perspective in
that it points to the object of a firm’s focus. Determining uniqueness
to differentiate competition is the fundamental idea behind service
competition. After all, it is “having Choices” that makes the world
go around.
Service Industry Association Executive Summit—A cLevel Summit of SIA leaders and AFSMI leaders
Challenges and Opportunities in the Service Industry
March 2, 2003 Sunday
| 12:00 Noon | Annual Golf Tournament SIA and AFSMI – John Rinas, Northrop Grumman Chairman |
| 6:30 P.M. | Welcome Reception with Exhibitors |
March 3, 2003 Monday (Morning Session Strategic, Afternoon Execution)
| 7:00 A.M. | Continental Breakfast with Tabletop Exhibitors |
| 8:00 A.M. | Welcome – SIA and AFSMI |
| 8:30 A.M. | Keynote Address Challenges and Opportunities in the Service Industry – Janet Wallace, CEO UNISYS |
| 9:15 A.M. | Summit Panel of Industry Leaders
– A view from the Bridge State of the Industry & Future Trends, Changes, Vision, Historical value – Panel: Gartner/IDC gives overview of Industry; A Medical ISO, OEM Member/multivendor service provider IT ISO - (Questions to be gathered at Break for part two) Possible Speakers: ISO – Hugh Taylor, President Northrop Grumman IT CIS; Getronics, Qualex; OEM – IBM top exec, HP top exec. + Paul Stowden, CEO Seimans (SIA will invite the ISOs and AFSMI will invite the OEMs) |
| 10:15 A.M. | Break |
| 10:30 A.M. | Resume Panel in an Interactive cLevel Roundtable discussion with audience participation. Moderator will be Gartner/IDC/Deloitte - Questions will be gathered from Break plus moderator will have prepared questions to stimulate discussion |
| 11:30 A.M. | Joint promo from each Association Leader – Each provides brief overview of benefits of their association |
| 12:00 A.M. | Lunch |
| 1:00 P.M. | Service Orientation Profitability
– A case history Paul Stowden, CEO Seimans (Lessons learned from his execution of a Service Profitability Strategy, ups and downs) |
| 2:00 P.M. | Major Consumer – A Service Strategists – Service Strategy from a Customer’s view, decision tree to include total costs of ownership with service and equipment - |
| 3:00 P.M. | Break |
| 3:15 P.M. | Managing Change in the Service Industry David Abney, CEO UPS (Invited) |
| 4:15 P.M. | Summit Interactive Wrap-Up – all Speakers
of the day will answer Questions with a final chance at getting answers to questions presented during the day |
| 6:30 P.M. | Reception with Exhibitors – close of Joint Sessions |
March 4, 2003 Tuesday SIA annual meeting
| 7:00 A.M. | Continental with Exhibitors |
| 8:00 A.M. | State of the Industry – John Walker & Vote on slate of officers |
| 8:30 A.M. | Roundtable follow-up from previous day discussions |
| 9:30 A.M. | Information Superhighway & Other Legal Landmines – Website protection, patent & logo infringement, trademarks/copyright infringement, Section 508 free access to website, CA law use of Social Security Protection Act, identity theft, Privacy & Security (General Counsel of Northrop Grumman to be invited to participate) |
| 10:00 A.M. | Break |
| 10:15 A.M. | Legal & Legislative Update – Ron Katz |
| 10:45 A.M. | Optimizing Service Delivery through Technology – Case study in Service Delivery Tools including Wireless options |
| 11:30 A.M. | Customer Sat Survey – Walt Gasparovic |
| 12:00 | Lunch |
| 1:00 P.M. | Generating New Revenue – Creativity Outside the Box |
| 2:00 P.M. |
Breakouts of Special Groups: Medical, Computer, Copier |
| 6:30 P.M. | Grand Finale – AFSMI participants
will be invited – Location Not decided yet (A fee will be charged as an add-on to cover the costs of the event) |
Save some time at the SIA Conference to visit the surrounding areas of the desert. Perhaps a trip to the Grand Canyon, or the red rocks, or the Hoover dam.
Update from the Board
Your Board of Directors has been busy with Conference planning, Membership and watching over your interest through legal and legislative actions. We are continuing to add value on our Website. As a member, you are privileged to service request from all over the world. If you haven’t been to the website lately and don’t remember your password, call headquarters. At the conclusion of the AFSMI annual conference held October 6—8, 2002 in Atlanta, your Board met with the leadership of AFSMI in the planning of the first ever joint executive summit of the cLevel executives in both organizations. We are also announcing a joint membership in both organizations. As a member of SIA you will receive a discount to join AFSMI, again if interested, call headquarters. Their cLevel executives are also given the opportunity to join SIA as a corporate member.
Our
next Board meeting will be held in the Washington, D.C. area at the
Northrop Grumman headquarters on December 12, 13, 2002. As a member
in good standing you are always invited to attend a portion of the
meeting.
At
the last meeting Hank Semmelhack was elected to the position of Secretary-Treasurer
for the 2003—2005 term since Mac McBride has expressed his desire
to retire. The good news is Mac has remarried and is continuing his
CPA and Consulting services but his son will be taking over Red Lion
Medical Safety. We thank Mac for his distinguished service to the
association.
IT Services Group Update
Election season is upon us, even for Service Industry Association,
and we currently have two open board seats for the IT Services Group.
The current board members consist of Hank Semmelhack of Barrister,
John Rinas of Northrop Grumman and myself, Randy Parks of TFE. We
will continue to serve and are looking for at least two additional
members to join the board for next year. Barry Cummins has resigned
his position as a result of his leaving Varilease. The association
thanks Barry for all his hard work over the years and hope he will
again become active in the association in the future.
These positions are not a burden, we spend about two hours per month by phone or email communication and meet once per quarter in rotating locations. In addition to the service we provide to the association, I believe my fellow board members would agree that we all benefit from the time away from our normal duties and the opportunity to network with others in the industry.
Most of the board activity and discussion centers on the areas of conference planning, membership growth, membership rates and structuring and the legal and business challenges facing the service industry. If you have an interest in putting your name in nomination and participating please contact me at (770)371-5094 or randy.parks@tfetech.com.
Elsewhere in this newsletter you will see the latest agenda for our 2003 Conference. This year’s conference is being held in conjunction with AFSMI and promises to be one of the best in many years.
Last but not least, please join us in welcoming the newest members to the IT Services Group, Logical Maintenance Solutions (LMS), Rollouts, Inc. and Microserv, Inc. I have had the pleasure of doing business with all these new members and they will be great additions to our ranks.
Medical Group Update
Malcolm Ridgway has assumed leadership of the Medical Group within
SIA. As you know Malcolm and Masterplan are long term supporters and
Sponsors of this association. The group continues to hold monthly
conference calls and discuss important issues within the Medical Service
Industry. They too will have an open position on the Medical Board
and if you are interested you should let one of the Board members
know of your interests.
As you can see by the 2003 SIA Conference Agenda we will have important
topics and speakers for the Medical Industry. Please join us at this
historic event.
SIA Proudly announces TWO Gold Plus Sponsors<
TFE Technology Holdings is a leading national computer service
provider offering cost effective alternative maintenance services
for a very wide variety of products from various equipment manufacturers.
In business since 1976, TFE Technology continues to service the maintenance
needs of both government and commercial customers throughout the United
States.
With
TFE Technology's certified and experienced technical staff, support
can be provided for most major manufacturers and can be configured
to meet your business requirements.
TFE can provide both On-call and On-site service and support which
is available 24 hours a day, 7 days a week. Please do not hesitate
to Request additional information!
TFE Technology has over 50 service locations throughout the United
States. Additional service locations continue to be opened as our
business opportunities grow.
Northrop Grumman's Information Technology sector is a premier
provider of advanced information technology solutions, engineering
and business services for government and commercial clients. Headquartered
in Herndon, Va., the sector has 2001 sales of nearly $4 billion and
more than 22,000 employees worldwide.
The Information Technology sector supports a wide range of information
technology (IT) services for government, commercial and international
customers. In the federal IT market, the sector is a leading provider
of IT services to the Department of Defense (DoD) including such areas
as battle management, mission planning, modeling and simulation, information
assurance, software engineering, intelligence, surveillance, space
systems, base and range support.
The sector is a top-tier integrator of large-scale information systems
for customers such as the Internal Revenue Service, Department of
Justice and the FAA. The Information Technology sector also provides
technical services, such as operations and support services for government
facilities including NASA's Kennedy Space Center, Cape Canaveral Air
Station and Patrick Air Force Base, and is one of the largest suppliers
of software enterprise licenses to the DoD.
As a leader in hardware/software sales, solutions and services to
government customers, the sector has earned a place on several major
indefinite delivery/indefinite quantity contract vehicles such as
ANSWER, Millennia, NIH CIO-SP2, Smart Access Common ID Card, Safeguard
and I-Assure.
The sector also supports a wide range of IT services to federal civilian
agencies, state and local and commercial customers. The company's
offerings include hardware and software maintenance, systems administration,
network design, systems integration and modernization and facility
management services. Customers include Fortune 500 companies, IT outsourcing
providers, original equipment manufacturers, integrators and resellers.
| Service Industry Association 518 San Andres Drive Phone: 619 221 9200
The Network for High Technology Service Promoting
Customer Choices
|
Service Industry Association is a non-profit organization made up of high technology service companies promoting customer choices. |
