Since September 2000, Sixmadun AG has been part of the Tobler Group, which distributes heating systems manufactured by Sixmadun, Junkers, and Fröling. As a service organization within this market network, Sixmadun focuses on installing, servicing, and repairing heating systems throughout Switzerland and provides immediate on-site assistance through its emergency callout service.

Background
Sixmadun has been operating in the heating business since 1924. It began by designing and manufacturing oil burners before progressing to entire heating systems. At the same time, the company became involved in aftersales trade with a service network that now spans the whole of Switzerland and currently employs some 130 field service technicians at customer sites. As part of measures implemented to realign its strategy as a sole service organization within the Tobler Group, Sixmadun has been reorganized and now serves the group's customer base, which operates approximately 110,000 heating systems.

The Tobler Group's business model is based on exclusive sales to independent (mostly commercial) heating contractors, who install the equipment at customer sites. Sixmadun then assumes responsibility for operating, servicing, and repairing these systems. In 2003, the Tobler Group itself became part of the Wolseley Group – a company based in Theale in the United Kingdom that operates in the heating, sanitary, and construction markets across Europe and North America. The IT service provider Tobler IT AG also belongs to the Tobler Group.

Industry, Product, and Target Group
This case study focuses on the service components (operation, service, and repair) in aftersales trade. In Switzerland, this market is characterized by intense competition among competitors such as ELCO, Oertli, Buderus, Viessmann, Hoval, as well as smaller local service providers. The Tobler Group has a market share of approximately 25% in the Swiss market, according to its own reports.

Aftersales market performance for heating systems of all types is regarded as complementary business with strong customer retention during the life cycle of the product. Heat generation systems manufactured by the Tobler Group account for over 95% of Sixmadun’s aftersales business. Customers are most likely to switch to a competitor when a system is no longer serviceable and needs to be replaced.

This is why it is important to closely monitor and manage customer relationships with respect to replacement business. It is clear that in-depth knowledge of what the customer needs and a well-honed customer relationship management strategy are the key to success (that is, to land subsequent contracts for replacement systems). The installed base of heat generation systems must be retained to ensure that the existing aftersales business can continue at the same rate. Survival in this market depends on customer satisfaction not only with the system itself, but also with the accompanying services.

This saturated market is characterized by stiff competition for new business. All providers focus on their primary target groups. The customer structure at the Tobler Group/Sixmadun is roughly as follows:

• The Tobler Group trades on a B2B basis only (where the main customers are independent heating contractors, and thus predominantly small companies).

• Sixmadun's aftersales business is primarily B2C (approximately 90% with homeowners, condominium owners, and tenants as private end customers, and about 10% with commercial property and real estate agencies as commercial end customers).

Corporate Vision
In the relatively homogenous competitive environment, it is difficult to create unique selling propositions since emergency callout services have been set up by practically all participants in the market. This is why Sixmadun’s vision focuses more on the finer details of the service process that can benefit the customer. Field service personnel are a key element of this strategy as their role switches from that of simple technician to maintenance specialist with sales skills. With a wider range of information at hand, their objective is to provide a faster and more accurate level of service. In addition to shorter response times, this should improve availability and reliability. Customers no longer need to worry about their heating system once they have a service contract that is tailored specifically to their needs.

The existing information basis of Sixmadun AG, which is built on an SAP-based ERP solution, allowed internal employees to achieve new levels of productivity. However, the dispatch team and other backoffice departments still had to rely on cell phones and paper-based reports to communicate with field service technicians. Not only did these methods present integration gaps, they were also perceived as time consuming and unproductive, particularly for processing large volumes of data and time-critical processes.

If the improved process flows set out in the company’s vision were also to include communication with field service technicians, a solution had to be found that could deliver information and communication content electronically and digitally without media gaps from the central database right through to the technicians, and then return data collected in the field to the ERP system as quickly as possible. The answer was a data communication application for a mobile end device that technicians can carry with them and use while performing their duties.

Importance of E-Business in the Corporate Strategy
E-business is already of significant importance in the Tobler Group and thus also at Sixmadun. The group’s own IT service company, Tobler IT, also plays a key role here.

Tobler uses e-commerce applications to organize the delivery of heating systems to the independent heating installers and integrates these partners in the order process by means of a custom built e-billing solution running on an extranet platform. The entire Group, including Sixmadun, is continuously and consistently searching for effective methods of supporting processing based on IT and electronic platforms. The focus here is on using information technology for selected service provision components and accelerating processes overall.

Partners
IT Partner for Operating the ERP System
The Group’s own IT company, Tobler IT AG (which specializes in IBM AS400, SAP, and Lotus Notes/Domino) is responsible for operating Sixmadun's SAP-based ERP solution.

Partner for Implementing the Mobile Application for Field Service Technicians
An external specialist was called in to implement the mobile application. Founded in February 2000, Syfex AG is a vendor-neutral service provider that focuses exclusively on implementing mobile business applications. Solutions are implemented specifically in line with customer processes to support the areas of field service, sales, and logistics in particular. As an end-to-end solution partner, Syfex offers services ranging from evaluating standard components, implementing and integrating the mobile application, right through to optimizing its operation.

The name IKOS was given to all of the hardware and software system components used to integrate field service technicians in the IT infrastructure at the head office while they complete assignments in the field.

Business Perspective
The following characteristics can be identified in the business model used by Tobler/Sixmadun in relation to the services they provide for heat generation systems:

• The sale of heat generation equipment exclusively to independent heating contractors as resellers to end customers and the associated questions concerning efficient forms of market cultivation with these small, predominantly commercial-oriented companies.

• The Group-internal division of work between commercial trading (Tobler Haustechnik AG) and aftersales service (Sixmadun AG) with the corresponding need for coordination at the interfaces relevant to the Group’s success that lie between both these (sister) companies.

• The link between the sale and installation of the heat generation equipment by the heating contractor and the first intervention of the Sixmadun field service technician as a service provider for commissioning.

• The importance of a consistently updated information basis for Sixmadun office employees (fast order processing and optimized dispatching) and Sixmadun field employees (up-to-date information about the service order to be carried out, the system to be serviced, customer details, and corresponding transfer of information to the head office).

• The use of an external call center that notifies Sixmadun field service technicians directly when required, to support the emergency callout service for resolving problems outside office hours.

The business scenario in Fig. 1 shows the core aftersales services (how field service technicians process service orders based on the order list) in the context of upstream and downstream processes.


Fig. 1: Sale and Maintenance of Heat Generation Equipment by Tobler/Sixmadun

By directly integrating field service technicians in the existing IT infrastructure, the Group aimed to:

• Accelerate response options for dispatchers in emergencies (system failures) and thus provide faster intervention at the customer site.

• Improve the system information available to field service technicians (system history) and the relevant customer data by including precise details of the contractual relationship (ser¬vice contract, costs), and thus enable field service technicians to propose suitable solutions directly on site with the customer.

• Reduce the time period between issuing the service order and sending out the invoice.

• Improve service parts logistics and generally cut storage volumes at all levels with the following productivity aspects:

• Shorter delivery time for service parts and a corresponding reduction in storage volume to weekly requirements.

• Reduction (about 20%) in service part stock kept in each service vehicle.

• Automated delivery by post of service parts stored in vehicles of field service technicians deployed in areas further away.

Process Perspective
The key part of providing services and thus the starting point for generating added value at Sixmadun is the work carried out by field service technicians at the customer’s site. This is irrespective of whether the services are covered by a service contract (an insurance model with down payment at the start of the year, which is of interest from a financial management perspective) or charged on the basis of work reports. Thus steps must be taken to ensure that every service order request received is processed (outside office hours too). The quality of the work carried out by the field service technicians must also be at a level that is acceptable to the customer to ensure that the services performed can be fully billed with respect to time and the material used. This means that, when a problem is reported, the field service technician must be dispatched to the customer site as quickly as possible once the customer has placed the order and must complete the job effectively (using the information about the customer and heating system stored on the mobile end device).


Fig. 2: The Service Process at Sixmadun

With the introduction of mobile end devices as part of measures to improve process quality, Sixmadun is also aiming to exploit the resulting effects, which include processes that can be triggered directly after the order has been completed, for example, billing and material replenishment at different storage levels (base warehouse in Sissach, support point warehouse in the dispatch areas, and service parts stored in the vehicles used by field service technicians). Fig. ?2 shows this in a simplified form as an event-driven process chain.

Within the Tobler Group, Sixmadun field service technicians are regarded as the employee group with the closest customer contact in the existing customer base. This makes them ideal to support sales as part of follow-up business (that is, help to retain customers when existing heating systems have to be replaced). In other words, field service technicians can now also trigger system-based offer processes using the mobile application.

Application Perspective
The applications and data storage systems shown in Fig. 3 indicate how the mobile end device was integrated in the existing SAP environment using mobile data communication.

It is essentially an offline solution that enables field service technicians to work with the device continuously, even without direct contact to the head office (technicians often work in cellars and basements where mobile connections are not possible). Through a clever combination of different synchronization processes that transfer only changed data, however, online communication can be emulated and information relevant to the core process (such as an updated order list based on a problem that was just reported) made available in realtime. Data is exchanged using GPRS since, like GSM, it covers almost the entire area of operation across Switzerland.

As a fallback solution, a conventional GSM cell phone can be used for voice communication and text messaging. This is always carried by the field service technician to make up a two component solution. It allows those employees responsible for potential emergency dispatches outside office hours to enjoy their free time, since callout requests are sent by text message to the phone.


Fig. 3: Mobile Data Communication Between Sixmadun and Field Service Technicians

Technical Features of the Mobile End Device
The field service technicians at Sixmadun use a mobile end device from the Dutch manufacturer OPTICON (PHL 5300 Pocket PC) with integrated mobile communication (Wi-Fi) and barcode reader for scanning and entering data on used service parts directly from the packaging.

Tobler IT first loads the read-only memory with initial data onto the mobile end device in is original state when delivered. The device is then prepared for the automatic installation, which the field service technicians carry out themselves. A hard reset can be initiated on the device using a certain key combination. All of the required program libraries and local databases for each dispatch area are then downloaded for each device from Sixmadun’s central IT system. Up to now, the field service technicians have not experienced any problems when installing the devices. This automatic installation routine also allows end users to feel in control of the process and gives them the confidence to use it on a daily basis.
Overnight and during the day when traveling, the field service technician places the device in the console provided. The master data is updated at night (this involves a full synchronization run with changes to approximately 8,000 items of equipment, including information on heating systems and customer master data, and changes to about 8,000 article master data records). For this purpose, the mobile end device wakes from sleep mode by means of a timer function, establishes a GPRS connection, and authenticates itself on the central servers. The entire synchronization run usually takes around five minutes. The mobile end device then terminates the connection and returns to sleep mode.

A partial synchronization run (which takes about two minutes) is carried out automatically during the day while the technician is travelling to the next customer. This run is used primarily to update the order list and return report data to head office.



Fig. : Mobile End Device of Sixmadun Field Service Technicians

Status changes that must be available in realtime for dispatching are exchanged by means of a status synchronization run that is triggered by the application on the device. This is used, for example, if the field service technician has to reject an urgent service order from the dispatch team for some reason. As soon as the technician presses the “Reject” button in the application on the device, the status synchronization run starts (about 10 seconds is required). This allows the dispatcher to find and dispatch another field service technician for this service order straight away.

Although the solution is often offline, the three different synchronization runs ensure that the only data lost in the worst-case scenario is the last recorded service order (which the field service technician can easily enter again). The update concept is designed to minimize the volume of data transferred. By transferring around 5,500 bytes each day, a database with approximately 20 MB of data can be kept up to date on the mobile device. Only data that has changed since the last synchronization run is transferred.

All data is exchanged in encrypted form. Before the data is exchanged, the end device authenticates itself to the synchronization server at head office by means of an IMEI (International Mobile Equipment Identity). The IMEI is a unique 15-digit number assigned to every GSM end device so that it can be uniquely identified. The end device itself is protected by a user ID and password.

Project Management and Process Redesign
Although change management conditions did present a challenge, the field service technicians were soon convinced of benefits of the solution. A key reason for this was the inclusion of selected technicians in the project team responsible for building the solution throughout the entire design and implementation phase. This ensured that the application on the mobile end devices was tailored specifically to the needs of the technicians and that the benefits in terms of work were clearly evident. The response of the pilot group can be seen as an indication of the high level of acceptance and is representative of the 130 field service technicians in total. About two thirds opposed the new solution at first. After the first three months of operation, four out of five technicians now fully support it and only one fifth is still skeptical. One factor that certainly contributed to this is the fact that the mobile application follows the customary processes used by the field service technicians.

Training was provided on the basis of the established teams. The group leader and one employee from each group of field service technicians attended a preliminary training session. All group members were then given an initial introduction. This was followed by a 3-day practice period to allow the participants to become accustomed to the device. After a recap of the most main points covered during the practice period, live operation started straight away with real data. All the 12 group leaders, to whom the entire staff of about 130 field service technicians are assigned, played a key role in this practical training concept. The entire team was kept informed of the project progress as part of three preliminary information events held in the summer of 2004, as well as in winter and fall of 2005.

The overall project started in September 2004. The design phase lasted until November 2004. Release 1.0 was implemented after four months, which allowed a pilot operation with about 15 field service technicians to be launched in March 2005. The results allowed plans to go ahead to equip all of the around 130 field service technicians across Switzerland by September 2005.

Software Solution/Programming
On the basis of in-house software products from Syfex’s X-service line (standardized function modules for interfaces and applications on the mobile end device) and additional standard components purchased (SQL server, synchronization server, and text messaging server), the new components could be implemented and integrated in the existing SAP and IBM DB2 environment relatively quickly, also with the use of Microsoft Visual Studio .NET. This was due not least to the experience that Syfex has gained from installing around 50 comparable solutions. Interface modules that enable IKOS middleware to access DB2 were also developed. Furthermore, a custom SAP-based front end for the dispatcher’s screen was integrated in the application. The application on the mobile end devices is programmed in C++ and is available in three languages.

In day-to-day operations, Tobler IT is responsible for first-level support and operates a user hotline during normal business hours. Soft and hard reset options, however, allow field service technicians to resolve practically all problems themselves and thus work more independently. If more complex problems arise, defined contact persons at Tobler IT can access second-level support at Syfex (X-Care). The solution, however, has proven to be extremely stable, which has limited such inquiries to three or four incidents a year.

Despite the fact that the solution has yet to pass the acid test due to the seasonal nature of the aftersales business for heat generation systems and that overall results will not be available until after the 2005/2006 winter period, the first impressions are positive. Turnaround times have already improved significantly. Whereas it previously took about a month to issue the invoice after the service order was placed, this is now done in just one week and without any additional effort. As a result, many payments are received more quickly. By implementing a few measures, a period of one week was reduced to just three days.
Total investment in the project (including all project-relevant expenditures) came to nearly CHF 600,000. This can be compared with annual savings amounting to around CHF 350,000 (primarily due to rationalization gains in dispatching, paperless order processing, and a reduction in communication costs). In addition, average stock levels are reduced by roughly CHF 500,000. In light of these cost savings, the company expects investment costs to be recuperated in less than two years.
Communication costs have been reduced since many of the previous mobile voice calls (for dispatching purposes) have now been replaced with an optimized mobile data communication solution that is both more reliable and cost efficient.

The results will be even more overwhelming if the company succeeds in reaching another goal, namely to reduce the delivery time for service parts and thus limit warehouse stock to the amount required each week. This will also indirectly reduce by 20% the number of service parts stored in the vehicles used by the field service technicians. Based on the current value of approx. CHF 20,000, the cost for each vehicle could be reduced by CHF 4,000 as a result. When calculated for the entire vehicle fleet, this constitutes a saving of more than CHF 500,000.

Profitability assessments must include not only quantifiable benefits, but also the increase in customer satisfaction, which is much more difficult to measure. In just three months after the pilot operation was started, the overall impression is that the devised measures will also work in practice.

In-house requirements demanded an end device priced under CHF 2,000. The OPTICON PHL 5300 Pocket PC, costing around CHF 1,200, was selected as it provides a variety of programming options and is suitable for many fields of application in both industrial and office environments. The lightweight device features a GSM/GPRS mobile communication compo¬nent, an integrated barcode reader, as well as bluetooth (for exchanging data with the dedicated heating system measuring computer) and WLAN components (which can be used later if the existing solution is enhanced).

The process enabling field service technicians to become highly skilled customer consultants is supported to a large extent by the accurate information stored on the device. The solution also allows technicians to manage their service order schedule independently, without compromising dispatch decisions taken at head office. The dispatch system is based on the report system and distributes urgent service orders at the right time, based on content and priority, to the daily schedules of the various field service technicians who are active in the dispatch area. Absent times (vacation and unproductive hours such as doctor’s visits and so on) are planned by the technicians directly on the mobile end device and taken into account by the central dispatch team in accordance with internal regulations when assigning service orders. This degree of freedom should boost the technicians' perception of their job so that they identify more closely with Sixmadun as a company.

Since the mobile end device provides access to all the historical data for the installed systems, field service technicians can quickly make the right decisions on site. When service parts are used, the solution on the mobile end device also directly supports the process of ordering and replenishing materials for the service vehicle.

As a whole, both head office and the field service technicians now have access to more up-to-date information at all times, which has had a positive effect on productivity. According to the operator, there were practically no unexpected problems during the project implementation and pilot operation phases.
Despite the encouraging fact that users are able to “get to grips” with the mobile end device in just two days, the training process was still extended further to ensure that they can also use the application with the confidence they need.