In May 2009, we announced that Axeda received VeriSign Security Certification for the third consecutive year. This certification is a result of a comprehensive assessment covering our entire product portfolio and internal processes. 

I'll resist the temptation to elaborate on how proud I am of Axeda's R&D team and instead talk about why this is important to our customers and their customers. 

First, let's briefly review the Axeda solution architecture for Smart Services.  Our customers that manufacture or manage wired assets install an Axeda Agent on or near their assets, which are deployed on their customers' corporate networks. The agent works with the Axeda Enterprise server to provide our customers with two-way, Firewall-Friendly monitoring, communications, and control of asset data and events in real time. With the transmission of data from a customer location to the manufacturer site or into our hosting center, end-to-end security is a must-have requirement! 

Since the company's inception, we have engineered security into our products because we recognized that without rock-solid security, our customers and their customers would not accept Smart Services. The initial VeriSign Certification - the first remote service application to receive this distinction back in 2006 - validated our efforts and gave manufactures third-party validation that Axeda technology was secure and that their customers would willingly accept Smart Services on their networks.

Hundreds of thousands of deployments later and our third VeriSign Security re-certification proves that our solution meets our customers' (e.g., Diebold, EMC, CareFusion, and Comverse) and their end-customers' (e.g., banks, governments, airports, and hospitals) stringent security requirements.

As reflected by this re-certification and our continuous engineering efforts, Axeda focuses on delivering end-to-end secure solutions, enabling our customers to focus on delivering high-value service and support to their customers.

2009 Deployment Excellence Award Winner:
Cardinal Health - Clinical and Medical Products Group
Pictured: Denny Simmons (Cardinal Health-CMP), Dale Calder (Axeda), Ed Anthony (Cardinal Health -CMP)

It's always really interesting to talk to customers and hear how they measure the success of their smart service programs.  At the recent 6^th Annual Remote Device Monitoring & Management Summit in Boston, I had a chance to speak with a number of our current customers to understand the progression of their programs.  We talked about how they view program success and there were many common themes from customer to customer regarding success metrics. Here's a look at some of the most common:

• Reducing Service Costs - most customers are looking to minimize the number of truck rolls by their field engineers.  Many of the presenters at the Summit highlighted the cost of a truck roll, which most estimated to be $300 per event.
  
• Reducing Mean Time to Repair (MTTR) - remote access provides our customers' support teams with the ability to accelerate resolution time to resolve a customer's field issue. 
  
• Shifting the Paradigm - there was a lot of discussion around continuing to move from proactive to predictive and ultimately self-healing.
  
• Improved Customer Satisfaction - our customer base is always looking for ways to drive greater loyalty within their install base, from a retention and future wallet share perspective.

All of these are spot on, but what every discussion always came around to was "how many devices/assets are you actively monitoring?"  This is the Big Kahuna metric for everyone involved in a smart service program - hands down.  You could say "connected devices" is the leading indicator metric, and drives all of the other metrics.

Since Axeda believes deployment success is such a critical part of the overall success of a smart service program, we recognized one of our customers with our first "Deployment Excellence Award".  The spirit of this award was to highlight a customer who has demonstrated unprecedented levels of deployment success.

The 2009 Axeda Deployment Excellence Award was awarded to one of our On-Demand Hosted customers; Cardinal Health - Clinical and Medical Products Group.  The Cardinal Health Support Connect solution is deployed on systems across 4,000 hospitals worldwide.  These deployments happen in highly secure and regulated environments, making this achievement even more noteworthy. Congratulations to Ed Anthony, Denny Simmons and the Cardinal-CMP team who have been on the leading edge from a sheer volume standpoint, while driving tremendous levels of internal adoption, as well as continued deployment growth rates.

Will you make a run for the 2010 Axeda Deployment Excellence Award?

Purchase price isn't everything.  

Total Cost of Ownership, or TCO, is a common method used to evaluate the expected lifetime or ongoing costs of several alternative approaches. Pioneered by Gartner more than 20 years ago, the Gartner TCO model takes into account four broad categories of cost: capital, IT operations, administrative, and user operation.

A recent Gartner press release provides the following example. "For a large company, the cost of purchasing a desktop PC may be only $1,200, but, kept for four years, the total cost of ownership (TCO) could be as much as $5,867 per year..."  Note how the operational costs can accumulate over years and overwhelm acquisition costs.  Calculating TCO can help you better understand and compare the costs beyond the initial purchase.

For this discussion, I am going to simplify the Gartner model and focus on acquisition costs, implementation, and operation.

Acquisition
Acquisition costs include everything it takes to purchase the solution components. This will include buying the software license, infrastructure hardware (e.g., servers, storage, load balancers, routers, etc.), and infrastructure software (e.g., application servers, database servers, backup and recovery tools). These items are often where all the focus goes during the decision and purchasing process, and they are important, but they may represent less than 30% of the TCO.

Implementation
Implementation costs cover the wide range of expertise necessary to assemble the components into an operational solution. This starts with the solution design process in collaboration with all of the players that will be involved. Once the plan is in place, there may be internal and external resources required for the software development necessary to configure or customize the software to the field devices.  It will also include the IT experts necessary to set up the equipment in the data center, configure it, and then test.  There may be subtle, but significant, differences in the implementation and assembly costs for each solution so pay attention to the details.

There is another set of costs that is similar across any of the solutions being evaluated.  These include the end-to-end testing (and validation for some regulated industries), marketing and promotional costs, and internal adoption programs. You should account for these in your budget, but they only need to be included in the TCO comparison if you believe there is a significant difference between the options being evaluated.

Operation
Operating the solution over time can represent a cost that is many times the initial investment.  Operating costs may include any of the following:

• Hardware and software maintenance fees
• Infrastructure operations costs
• Floor space costs
• Electricity and cooling.
• Internet connection and bandwidth
• Server hardware and software costs
• IT personnel costs (you may need portions of networking, server, security, and database resources)
• Upgrade costs (for hardware and software)
• Scaling costs (more infrastructure needed as the number of assets or users expands)
• Backup and Recovery Process costs
• Costs associated with failure or outage
• Technology training costs of IT support staff
• Training for application users

One of the major drivers for Axeda to offer its platform and applications under the Software as a Service (SaaS) model was to help customers reduce their TCO.  Use of on-demand delivery removes the need for customers to purchase server infrastructure, train IT staff to manage the solution, and handle the process of version upgrades. An added benefit is that the hosted environment has proven to have higher uptime than our customers were experiencing in their own data centers.

Don't forget about the cost of feature requests or enhancements over time. Give some consideration to how much effort will be required to develop customizations and then to deploy them (both at the Server and Agent levels).  This can be a huge impact when considering internal development as one of the options. Is it core to your business to take on the cost of development or can you take advantage of the shared costs a purchased solution provides?

Once you have your estimates for each category, you should be able to assemble a TCO over the first 3 to 5 years. The totals are important, but also use this exercise to help understand when costs will occur. This information and insight will be extremely valuable when you are finalizing your business justification for the project and presenting the program to management.

Read the related articles for Randy's 10-Step Series:
10 Steps to a Successful Remote Service Evaluation
Step 1. Successful Remote Service Evaluations - Have a Vision of What Success Looks Like
Step 2. Successful Remote Service Evaluations - Work with Cross Functional Teams
Step 3. Successful Remote Service Evaluations - Answer What's in it For Your Customers! 
Step 4. Successful Remote Service Evaluations - Agree on a Scoring Matrix and an Evaluation Process
Step 5. Successful Remote Service Evaluations - Security Matters
Step 6. Successful Remote Service Evaluations - Scalability is More Than Just Multiplication
Step 7. Successful Remote Service Evaluations - Usability is the Key to User Acceptance

 

A shoe may be used to drive in a nail, but does it have usability?

Wikipedia defines usability as "a term used to denote the ease with which people can employ a particular tool or other human-made object in order to achieve a particular goal." Almost anything can be made into a tool.  The focus of usability is on how easy that tool can be used to accomplish the desired objective. Which has better usability for driving nails - a shoe or a hammer?

I have had the occasion to interview web designers and user interface (UI) engineers. One of my favorite questions is to ask them for a web site they think is really well designed and one that is not well designed.  I then have them justify their selections. It gives me some insight into how they evaluate the user experience. As technical people, they generally prefer sites that are focused, easy to navigate, and surface information in an expected way. They value information over graphics.

We have all experienced software or web sites that seem to read your mind. Needed information always seems right at hand without requiring you to read the whole page. You finish your work quickly and in a positive frame of mind. If a site is bad, you avoid it unless absolutely necessary. If good UI is so obvious (and so important), why aren't all products or web sites well designed?!

The reason is people!  They have many similarities, but they each see the world through a different set of eyes. They may also have different goals or objectives for their use of the system.

Take the time to understand your user community and their expectations.  Will they use the system every day or only on an occasional basis? Are they after detail or simplicity? Do they prefer text or graphics? Are they self motivated or being pushed? The answers to these questions may impact what level of complexity or navigation they will be comfortable with.

A useful model for solution evaluation is to first define the expected workflows. For example, an asset has a problem. How is the user informed of the problem? What are the steps and information necessary to diagnose the type of problem? How do you determine root cause? What are the options for repair? What people, systems, and other processes are involved or impacted by the workflow?  Create a written summary of each workflow with emphasis on the information required to perform each step.

With workflow summaries and user characteristics in hand, you are now ready to approach the solution UI and judge it for usability.  Have your user community involved in the evaluation.  This will help you better understand their needs and they will have more ownership of the selected solution. Walk through the workflows for each solution under consideration. The scoring is simple - does the solution make it easy for people to accomplish their particular goal?

Read the related articles for Randy's 10-Step Series:
10 Steps to a Successful Remote Service Evaluation
Step 1. Successful Remote Service Evaluations - Have a Vision of What Success Looks Like
Step 2. Successful Remote Service Evaluations - Work with Cross Functional Teams
Step 3. Successful Remote Service Evaluations - Answer What's in it For Your Customers! 
Step 4. Successful Remote Service Evaluations - Agree on a Scoring Matrix and an Evaluation Process
Step 5. Successful Remote Service Evaluations - Security Matters
Step 6. Successful Remote Service Evaluations - Scalability is More Than Just Multiplication

 

Integrated Solutions featured Varian Medical Systems' remote service solution - SmartConnect^TM in their August issue. Varian has received a lot of attention lately - with their recent M2M Value Chain award win and now this great piece of coverage that outlines how SmartConnect is improving their support operations.

Varian was one of the earliest adopters of remote service software and among the most forward-thinking companies in terms of how they can use the technology to continue raising their own bar for customer support.  Since implementing SmartConnect they have reduced their Mean Time to Repair (MTTR) by 50%!

The article is interesting in that it goes much deeper into the technology that I usually see. There is a whole section on Axeda Global Access Server (GAS) technology, which accelerates the UI of our Access desktop sharing application for customers with worldwide deployments. This shows how the market is maturing. The basic success stories have been told, now it's time to dig into the details on how to take these initiatives to the next level.

When evaluating remote service software solutions, it is critical to establish a cross functional team. Everyone doesn't need to be involved in every meeting, but having a wide range of perspectives will help in making the right choice.

Remote service solutions have the potential to touch many different parts of the company.  Support and field service may be the primary beneficiaries, but achieving success may also involve R&D, marketing, sales, manufacturing, product planning, and finance.  The purchase decision is also competing with other financial priorities of the business. The cross functional team provides a forum for proponents and detractors to have a voice in developing the proposed solution.

The output from the cross functional team will be a proposal to the management team tasked with making the spending decision.  The proposal describes the operational (business) need for the project, the recommended solution (with ranked list of alternatives or vendors), and financial calculations that clearly explain the costs and expected benefits of the program over time.

There are 3 elements that need to be considered in building the ideal cross functional team.

• Technical
• Operational
• Financial

Technical
The technical element covers the traditional aspects of a technology purchase.  For example, does the product meet the needs?  Can it be integrated into the existing product and support business systems?  Is it secure?  But wait, how does the technical team know what the needs are?  Without a clear set of needs and use cases, the technical team usually runs a series of experiments with the vendors trying to see which can jump over the most hurdles.  Look for technical team members who can take a big picture view of a problem and balance technology issues with business needs.

Operational
The operational element is made up of the people who will actually use and operate the remote service solution.  In many ways, they are the "customer" for the project. If the system provides value to them, they will use it.

It is critical to get a mix of product and support experts involved in defining the needs of the system.  This should include people who handle front line customer calls, service engineers who have to jump in their trucks and drive at a moment's notice, or the third and fourth level technical support team.  They know what kinds of faults and failures occur in the field and what information they need to make faster diagnosis and better decisions.

Financial
The financial element is focused on converting the technical and operational issues into an ROI metric.  Without this, it is difficult to make priority calls on whether a particular high cost feature is required or a "nice to have."  The financial members of the team don't need to be from finance or be accountants, but they do need to understand the decision making and budgeting process of the organization. 

4 Stages of Small Group Communication|
When you bring your team together, remember the 4 stages of small group communication identified by Bruce Tuckman in 1965:

• Forming - Understand the challenges then agree on goals and objectives
• Storming - Different ideas compete for consideration. Having a skilled leader or bringing in someone from the outside can help facilitate this process
• Norming - Members will begin to adjust their behavior to meet the expectations of the group.  The differences of opinion that were brought out during the storming phase are worked out.
• Performing - A team that reaches this stage operates with a sense of purpose and independence that enables progress and success.

In my experience from the vendor perspective, companies that do not use a cross functional team to develop their program often take a very narrow view on the goals and objectives of the project.  As a result, they have long evaluation cycles and then experience difficulty at the final decision stages where they need the support of upper management and other departments within the business.

Even where cross functional teams are involved, I have seen cases where the members are not equally involved or committed to the project.  As a result, the process is often skewed or falls prey to groupthink. This imbalance creates political issues within the decision process and can result in a project not being sufficiently funded (or not being funded at all).

Final thoughts...
Any strategic initiative should have an executive sponsor with a vested interest in the success of the evaluation.  The executive sponsor should use their influence to get the participation of the other departments in the cross functional team. The project leader should start by determining why each team member is there and if they are committed to the success of the team.  If not, try to replace them. You want a strong team that shares a hunger for success.  For team members, the reward of being on a successful team is recognition and new opportunity as others in the company look for winners to have on their own teams.

My recent blog article suggested 10 steps toward a successful remote service evaluation.  For this entry, I want to drill down on the first step in a little more detail.

Step 1: Have a vision of what success looks like. This will enable you to define goals and the outline of the business case. The best programs are focused on creating strategic value.

If strategic value is important, we should start with strategy.  You do have one, don't you?  An effective strategy combines a measurable goal (where you are going), with a suggested method of accomplishing the goal (how it will be done), and a target to which the method will be applied (who are we doing this for).

Seems pretty simple, but so many companies never articulate their strategy.  They wonder why the various programs, initiatives, and campaigns don't seem to fit together. It's like trying to sit on the three legged stool that is missing a leg or two!  You must have really good balance or accept falling over a lot.

What are some goals that a remote service program can address?

• Reduce the number of field dispatches by xx%
• Improve machine or device up time by yy%
• Eliminate one no problem found call per service engineer per month
• Increase consumable sales by zz% due to increased system uptime
• Avoid adding additional staff (or reduce load on existing staff)

The key ingredient is that each goal is measurable and can be compared to a historical run rate.  It is also important that each goal can be translated into a financial impact for the business.

The "How" is often a function of the goal and the levers that are available in which to impact the goal.  Some examples may include:

• Perform software updates remotely
• Monitor known error conditions for patterns that indicate potential failure
• Remove the burden of data collection from machine operators during the troubleshooting process
• Enable customers to request help directly from the device
• Track device usage to help forecast consumable purchases or preventative maintenance

These don't have to be complicated, but they do have to be capable of being implemented in a cost effective way.

The final element, "For Who", is often lost under the glamour of selecting or implementing technology.  Nothing says a strategy has to apply to every customer.  Many times it is far more effective to focus on the high value or high cost customers first.  Consider these examples:

• For customers with pay-as-you-go service contracts
• For customers in rural hospitals and clinics
• For customers that are more than 4 hours away from a field service office
• For customers under all-inclusive service contracts
• For customers with the X9000 Exterolizer machines

Be specific!  When you explain your strategy internally, it should be clear to everyone which customers you are targeting and why.  This will enable people involved in the project to independently make high quality decisions and prevent expensive detours or mixed sales and marketing messages.

Let's put it all together in a few examples:

• "Improve machine or device up time by yy%" by "monitoring known error conditions for patterns that indicate potential failure" for "customers under all-inclusive service contracts."
  
• "Reduce the number of field dispatches by xx%" by "performing software updates remotely" for "customers with the X9000 Exterolizer machines."
  
• "Eliminate one no problem found call per service engineer per month" by "removing the burden of data collection from machine operators during the troubleshooting process" for "customers that are more than 4 hours travel from a field service office."

Remember the three elements of strategy definition and you will be able to build an effective business case and communicate a powerful message to your management, project team members, and the marketplace.  This core message is very important as you move on to the next steps of the evaluation process.