Case Study: Ressac Implements Sage Intacct with ServiceTrade Integration
For more than 85 years, Ressac has established itself as a high quality, low-cost commercial contractor for heating, ventilation, air conditioning, and refrigeration systems. Specialties include low-rise office parks, mall retail, and big box retail sites.
THE CHALLENGE
Ressac recently implemented ServiceTrade to improve their service management and customer service. While this solved their challenges on the service side of their business, they were still using an outdated version of Dynamics NAV, a server-based accounting platform, to maintain financial records. “We were so focused on making improvements to the service side including customer service and earning more revenue that accounting was an afterthought,” explains Nick Rohan, CEO at Ressac. “We lacked real-time visibility into our financial information,” he says, “and we had to double key everything.”
With no transparency into financials such as working capital and cash flow, decision-making was more like guesswork. In a very competitive industry, and with a profit margin as low as 5-7%, it was critical to know the current situation when making business decisions. And since data wasn’t being shared between the accounting system and ServiceTrade, the finance team carried a large time burden related to too many AP and AR manual processes.
“Connecting to the old accounting system was cumbersome,” Mr. Rohan explains, “and we had a lot of issues getting into the system.” And with no AP approval process in place, service managers had to approve purchases, which took them away from more strategic job-related activities and created time-consuming invoicing of their clients. Additionally, data siloed within spreadsheets led to inefficient and time-consuming reporting processes throughout the organization.
Ressac desired a cloud solution that could streamline its AP workflow and approvals and provide real-time visibility into its multiple locations’ financial results. Sage Intacct’s financial management software was selected and was seamlessly integrated with ServiceTrade to eliminate many hours of manual data entry and reduce costly errors inherent in their old system.
THE SOLUTION
Nick recalls, “We relied heavily on ServiceTrade’s recommendation of Sage Intacct. When we looked at various systems,” he says, “what sold us on Sage Intacct was the reporting.” And selecting Wipfli as the service partner was easy. Wipfli provided full-service implementation, integration assistance, and ongoing support through a collaborative team approach as Ressac navigated through the process. “We liked the feeling from Wipfli, and had confidence in the team we were talking to,” explains Nick.
Everyone worked together to ensure a smooth integration. “The ServiceTrade integration is behind the scenes, so you don’t really notice it,” reports Nick. “With the Sage Intacct and ServiceTrade integration, we’re operating differently now,” he says. “The time we’ve saved on double data entry allows us to code our transactions, which allows for better financial reporting.”
With real-time visibility and transparency into their financial results across their multiple CA locations, Ressac now has the “right information at the right time” to make critical business decisions. “We’re getting more information out of our systems and doing a lot more meaningful work,” he says. The improved financial reporting means Nick Rohan and his team can easily see where their financials stand on a day-to-day basis.
What’s more, according to Nick, “the thing we really enjoy with Sage Intacct is our ability to access it anywhere from a browser, whether we’re at home or out of town. We can get in and see our daily runs and see how cash is doing,” adding, “it’s been fantastic!”
Overall, with Sage Intacct in place, Ressac taps into deeper financial and operational insights and is able to tackle more strategic issues, keeping the whole organization focused on their customers. Now the pressure of competition is less of a burden as Ressac has the insights its team needs to “grow strategically in existing markets and into other regions.”
LEARN FROM RESSAC’S EXPERIENCE
Key Requirements
Implement cloud-based financial solution to automate and streamline workflows and provide financial visibility
Integrate their new system with ServiceTrade to allow for one single set of data to run the business reliably and remove the guesswork
Key Challenges
Remove data from spreadsheet silos and make it available for decision-support across organization
Save time and reduce costly errors associated with manual data entry
Enable managers to focus on strategic initiatives
Key Outcomes
Gained real-time visibility into their financial results across locations
Saved time, money, and effort through automating processes, enabling greater focus on customers
Positioned to make long-term strategic plans for company
EXPLORE INTEGRATIONS
ServiceTrade can help whether you’re looking to integrate your current accounting system with our application or explore a new accounting solution. Call your representative to talk about the best way to start weighing your options and understanding the scope of integrating ServiceTrade with your accounting or other operational applications.
As a commercial/industrial service contractor, what is your ratio of repair to recurring service revenue? 1 to 1? 2 to 1? 5 to 1? If you don’t know, you could be missing out on a gold mine of high-margin work. If you do, you probably know that there’s room for improvement. And, when skilled labor is so hard to find, you know that you’ve got to drive as much repair revenue as possible to maximize the revenue potential of each tech.
So, what’s holding you back? Funnel friction. In other words, how easy it is to move from the top to the bottom of the repair funnel. Now, before we talk about the friction, let’s define where the funnel begins and ends. Too often, service contractors think that all the magic happens once the deficiency or repair report gets back to the office. As I wrote in another blog post, it actually starts WAY before you ever find a problem to quote. To keep this post simple, we’ll be talking about a funnel that starts with reporting problems in the field and ending with customer approval:
Now, ask yourself: “How much friction is in each task?” Or, simply put: “How easy is each step?” The easier it is, the more money you’ll make.
Report problems from the field
How easy is it for your techs to send the office all of the information necessary to generate a quote? How is that information communicated? Phone calls, paperwork, and email attachments? Does that data have to be manually entered into your database that manages repair sales?
…Do you have a database to manage repair sales? ServiceTrade does this, and if you’re not using ServiceTrade, a good CRM is your next best bet.
It should be as simple as taking a couple quick pictures, videos, and audio notes that automatically get added to a database for your office staff to start working from. The easier it is, the more reports your techs will create.
Create quotes
How easy is it to take a report from the field and create a quote that’s ready for the customer? Do you have to read chicken-scratch handwriting on reports, call the tech for more details, and retype everything into a Word document?
It should be as simple as clicking a couple buttons to turn a digital report from the field into a quote ready for the customer. The easier it is, the more quotes your company will create.
Follow up on quotes
Does your team manage this whole process out of their email inbox/outbox? Is it obvious which quotes need a follow-up? Is that chain of communication effectively managed and easily shared across the team?
It should be as simple as viewing a list of quotes that are due for a follow-up, no matter which of your team members created and sent the quote. The easier it is, the more follow-ups your company will perform.
Approve quotes
Once your customer receives your quote, how easy it for them to say “yes?” Do they have convenient access to the pictures, videos, and audio notes that will help them make the best decision quickly? After they decide, do they have to print, sign, and fax the quote?
It should be as simple as viewing an interactive quote online with rich media collected in the field that can be approved with the click of a button. The easier it is, the more quotes your customers will approve.
The easier all of these steps are, the more repair revenue you will drive and the more you will get out of each of your techs. Spend an hour assessing your processes. You’ll probably be surprised what you find.
Service contractors, you’ve got 2 huge problems. First, skilled workers are expensive and hard to find. We call this the “Skilled Labor Squeeze.” Second, small-time competition is undercutting you on price. We call these fly-by-the-night operations “One Truck Chuck.” With expensive labor driving costs up and cheap competitors driving prices down, you’re stuck in a profit-squeezing vise. So, what are you going to do about it? It may seem crazy, but the answer is to organize your customer service data.
Not sure what I’m talking about? Take a look at this blog post from a couple weeks ago about the inefficiencies hiding in most service contracting businesses. Basically, customer service data, the information necessary to provide world-class service, is usually scattered or locked up in an accounting system and filing cabinets. Data like service history, scheduling information, equipment failure records, and customer contact information, to name a few, are stored in a hundred different places and in a hundred different formats.
Effective collaboration makes technicians more productive and helps customers understand why you are different and better. If your information is locked up and inaccessible by technicians and customers, you’re especially vulnerable to the Skilled Labor Squeeze and One Truck Chuck. Why? Let’s break it down:
Technicians Administration, callbacks, and downtime are extreme wastes of tech time that are all caused by messy customer service data. Taking calls to answer questions about the work they performed last week is a waste of time. Calling the office or other techs to understand service history at a location is a waste of time. Going back to a location to gather data that was lost in the office is a waste of time. Coming back to the office to drop off paperwork is a waste of time.
Real-time collaboration of centralized customer service data in the cloud eliminates all of that waste. When skilled labor is more difficult to hire than ever, it’s critical to keep field technicians as productive as possible. Customers If your only vehicle to inform customers about what you do for them and why you’re important is an invoice, Chuck is going to steal your customers. In their eyes, you and One Truck Chuck look the same. You need to show them how you are more valuable. Queue the customer service data!
Once your data is organized and accessible, you can differentiate yourself from Chuck by collaborating with customers and providing visibility to the quality of your work. You can show them how thoughtful your program is. You can show them the pictures and videos that demonstrate equipment failure. You can show them how you save them money by keeping your techs productive working on their equipment instead of wasting time on administration and callbacks. You can show them how you help them make better decisions because they will have better information.
You will stand out against One Truck Chuck when you collect and use service information in helpful ways for the customer. Organized customer service data enables collaboration. Collaboration makes techs productive. Collaboration creates value for customers. This doesn’t work when the data is locked up in an accounting system. This doesn’t work when data is scattered across spreadsheets, email inboxes, and paper. Organize the mess, free the data, and start collaborating.
Scattered Data Could Sink Your Ship
Every day, we talk to service contractors that think the biggest problem with their business is double-data entry into their accounting system. We tell them the same thing every time. That’s just the tip of the iceberg. Below the surface, it’s hard to see the hundreds of small, but cumulative inefficiencies caused by scattered customer service data. Organizing that data will lead to leaps in efficiency and bounds in customer service.
By “customer service data,” I don’t mean accounting information. I’m talking about the data necessary to provide top-notch customer service and efficiently deploy your most expensive resource, skilled technicians. Data like service history, scheduling information, equipment failure records, and customer contact information to name a few.
Where is your customer service data stored? Multiple spreadsheets and Word documents on a server? Paperwork, files, and whiteboards? Pictures and videos on phones and random computers? Even worse, an accounting system that isn’t designed for customer service that only a few back-office staff have access to? Furthermore, how is that information communicated throughout your team? Email and text? Phone calls? Fax and snail mail? Cup and string?
Let’s dive a little deeper and take a look at how scattered data makes your team slow, inefficient, and prone to error.
Back Office
Bookkeepers shouldn’t be chasing wild geese. Hunting down coworkers to get the information they need to correct invoices, complete payroll, and record costs is a waste of time. And, it’s easy to blame sloppy front-office staff and technicians for the mistakes and oversights that they have to deal with. However, sloppiness is not the root cause of the problem. Instead, consider the inevitability of data getting mismanaged or lost by the front office and technicians when there are so many systems in place to store and communicate it. That means more time spent chasing the data, and less time spent billing the customer.
Front Office
The front-office team, typically responsible for scheduling, customer service, and quoting, is the biggest victim of scattered data. Accounting systems are either unable or are poorly equipped to help them manage customer service data. In that vacuum, they implement a patchwork of paperwork, software, and processes to accomplish their goals. The resulting hodgepodge slows everyone down and is prone to error. Here’s what I mean
Q.) What did we do last time we were at that location?
A.) Let me dig up the file. I can’t read the tech’s handwriting, so I’ll send him back out.
Q.) What was the problem with my equipment and when can I expect a quote to fix it?
A.) Someone else takes care of quotes. They are on vacation so I’ll have them call you back in a week.
Q.) When is a tech supposed to be on site?
A.) Check the calendar. Oh wait, that calendar is out of date. I don’t know.
Q.) Can you get that file for me?
A.) No, the server is down.
Technicians
Skilled labor is the most expensive and coveted resource for service contractors. Technician downtime and missed opportunities can be attributed to disorganization and miscommunication of customer service data most of the time. The ball gets dropped somewhere in the multitude of channels used to tell techs where they need to go, when they need to be there, and what they need to do. When the work is done, the information about what was discovered or completed is slow to travel back to the office, if at all and is often unintelligible. That means more communication with the tech to find out what happened and more wasted time.
All of our customers thought that double-data entry was their biggest problem when they first approached ServiceTrade. A couple months after implementation, they gained visibility to the underside of the gigantic iceberg that was slowing down their business. However, after 6 months of using ServiceTrade, that iceberg turned into an ice cube when they were finally able to streamline their customer service data.
Customer Interfaces: Comparing Apples and Blackberrys
Just over ten years ago, Apple announced the iPhone. Blackberry was the smartphone king with a great keyboard and wheel/ball for email power users. Now Apple is the most valuable company in the world, and Blackberry is out of the smartphone market. More applications and a better user interface won the day by a landslide. How would your customers grade the applications you provide and your user interface? Apple? Or Blackberry?
Think about it. Maybe you used to trade in labor rates and parts. Today you trade in information and convenience. Pressure readings, amperage readings, inspection intervals, flow rates – the information you manage is your stock in trade. What type of user interface are you providing your customer for them to value your stock? Phone calls and ad hoc emails with files attached? Uh, can you say “worse than Blackberry.” What will happen when your competitor shows the customer an iPhone? Oh, right. We already know how that movie ends.
Maybe now would be a good time to figure out a strategy for giving your customer more applications and a better user interface. Maybe your website should be something other than a billboard on a screen. Maybe the customer should have access to the information that you collect regarding their equipment through applications that help them make decisions regarding the maintenance and repair of that equipment. Don’t wait for the competitor to introduce the customer to iPhone. In fewer than 10 years they will be the most valuable company in your market and you will be out of business.
One final pro tip – this is not an accounting problem, so don’t bother asking your accounting application provider to solve it with a “customer service module.” Instead, look for built-in customer engagement features like an online customer portal and service history reports from providers who are evolving like Apple did over the past ten years that will help keep you at the front of your market.
Want to be the winner in your market? Be the first to innovate.
These words of wisdom were imparted by Reese Bobby to his son Ricky Bobby in the movie Talladega Nights: The Ballad of Ricky Bobby (clip and clip). Winners get more than their fair share, and a loser is just a loser. No one cares about second place. In our fast-moving world, the winners often take all of the profit, and the losers are just losers.
Ten years ago last week, Blackberry was the world’s number one smartphone. It had a keyboard that was awesome. Apple introduced the iPhone with its innovative user interface, and ten years later Apple is the most valuable company in the world. Apple takes over 100% of the profits in the smartphone market, and Blackberry does not even make smartphones any longer. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
Ten years ago, Blockbuster was number one in the video rental market. Today, Netflix is number one with a market value of over $57 billion. They introduced an innovative user interface for renting movies over the Internet, and Blockbuster went out of business. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
Ten years ago, taxi companies were protected, regulated operators in the local markets they served. They proudly paid huge sums of money for their operating medallions. Today, Uber is an enterprise worth over $80 billion – more than all of the taxi companies in the world combined. They introduced an innovative user interface for hailing a car and paying for the ride, and the taxi companies have been decimated in their local, protected markets. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
How good is your user interface to the customer? Is it still phone calls and triplicate forms? Is it ad-hoc emails with files attached? No organization or intelligence, just a dump of PDF files? What happens to your business if you are not the first in your market to introduce an innovative interface for customers to receive your services? Are you going to be first or last when the change comes to your market? Will you be the winner that takes a bigger share? Or a loser who is just a loser?
Maybe it is time to start thinking about technology as a way to please your customers instead of simply a way to seek operating cost leverage. The lesson of Apple, Netflix, and Uber is also the lesson of Blackberry, Blockbuster, and the taxi companies. It does not matter how long you have been around or how good your internal operations may be. An innovator in your market can turn your business into a loser. So, are you going to be first in your market to innovate with a better customer interface? Or will you just become one of the losers when someone else innovates first?
If you ask equipment manufacturers (metal benders), they will claim that your customers are technically their customers. What’s changing now is that they want to have their customers pay them for maintenance and repair services instead of you.
I am, of course, speaking about how manufacturers are increasingly embracing the service business as the next leg of profit to be mined in the market. The days of distribution channel loyalty are gone. Prepare to do battle with the well capitalized companies that you used to call “partners.” Where is the evidence that the drums of a channel war are beating? Consider these two recent news stories:
GE just spent almost a billion dollars to buy a software company that specializes in technology for service delivery. The price tag for that purchase was an estimated 15-times ServiceMax’s current revenue. GE REALLY WANTED THIS TECHNOLOGY to pay that kind of price. Note that ServiceMax is built on top of Salesforce’s CRM platform, NOT AN ACCOUNTING APPLICATION. GE’s aggressive activity in the market says that customer service and sales are the new battlegrounds for manufacturer competitiveness. They want to control the entire customer experience from initial consideration of their equipment through the maintenance and repair cycle and then finally the upgrade and replacement at end of life. ServiceMax helps them deliver on this promise with great efficiency and customer visibility.
GE was in the news again because Boeing has hired a GE exec from the GE Aircraft Engine business to run the Boeing Commercial Airplane Group (CAG). Kevin McAllister was selected as the new CEO of Boeing CAG because he specializes in monetizing “after the sale” services for maintenance and repair. At GE, they sold a program to the airlines that delivered jet engine maintenance and repair for a fixed fee based upon the number of hours on the engines. That program was just what the airline operators wanted – a no hassle, no risk, fixed cost plan sold by an expert in jet engine technology. Now, Kevin is heading to Boeing to concentrate on the same type of program for commercial aircraft.
So why are the manufacturers so interested in service these days? Because lifetime value of the customer is everything, and service is easier than ever to deliver because of technology. Historically, service was hard because it was unpredictable, and it was not possible to be everywhere the customer needed you to be at one time. Now, with advanced instrumentation and the Internet, the manufacturers can “see” what is happening in order to better manage a service delivery plan. Also, customers have come to understand that the company responsible for service needs to be the one with all of the data required to do the service right, and it really doesn’t matter who employs the technician that shows up to turn the wrenches so long as the owners of the data give him good instructions. Manufacturers can build an enduring ownership bond with the customer throughout the product lifecycle to earn a premium on their stock value. Check out chapter 5 in my book, The Digital Wrap, about how Tesla has become the envy of the manufacturing world because of this dynamic.
So what are you going to do when the metal benders come after your customers? Are you just going to hand over the relationship and the data so that you can become the labor bureau and the truck depot for their profit machine? Or are you going to seek more data and more technology so that you can become the trusted advisor to the customer? The advisor that informs them of the failure modes of each type of equipment and teaches them how to negotiate with the manufacturers at arm’s length to get the best equipment deal? The advisor that implements the best customer service technology and sells the best program for hassle-free and risk-free maintenance and repairs?
The great news about the metal benders is that they are still metal benders, and they would struggle to spell customer service if you gave it to them in an anagram. It will take some time for software applications and technology to overcome their metal bender cultural habits. The bad news is that they have LOTS of capital, and while they are “figuring it out,” it may still cost you lots of pain and profits if you don’t have a better program.
Here are my tips for preparing to win the battle for customer loyalty:
Focus on technology for customer service and sales, NOT OPTIMIZATION OF YOUR ACCOUNTING FUNCTION! Your perfect back office process is perfectly irrelevant to a customer looking to eliminate risk and hassles. Stop looking to the accounting application providers to solve your customer service and sales challenges.
Systematically collect customer connections. Every interaction with a customer should result in an email address and a mobile phone number. These can be used to connect the customer with the information you generate to demonstrate your value.
Innovate in programs for service management. These innovations can be data collection and mining for predictive service, warranties you sell to those that enter your premium maintenance tier, system monitoring services, fixed price payment plans, or whatever application of technology and business process to limit risk and hassle for both you and the equipment owner.
Diversify your expertise across as many manufacturers and brands as you can credibly support. You want to be in the position of the trusted advisor to the customer, and knowledge is power in this position. You also want to have credible data and experiences to back up your representations to the customer.
Stop concerning yourself with parts margin and instead focus on total margin per applied labor hour. Parts are not going to be in short supply, but skilled labor will be precious. Lower your inventory carrying costs by setting up fast response partnerships and technology connections to the best parts suppliers. Focus on speed and proactive service with the customer, not parts margin.
Begin experimenting with non-proprietary, independent monitoring and controls solutions that you can apply across equipment brands. Use these to build data that leads to credible recommendations and solutions for the customer.
This cultural shift to an information-based service approach with lots of online connections to your customers and their equipment will place you in a position to be the valuable brand that the customer trusts with their important equipment purchases and maintenance programs. The manufacturers are guaranteed to show up with proprietary solutions because of their metal bender culture. If you are prepared, you can laugh all the way to the bank as they throw money at a problem that you have already solved.
In The Digital Wrap Book, Chapter 14 was titled the Digital Wrap Formula for Maximizing the Value of Your Business. The chapter covered the technical, financial calculus that can be used to determine the amount a financial buyer might pay for a service contracting business (read the related blog post). It also offered a good deal of advice regarding how an owner might maximize that value by lowering sales costs for new customers, demonstrating consistent revenue growth, expanding margins, and retaining customers. While all of the math and advice in the chapter is accurate, I have come up with a simplified slogan for focusing company value building efforts. How Many, How Much, How Long.
How Many refers to the number of customers your company has. A customer is not a location where you do work, but instead it is an entity that pays an invoice. How many unique invoice payers does your business have? How easy is it to add new ones? If the answer to these questions is “a few” (whether big or small) or “difficult,” then the value of your business is marginal. Having only a few customers, even big ones, is risky. More is better. Having an undefined sales process is also risky. If you do not know how to add new customers systematically, growth is a crap shoot. If you have a lot of customers and you can demonstrate how you reliably add more every year, your business will command a premium from a potential buyer.
How Much refers to the amount you can reasonably expect to be paid every year by each of your customers. If you can do more for them and if they pay you a premium relative to the market because you provide a unique experience, better outcomes, or great customer service, your business will command a premium from a buyer. If there is a great deal of uncertainty regarding how much each customer pays annually, a buyer is going to demand a risk premium from you and the value of your business will be marginal.
How Long refers to the number of years the typical customer stays with your company. Churn in the customer base is a bad thing, and your business value will be marginal if you have a lot of churn. Do you know how long the typical customer stays with you? Do you measure churn every quarter to see how well your customer service activities are being received? Ideally, your business has less than ten-percent gross churn (the number of clients that you serviced last year during the current quarter compared to the number serviced this year) and zero or negative net churn (the amount of revenue achieved from customers that you serviced last year in the current quarter that also received service this year). If your net churn is zero or negative, it means that you are becoming more valuable to your customers as a whole each year even as you lose some of them. It means you are raising prices and expanding your portfolio of services consumed by your customers.
How is your business doing on the How Many, How Much, How Long scale? Are you tracking these metrics every quarter? Are you putting programs in place that make it easier to sell your services, allow you to charge a premium, and make it hard for the customer to let you go? If not, why not? These programs will make your business more valuable when the time comes to move it along to the next owner and spend more time on the boat.
Make your Business more Valuable by Being more Valuable to your Customers
Billy Marshall often speaks to industry association groups on topics that help service companies be more valuable, successful, productive and more important to their customers. This past May, he spoke in Indianapolis to fire protection companies about The Digital Wrap.
What is Billy talking about? Watch the video to see!
This 15-minute recording is crash course on what a digital wrap is, and how it helps commercial service contracting companies become more important to their customers – and in turn – increase the value of their business.
Billy uses funny and interesting stories to relate how service companies should:
