Changes in the Field: New Service Contracts and Predictive Maintenance Explained by Experts

At the 2024 Field Service Forum, industry leaders gathered to share their thoughts on what’s driving this shift. Panelists Roger Durham (VP Aftermarket Europe, Norican Group), Jörn Lindstaedt (VP Global Customer Service, Rolls-Royce Solutions), and Edward Storan, (Global Service Director, Domino Printing Services) alongside moderator Kris Oldland (Editor in Chief, Field Service News, Copperberg), explored a range of critical topics—from the role of predictive maintenance to the cultural changes FSOs need to adapt and thrive in this evolving environment. The discussion was packed with insights that every FSO should take to its teams. 

Is predictive maintenance the new standard?

Predictive maintenance is quite often considered the be-all and end-all solution in the field service sector. It makes sense why—every FSO wants to be able to predict equipment failures and fix them before they snowball into costly downtime.

However, Edward Storan, Global Service Director at Domino Printing Services, opened the discussion with a strong statement: not every customer is ready—or willing—to jump into predictive maintenance. “It’s a horses-for-courses” and not a staircase you have to climb to the top, he explained.

For industries like power generation, where the stakes are sky-high, customers are eager to spend substantial resources to keep their machines running smoothly. As Roger Durham, VP of Aftermarket Europe at Norican Group, also added: “If those machines go down, their entire business is hurting.”

Of course, not every industry works that way. For less critical equipment, where downtime is not as catastrophic, the desire to invest in predictive maintenance simply isn’t there. Customers might choose reactive or scheduled maintenance over predictive models because, for them, the investment does not add up or make sense.

Moving away from break-fix models: what’s the right path?

Predictive maintenance has been gaining traction with FSOs for some time now, but should everyone move away from traditional break-fix models? Kris Oldland remarked that “We always see these step models or roadmaps, like you have to go from break-fix to planned maintenance and then predictive.” But in reality, the transition is not always linear, and each step must be carefully evaluated. “Setting up a predictive maintenance contract with all the guarantees is not cheap,” Durham added, making it clear that FSOs cannot rush into these models without laying the groundwork.

Instead, the panelists agreed that FSOs need to build their service offerings one step at a time, adjusting as they go based on what’s achievable today and what can be improved tomorrow. Jumping straight into 15-year, full-scope service agreements without a solid foundation could leave companies stuck—and frustrated—for years to come.

Can FSOs be both cost centers and profit drivers?

One of the key topics addressed by the panelists was the cost versus revenue conundrum. Should service organizations be run as cost centers or profit centers? Are they meant to cut costs or drive revenue?

Storan laid it out simply: “You’re kind of both.” FSOs are in a unique position where they must find ways to generate revenue while also delivering exceptional service efficiently. However, it is not an easy feat to achieve the much-desired balance between cost and revenue.

Jörn Lindstaedt, VP of Global Customer Service at Rolls-Royce Solutions, pointed to the aviation industry as an example, where outcome-based contracts like power-by-the-hour are standard. “70-80% of contracts in aviation are outcome-based,” Lindstaedt explained. Predictive maintenance enables airlines to plan for labor and parts in advance. Yet, as Lindstaedt highlighted, it’s a balancing act—when customers pay only when they need support, FSOs risk being underprepared for urgent service needs.

The workforce is changing: are FSOs ready?

Millennials and Gen Z are demanding flexible working hours—and they are also changing how companies treat their field service teams. Younger generations of workers value work-life balance over financial gain, which is challenging the industry’s traditional reliance on long hours and overtime to get the job done.

Experts don’t expect the future workforce to fit into the same mold. As Lindstaedt explained: “The old-school technicians would work overtime, earning more than their managers. But today’s generation? They want balance.”

This generational change forces FSOs to rethink roles and responsibilities. Storan provided a valuable perspective for the future in this regard: “The field service role is evolving. Technicians will become more consultative, building relationships rather than just fixing problems.” FSOs need the right technology in place for this to happen. Reducing the number of on-site visits and performing them only for complex issues requires solutions for remote diagnosis and resolution. Overall, remote assistance is a solution that appeals to younger workers more than the alternative.

Breaking down silos: why collaboration is the key to success

Sales and service teams have been operating in silos for too long. It’s no longer sustainable in today’s market. Customers expect more than mere transactions and they are willing to invest in long-term relationships with their service providers. It’s up to sales and service teams to work together to make sure those relationships thrive.

If sales teams can see how service contracts drive revenue and increase long-term profitability, they will be more motivated to sell them. But collaboration goes beyond sales. As Lindstaedt pointed out, every department—from engineering to finance—needs to be part of the customer experience. “We invite everyone to hear the voice of the customer, not just customer-facing units,” he said, noting that bringing these departments into the loop helps break down barriers and align everyone toward delivering the best service possible.

What do customers want: quick fixes or long-term agreements?

One of the most interesting questions from the audience during the panel was about the future customer: Will they prefer quick, ad-hoc solutions, or will they commit to long-term service agreements?

Durham explained that it all comes down to how critical the equipment is to the customer’s business. For less critical machines, customers may opt for fast, reactive fixes. But when it comes to mission-critical equipment, they are far more likely to invest in long-term service agreements that reduce risk and keep operations running smoothly.

“It’s all about risk,” Storan added. Customers are willing to pay more for outcome-based agreements when the risk of failure is high. But when the stakes are lower, they might prefer to handle repairs as they arise.

Key insights to take home

• Predictive maintenance comes in different sizes: Customers in critical industries, like power generation, are eager to adopt predictive maintenance. But for less critical industries, reactive models may still be suitable.
• A gradual transition is best: Jumping straight into outcome-based contracts without laying a strong foundation can backfire. FSOs should build their service models in stages.
• Service organizations are both cost and profit centers: FSOs must balance efficiency with revenue generation, providing services that make money while keeping operational costs low.
• The workforce wants flexibility: Younger workers prioritize work-life balance. FSOs will need to evolve field service roles to be more consultative and remote-friendly.
• Collaboration is essential: Sales and service teams need to work together to create long-term customer relationships and demonstrate the value of service contracts.
• Customer needs depend on risk: For critical machinery, customers will seek long-term agreements to mitigate risk. For less important equipment, they’ll likely prefer ad-hoc fixes.

As the field service sector continues to change, FSOs need to adapt—by embracing predictive maintenance where it makes sense, restructuring roles to meet the expectations of the modern workforce, and building bridges between departments that used to operate in silos.