Wednesday, June 6, 2012

PlotWatt? Plot What? Plot Everything!

To improve, you must first measure. And measuring is getting easier with cloud computing.

The problem with a lot of software solutions is that the medicine is often more toxic than the disease - implementing and maintaining the system is so ugly that the benefit never emerges.  The best applications are those that provide value without much investment in setup and inputs.  Witness the SaaS revolution and the market value of  And even their software requires quite a bit of “out of band” data entry to begin handing back benefits - but the friction for technology set-up is minimal.

With the cost of hard goods rising every day, and the cost of computing, data collection, and analysis getting lower every day, more and more applications are going to appear that use the power of the ever cheaper computer to lower the start-up barriers to software value.  I think PlotWatt is a great example of one of those new applications.

I met with Luke Fishback, the CEO of PlotWatt the other day, and we share a common mind on many topics regarding how to provide value with cloud computing.  The PlotWatt application uses the nearly free computing cycles and data storage at Amazon AWS to analyze time series data reported by smart power meters.  By watching the data and asking a few questions of the user, the application “learns” the profiles of the appliances that are consuming power.  With further watching and analysis, the user begins receiving intelligence on which appliances are consuming more power than they should.  The application essentially provides a Pareto analysis of opportunity for saving money on your power bills.

So what is special about PlotWatt?  Well, historically the customer would have to wire up every appliance with sensors (or purchase expensive “smart” appliances and building control systems) to measure current and report the information to the application.  Instead, PlotWatt is using computing power and lots of data storage and analysis to eliminate the start up costs and maintenance associated with all of those sensors and proprietary building control systems.  The customer can save capital on appliance deployment (i.e. deploy dumb appliances) and still get the benefit of smart power consumption.  Cloud computing once again replaces capital with an extraordinarily affordable, variable expense approach.

Now, for the really interesting part.  Imagine correlating all of that power consumption time series data with equipment service record time series data.  Yep, you guessed right.  The application can tell you when to call the service guy.  Or it can call the service guy for you.  It can tell you if the service guy did the job right (i.e. better performance/lower power after service).  Or not.  Imagine moving beyond power to gas and water.  The plumber shows up to fix the leaky toilet before you knew it was leaking (and washing your profits down the drain).

If you can see information and data without extraordinary costs (and aggravation) for collecting it, the potential for improvement in facility maintenance costs is amazing.  Stay tuned for lots more info on how the cost of plotting everything is going to go to zero.

Monday, April 30, 2012

The Big Picture - Service Trade Jobs

I just read a very intriguing article on the decline of manufacturing jobs in the US and the current calls by some in Washington to enact special incentives to slow the flow of these jobs to lower cost labor locales.  The author, Gary Becker, professor of economics at the University of Chicago and a Nobel Laureate, references the decline of agricultural workers in the US beginning in the early twentieth century as a mirror, and rightly points out that agricultural subsidies did nothing to stem the decline of workers.  Steve Jobs also pointedly told President Obama at a dinner meeting “Those (manufacturing)  jobs are not coming back.”  This line of thought, along with a poke from Ashley Halligan, a facilities management software analyst, on careers in skilled service trades and facility maintenance, got me thinking about why this field of service trade work is so compelling as a source of good wage jobs. Service trade jobs are not at risk for offshoring (although technology driven productivity might shrink the quantity, as in agriculture), and they are becoming more interesting each day as the information and analysis content of the work increases with the increasing ubiquity of the Internet, mobile devices, and “smart” equipment.

Service trade work - the installation, maintenance, repair, and upfit of facility equipment (lighting, HVAC, refrigeration, cooking equipment, electrical, plumbing, fire safety systems, elevators, etc) - is certainly blue collar work.  Technicians are often in a truck, on a roof, or in a basement or utility room wielding multi-meters, wire cutters, pipe wrenches, duct tape, pressure gauges, screwdrivers and sometimes (when all else fails) a hammer.  The diversity of the environment and the satisfaction that comes from solving problems is actually what makes these jobs gratifying.  And the information and analysis content of these jobs is about to go WAY up - which makes them even more interesting.  And these jobs are not subject to offshoring because you cannot source a refrigeration chiller repair in Chattanooga to a technician in China.

Why are these jobs are going to become more interesting?  Because the information and analysis content is about to increase dramatically.  The cost of information collection, storage, transmission, and processing is getting lower every day.  Camera megapixels are cheaper.  Megabytes of storage are cheaper.  Gigahertz of CPU throughput are cheaper.  Megabits of transmission capacity are cheaper (on most networks, anyway).  Smartphones are cheaper.  And the price of steel, gasoline, and labor gets higher every day.  If facility maintenance is to get cheaper, the savings must come from the analysis of information.  Translation - do smarter maintenance through information technology.

How are we going to do smarter maintenance?  First, all technicians will (ultimately) have smartphones at their disposal - a remarkable breakthrough.  Why is this critical?  Smartphones provide a platform to communicate rich information (voice memos, photos, video) about what is happening on the roof, in the basement and the utility room to anyone else that can benefit from that information in supporting maintenance decisions.  The tech can show what she knows without being held accountable to a low bandwidth written report on a coffee stained piece of paper that may or may not make it back to the office in the course of a week’s work.  Communicating just became fun.

Second, and the other side of the smartphone coin, is that unstructured data (notes, photos, voice memos, videos) is going to surge to the forefront as the productivity driver for service trade work.  Historically, practically all maintenance decision support information (if it existed at all) was highly structured data - text or numerical fields in a relational database.  Structured data is necessary, but far from sufficient.  It is the language of accounting and control - not the language of collaboration and problem solving.  Collaboration and problem solving happens with stories.  As humans, we are wired to learn through stories.  The structured data must support the story, but the story is the breakthrough.  Techs will soon benefit from this capability to communicate and consume stories as part of their work cycle.  Show the customer a video of a piece of equipment that is exhibiting a pending failure mode with the tech narrating the reason for the imminent breakdown along with the steps for remediation, and you will get an informed customer ready to strike a check instead of a skeptic asking for two or more repair bids.

Third, all of these critical facility systems, from food processing to elevators to HVAC equipment to grease traps, are about to become connected - with the ability to transmit key information for maintenance decision support.  What is the temperature in the cooler relative to the amperage of the compressor motor relative to the ambient temperature?  What is the static pressure drop across the filters in the air handler?  What is the fuel consumption of the broiler relative to the temperature relative to the historic norm?  What is the amount of grease in the grease trap relative to the water level and how much sludge is at the bottom?  This information is going to break free of proprietary building control systems and be readily available for analysis by anyone due to the miracle of Internet protocols and low cost sensors.  What the service trade industry needs to decide is who is going to take the lead in configuring, collecting, and analyzing the information?  The last outcome we should seek is that some offshore locale becomes the harbor for the information and its analysis and US service trade labor is relegated to turning the wrench.  I doubt this will happen because the US leads the world in information innovation.

As labor costs rise, it is inevitable that the labor content of any good or service will be displaced either by lower cost labor or technological advances.  It doesn’t matter if it is agriculture, manufacturing, or service trade work.  In the case of service trade work, however, the labor content cannot be delivered from afar - the wrench must turn where the pipe is located.  The goal should be to deliver smarter labor (and less of it) based upon innovations in information that support better decisions.  Smart labor in a connected world sounds like a recipe for good jobs to me.

Thursday, March 8, 2012

What's a Picture Worth?

Apparently a whole bunch if DunnWell's experience is an indicator.

DunnWell got started as a Kitchen Exhaust Cleaning company with a single differentiating factor – digital photos validating work done in the middle of the night inside of a duct system that is difficult to inspect. Now DunnWell is a very large and growing company specializing in a full range of Fire Protection services and serving over 12,000 locations nationwide. And digital photos on ServiceNET remain a key differentiating factor for the company.

We have nearly 3 million photos on ServiceNET for validated work or defects requiring repairs. These work records serve as comfort to a customer that a job was done right (or DunnWell, ha, ha) or that a pending repair is actually necessary or critical. Quotes that have photos attached documenting a problem are approved by the customer at more than twice the rate than those that do not include photo validation.

What would it be worth to your business to double your quote approval rate? How many more repair jobs could you deliver to your technicians? Answer those questions, and you will know what a picture is worth. Bet it is more than a 1,000 words.

Tuesday, February 7, 2012

What is Service Trade Technology?

Since I have claimed time and again that DunnWell is a service trade technology company, I suppose it is time to define the category of service trade technology. It is also important to outline why I, or anyone else for that matter, should care about service trade technology. Why is it a relevant area of endeavor?

Let’s begin with the relevance part. Service trade work concerns the maintenance, repair, and renovation/up-fit of equipment and facilities outside the context of new construction. It is a huge part of the economy. By my estimate (it is nearly impossible to find statistics) and with the aid of the US Department of Labor, Bureau of Labor Statistics Occupational Outlook Handbook, the service trade market in the US represents over $120 billion in annual commerce with over 1,800,000 skilled workers active in these areas. That’s a lot of commerce and a lot of jobs. The productivity of this group matters. One of the best routes to productivity, in my opinion, is Service Trade Technology.

So what is Service Trade Technology? The best way that I can think of to define it is to layout a short statement followed by a longer series of examples to provide context and clarity to the statement. Sort of like the notion of a law (the short statement, in theory) followed by a set of judicial case precedents that further interpret and refine the law. So, here is the short statement:

Service trade technology is information technology that improves the productivity and quality of service trade work through better communication, collaboration, planning, and decision support for both the customer and the vendor.

Recognizing the simplicity and broadness of this statement, let’s work on refining it with some context. These are information technology that would be within the definition:

GPS or Location Based Job/Work Records – Knowing when the technician arrives (or planning the arrival) helps maintain integrity in the billing transaction.

Appointment Confirmation and Status Systems – As above, being able to plan for arrival minimizes dead end runs for the tech. And the customer can be prepared, which also reduces wasteful cycles.

Digital Photography Applied to Validation of Deficiencies or Repairs – Establishing trust through a visual record eliminates the expense of third party validation (second opinions, quality inspectors, etc). Note to vendors – it also drives up quote approvals.

Equipment Monitoring to Optimize Technician Dispatch – Knowing the customer is wasting money on poorly performing equipment (think energy consumption) eases the pain of unplanned technician expense for an ad hoc maintenance dispatch. Or consider technology such as that provided by SepSensor for optimizing grease trap maintenance schedules.

Fleet or Tech Tracking to Manage Dispatch – Minimizing unbillable (or even billable) drive time makes the system more productive overall. Lower overhead for the vendor and more value for the customer.

Equipment/Asset Management to Aid in Repair Decision Support – A complete record of service for a piece of equipment across vendors and trades often lowers the expense of tech diagnostics in the repair cycle.

Likewise, these are information technology that would be outside the definition:

Email – While email is an important capability, it is too broad and too ad hoc to consider outside of the context of a specific application that generates emails to support functions like those above (i.e. notice of a pending job with a confirmation button in the email).

SmartPhones – Like email, outside of the context of an application that specifically drives tech productivity (GPS job clock, or dispatch/route planning for jobs), the smart phone cannot alone be considered as service trade technology.

MultiMeters or Similar Trade Specific Equipment – While certain equipment specific monitoring capabilities could certainly be considered service trade technology (consider the SepSensor example above for grease trap monitoring), trade specific tools used by the technician in the context of equipment repair will not generally be considered as service trade technology.

Historically, many of the applications that have been delivered in this space have focused heavily on helping the facility manager optimize the “soft costs” associated with receiving service trade work. Soft costs are primarily:

Quality Risk – what does it cost if the maintenance or repair is poorly executed?

Administrative Cost – the human capital costs of aggravation associated with inefficient processes for billing, job planning, and service logistics.

Service Management Cost – the human capital costs at the customer for providing expert oversight to assure quality in the workmanship delivered by the service trade vendor.

While I believe that these soft costs are good areas for improvement, overall I think they represent a small piece of the total costs. In contrast to these, hard costs represent what is paid by the customer to the service trade vendor, and these expenses generally break down as:

Labor – the billable time for the technician(s).

Parts – the billable amount for parts consumed in the job.

Overhead – the burden rate for the vendor associated with idle tech cycles, fuel, depreciation of equipment, support staff, facility rent, etc.

Profit – the rate of return above all other costs absorbed by the vendor.

Aiming technology at these hard costs is much more than just working the vendor over with an annual RFP that focuses on labor rates. See my post on fighting inflation. Inflation will ultimately win and quality will lose.

Instead, service trade technology offers the hope of a win-win outcome on hard costs. Since the primary component of these hard costs is labor, a focus on optimizing technician productivity is critical. It is doubly critical because the biggest component of vendor overhead is likely idle technician cycles that are not applied to billable jobs.

The vendor that embraces technology for optimizing technician productivity and quality across its customer base while passing along part of the fruit of that improvement to each customer will capture the biggest customer base for the longest period of time. In my opinion, that is the name of the game in service trade work – cultivate a long standing customer base and harvest it thoughtfully and forever instead of pillaging (or worse, being inept) and getting fired from the account. It’s too expensive to cultivate customers to be thrown out for over harvesting or for lack of thoughtfulness relative to a competitor who works harder to help the customer optimize their expense budget.

So, what do you think about service trade technology? Have I struck a chord? Or am I missing the boat – or, to keep the agrarian metaphor, the tractor?

Monday, January 16, 2012

Fighting Inflation is a Loser's Bet

While the performance of long term Treasury notes in 2011 seems to indicate not even a whiff of inflation, I will argue that fighting inflation for long term and sustainable savings in service trade delivery is a loser. The prevailing market rate for skilled labor ($/hr), materials ($/lb), and related delivery inputs like fuel ($/gal) will certainly rise. Meanwhile the costs of collecting, transmitting, processing, and analyzing information that might help you lower your consumption quantity for these items is continually in decline. Information is the best bet for lowering your long term service trade costs.

Read more on my blog post at DunnWell.