Reason #4: With our field service management software, you can scale your business without scaling your overhead.
When I speak with industrial field service companies for the first time, I always ask: where do you see yourself in three to five years?
Most of the time, these companies expect that they’ll be bigger – in terms of employees, locations, revenue, and profit.
While most companies aspire to grow, the fact is, not everyone will be able to do so successfully. The pie might not be growing enough for everyone to have a significantly bigger piece three to five years from now.
Why do some companies grow more than others? I can address this question by telling you about two industrial field service companies I know.
The first company has $80 million in annual revenue. It’s well-run and respected, but when you look under the hood, there’s a glaring issue that will limit how well this company can grow. To administer their $80 million in revenue, they have a billing department with 10 employees – or $8 million per employee. These staff members spend their time rekeying information into the system and preparing invoices. Assuming each person makes $50,000 per year, it costs $500,000 to bill $80 million.
The second company is a VistaVu client running FieldVu, the field service management software solution we developed for industrial field service companies. This company does $150 million in annual revenue. Because they run their operations, finances, billing and everything else with FieldVu, they can bill $150 million per year with just one staff person. Data comes in from the field electronically, so there’s no rekeying, and invoices are created automatically.
Headwind or Tailwind?
Both companies want to grow. If the first company grows, however, they’ll have to grow their overhead proportionally. For every $8 million in additional annual revenue, they’ll need to hire a staff person. The second company can easily add millions of dollars in revenue and their overhead billing costs will stay the same.
The first company is dealing with a $450,000 headwind in the form of unnecessary overhead. The second company has a powerful tail-wind helping them and is in a better position to grow and do so profitably.
Today, many of VistaVu’s industrial field service customers are in oil and gas. Prices are still somewhat depressed and they need to squeeze full value out of every dollar.
They know they need to get more out of the people who make the money – their operations and field crews. They need to spend less on the people who count the money – administrative and billing staff.