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The Key to Servitization is Effective Collaboration
Posted on May 5th, 2009 3 commentsCompanies who are considering Servitization or Services Transformation as part of a key growth strategy have a lot of different aspects to consider depending on how they wish to tackle this challenge but one area in particular is worth looking at in some detail – i.e. their internal communication or collaboration.
Services is about people and it is a well known fact that businesses which depend on people and people skills will perform much better when there is an effective system of communication in place. Introducing change in an organisation which already has effective internal collaboration is also a much easier task and the companies who have been most successful at introducing and growing services have excelled in this aspect.
From portfolio planning and development through to sales/marketing and delivery, services touches almost all parts of an organisation supported by the key administrative business functions such as HR & Finance. Having an effective system of communication and collaboration in place will facilitate an ongoing evolution in the development of the services business and ensure that all participating functions within the organisation are engaged and have more visibility of each others contribution & impact on the business.
Capturing customer “pain points” and feeding these into the portfolio roadmap, understanding the value proposition, pricing and quantifiable impact of a service are all examples of elements which cannot be handled in isolation within a specific function in an organisation, but which should be worked in collaboration, maximizing the pockets of subject-matter expertise available within the company, and providing cross-visibility at all stages which increases the overall services competency of the business.
Some businesses still rely on the traditional email for internal communication of this nature but the benefits of using more context-based tools such as dedicated business portals, Wikis, Blogs, Discussion Forums, online Chatrooms etc are proving worthwhile especially for services businesses where staff are often located remotely or spread across multiple different geographic locations.
Services is all about people and facilitating effective people-communication will help create a more effective services business.
John
3 responses to “The Key to Servitization is Effective Collaboration”
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Mark Tobin May 11th, 2009 at 19:57
Hi, My name is Mark Tobin and I am a product Manager with an IT equipment supply company. I am in the process of investigating business expansion opportunities in the area of IT services for our custoners coupled with our product offerings. Doing a Web search I happened upon your site, which is very impressive. In an effort to ease my load do you happen to have a template for a services business, business case. Thanks.
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Mark, thanks for your comment. Services Business Cases for product-related services is an area where there has been much debate in the past. One of the key questions to ask yourself is which services are pre-requisites to doing business in the specific IT space you are working in and which services would require a standalone business case as they would be discretionary services which may or may not be required by all customers.
Having led a services line of business within a product-focused company in the past I once made the mistake of assuming that each service needed to be developed as a separate package incorporating business case, tools, value proposition, pricing, delivery methodology, marketing collateral etc etc. What I found in fact was that those services which were essential for the product i.e. installation, configuration, warranty and basic hardware & software maintenance had to be included in the overall product business case as they would never be standalone services which would be de-coupled from the product ( unless you were planning on offering them on other vendor’s products but this is another story entirely ).
On the other hand for what we might call Value Added Services i.e. services which offer real incremental value to the client in terms of Opex savings, Capex savings or even revenue growth there is a requirement to look at the market size, build the appropriate business cases and a full package around the service in terms of value prop, pricing, customer presentations, brochures etc etc.
Every company will have it’s own method of defining business cases especially the financial aspects. These can differ depending on how overhead costs are calculated and applied to each service, how NPV is calculated, inflation factor etc. Drop me a note to john@servitizer.com and I will be glad to discuss further with you on this.
John
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Mark Tobin May 13th, 2009 at 15:03
John, thanks for your response. I accept the fact that a basic set of services are required to be bundled with product sales, specifically those you note i.e. installation, configuration, warranty and basic hardware & software maintenance. In fact these services are already provided by my organisation, included in the basic product costs and in on-going maintenance contracts.
My interest lies in the area of value added services, which some of my customers have requested and which do not fall into the product services category. The opportunities can be considered as revenue growth opportunities both for my customers and my organisation. I will contact you directly to discuss this further.
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