SKUs and PS: They do help!

Back in December of 2008, I wrote on the topic of SKUs and PS Offerings. This was a follow on to the theme of Packaging PS Offerings. The specific catalyst was the following question from two TPSA members within the same week:

“Are more PS organizations assigning SKUs to their PS offerings?”

As a reminder, SKUs are “stock keeping unit numbers that provide a unique identifier for each distinct product and service that can be ordered from a supplier.  Once again, there are two clear reasons a PS organization may want to implement assign a SKU to specific service offerings:

1.            Make it easier for sales representatives to attach service offerings to a product sale.

2.            Make it easier to track and analyze information regarding the sales of specific service offerings.

When I wrote the original post, we knew that applying SKUs to PS offerings was an existing practice in the industry. We had not have visibility, however, into how prevalent the practice was. We also did not know if the practice was driving real business benefits for PS organizations when it was followed. Well, now we have a little data to play with.

I take snapshots of these blog polls when the number of responses reaches at least double digits. These online polls are designed to provide some directional data that we may build on at a later date with more rigorous studies. 

The first poll asked participants if they assign SKUs to PS offerings at all. As shown below, 60% of poll respondents report that they do indeed assign SKUs to certain PS offerings. This provides a preliminary indication that assigning SKUs to PS offerings may indeed by the “common practice” among embedded PS firms. But should it be a “recommended practice?”

Assign SKUs to PS Offerings?

Assign SKUs to PS Offerings?

 

Of those that assign SKUs, 77% report business benefits as shown in the graph below. This data provides preliminary indication that assigning SKUs to certain PS offerings should indeed be a recommended practice.

 

Benefits of SKUs

Benefits of SKUs

This leads us to the following flow chart regarding SKUs and PS offerings. I want to thank everyone that has provided input. If you want to add to the data set to help make this analysis even more reflective of industry practices, please feel free to add your votes to the polls.

PS and SKUs

PS and SKUs

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2 Responses to “SKUs and PS: They do help!”

  1. Bob Westerkamp Says:

    Thomas,

    For those that use SKU’s, are they doing so as part of a fixed fee engagment or T&M with fixed deliverables. Also is there a tie to service strategy profile?

    Also there is usually a generic SKU for PS organizations to bill time against – Is it a best practice to eliminate this SKU and drive compliance in using the defined SKU’s?

    Let me knwo what you think.

    Thanks

    Bob

    Bob

  2. Thomas Lah Says:

    Bob:

    Bob:

    Great questions.

    In this poll I did not ask if the SKUs were associated with Fixed or T&M engagements. However, I can tell you I see SKUs more often applied to fixed priced, fixed deliverable offerings. Also, these offerings are typically at a sub $100K price point.

    To your second question, I believe the data would tell us the more specific you can be with the SKU, the more helpful the SKU. Booking everything againsts a generic “PS SKU” will not tell you what offerings/practices/skills are getting the most traction with your customers.

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