On Monday, the TSIA research team huddled to debrief on key themese we heard at TSW Santa Clara last week. The TSIA research team made the following observations from TSIA membership discussions:
1. The Impact of Market Trends on Service Models: At the conference, TSIA described how market trends such as cloud computing, utility computing, mobility computing, and social media are all combining to create significant disruption in current service business models. Members are looking for more examples of how companies are navigating these disruptions. Specifically, in the areas of new financial models, new service offerings, and new organizational structures.
2. Rev Gen Responsibilities: Embedded service organizations have always been responsible for helping to attach their services during the product sale. Support organizations have always been responsible to helping to renew support contracts. However, service organizations are now being called upon to manage the renewal of product subscriptions. In fact, some services organizations are finding themselves responsible for managing the total account spend for customers after the initial contract is signed. This shift in responsibilities is forcing services organizations to pursue and implement new best practices related to driving account renewal and growth.
3. Services IP Capture 2.0: With baby boomers beginning their great exodus from the workforce, service organizations are more anxious than ever to capture the expertise of these exiting knowledge workers. In addition, there is a renewed push within professional service organizations to capture and organize engagement assets in more effective ways. Interestingly, support service organizations that pursue “knowledge centered support” tactics are providing some of the best in class examples of how to capture and repurpose knowledge.
4. Educating Education Services: The Education Services community continues to expand at TSIA conferences. One theme that emerged from this community was the challenge of creating education offerings that are intertwined with professional service offerings to create an overall offering that drives successful product adoption. Another theme was related to changing delivery formats. For example, Citrix Online was demonstrating a product that captured interactive problem solving customer sessions. One member commented that these sessions could be repurposed as education modules. This shift from standard five day, onsite training sessions to short, consumable and on demand videos could have a dramatic impact on education service business models.
5. The SMB Paradox: Small and medium sized service organizations often have urgent and basic questions regarding service optimization.
- “What kinds of questions should we put on our CSAT survey?”
- “How should we deliver our CSAT survey?”
- “What are the advantages of skills based routing in support services?”
- “How do professional service organizations calculate utilization rates?”
At the same time, thanks to cloud computing, SMB service organizations are gaining access to the same sophisticated tools that larger service organizations have. This leads to a paradox in some SMB service organizations where the impact of state of the art technology is being handicapped by the lack of maturity of internal processes in many instances.
6. Getting Chatty: Support Services organizations are aggressively implementing infrastructure to support chat—already a popular consumer channel– as a support mechanism for enterprise customers.
7. Managed Services Matters: Managed Services continues to be a growing portion of the services portfolio for many TSIA members. There is a growing desire to begin benchmarking both the practices and results related to this distinct service line. What are typical margins for managed service contracts? What are typical contract terms?
8. Refreshing Business Model Definitions: TSIA benchmarks the financial business models of individual service lines. With changes in the industry, specific service lines are interested in revisiting the business model line item definitions used by TSIA to better align with common industry practices in how costs are allocated.
As always, the rate of change never seems to slow down in the world of technology services.
The good news: the majority of these key threads are already on the radar screen on the TSIA research staff. Check out the TSIA 2011 research agenda to see the inventory of the surveys and reports the TSIA research is executing for the calendar year.
The bad news: the amount of transformation that is likely to be required to the strategy, structure, and skills of technology service businesses seems almost overwhelming at this point in time. If you are not already reshaping your services business but simply optimizing your current models, you are likely optimizing yourself right out of relevancy.