On the last day of the recent TSW conference, I summarized the key insights I was taking away from my converesations with attendees over the three days. To watch this presentation, visit:
Below are the insights I cover in the video.
1. Managed Services
- Growing, profitable, but don’t call it Managed Services.
- Limit liability? Org structure? Rev Rec? Comp Models? Financial Model?
2. Margin Box
- Fixation on achieving certain margin targets for embedded service business lines. This means we walk away from customer opportunities because they don’t meet a specific target. We could be boxing ourselves in.
- What matters: Total margin dollars (rev * margin) not margin %
3. Service Controlled R&D
- Service executive is given control of 5% to 15% of the product R&D budget. Focus those resources on capabilities that help customers realize value.
4. Solution Managers
- Not product managers. Not service marketing managers. They are comped on the growth of both product and service revenues.
5. “On site is Insight”
- Quote from Bill McDermott during his keynote. Why he believes service capabilities are so critical for product companies.
6. Success Science
- You understand what makes your best customers your best customers.
- Best customers = spend lots with you because they are being successful
- Do you have a cohesive vision throughout the entire company concerning what makes your best customers your best customers?
7. Place Big Bets
- Ex: Stand up a business consulting capability
- Ex: Stand up a hosted version of your product for a customer
- Ex: Aggressive reskilling program for services (technical to business)
8. Remove the Complexity of Services
- For your customers
- More importantly: for your sales force
- Complexity look like: stove piped service capabilities, overlapping offers, death by a thousand packages
9. Starting up SaaS
- 2 years to profitability
- Amount you spend on sales and marketing impacts time to profitability
- Design of the platform can dramatically impact time to profitability
10. Financial Model of Your Company
- Has to change
- Transition as quick as possible to the best model possible
- New model will not be throwing off 25 to 40 points of profit
11. Disenfranchising your team
- Be savvy about orchestrating change
- You have to bring the company along with you (R&D, Sales, Finance)
- Don’t sacrifice your best people in this process
Tags: Thomas Lah video