Posts Tagged ‘Economic Impact of Services’

Cisco: The Impact of Services on Product Revenues

November 10, 2008

Last week a TPSA member made me aware of a webcast delivered to Cisco shareholders and available on the Cisco web site by visiting:

The investor webcast of interest is titled:Revolutionizing Customer Intimacy. In this webcast, Nick Earle, SVP of Services from Cisco overviews Cisco’s updated services strategy. The eye catching statistic provided in the presentation is related to the influence of service activity on product pull. Cisco states the following fact:

Every $1 of solution architecting services purchased by a customer results in $4 of advanced services that drive $7 of Cisco product sales.
Customers that do not purchase architecting services purchase an average of $3 of Cisco product.

The graphical version of this statement is our image for this entry:

Impact of Services on Product Revenues

Cisco: Impact of Services on Product Revenues

This type of data gets professional services folks very excited. It is exactly the type of evidence that service organizations are always searching for to demonstrate the economic impact of services on product success.



The Impact of Services on Product Success

September 11, 2008

Embedded professional service organizations have always struggled with their ability to define the total positive impact they have on company fortunes. For example, how much of the product’s sales were pulled through by professional service engagements? How many frustrated customers were saved by PS involvement? How many new products only succeeded because PS secured the first reference account?

Wouldn’t it be great if every service organization could draw a correlation graph like the one below that shows how increasing service engagement increases account profitability?


Economic Impact Analysis

Economic Impact Analysis




TPSA classifies this dialogue under the concept of economic impact analysis: The process service organizations use to calculate the impact of service activities on total company economic success. Unfortunately, I believe the task of calculating economic impact to be one of the most immature disciplines in the TPS industry.