Service Performance Insight

Transcription

1 Accelerate Service Productivity & Profit Service Productization The Next Wave in Services Innovation Copyright 2012, LLC Jeanne Urich Managing Director October 25, 2012 Presented by: Steve Bittner VP of PS Unanet Copyright All Rights Reserved. Not for Distribution.

2 Service Productization Why? What is a Productized Service? Benefits? How to Productize Services Service Product Examples Benchmark results Lessons Learned Unanet case study 2 Copyright 2012.

3 Service Productization: The Next Wave of Innovation WHY PRODUCTIZE SERVICES? 3 Copyright 2012.

4 Changing Industry Dynamics Intensify PS Pressure Global Competition PSO Revenue & Profit Sophisticated Procurement Practices Increased Project Complexity Rapidly Changing Technology Environment 4 Copyright 2012.

5 PSOs Experience Pressure from Many Constituents Sales and Client Demands Finance & Operations Directives PSO Revenue & Profit Career Path, Work / Life Balance PS Resource Requirements 5 Copyright 2012.

6 Clients Demand More! Value is the new favorite word of client execs Shorter, faster projects PS firms response: productize service portfolios Done right, productized services can open up exciting new revenue and profit streams 6 Copyright 2012.

7 Market Challenges Driving Service Productizing Challenge Survey Average Embedded PSO PSO Service Differentiation and Improve Sales Effectiveness Pressure to Accelerate Project Time to Value Market and Service Portfolio expansion Drive Innovation Client Demand For More Tangible Service Offers Commoditization of Your Services Pressure to Provide Packaged Cloud Services Copyright 2012.

8 Service Productization: The Next Wave of Innovation WHAT IS A PRODUCTIZED SERVICE? 8 Copyright 2012.

9 By Definition ser vice pro duc ti za tion [noun] the process of delineating, building, deploying, and enhancing a clearly defined service process to achieve operational improvements in support of an organization s strategic objectives ser vice life cy cle man age ment [noun] the process of managing the entire lifecycle of a portfolio of service products from conception, through definition and development, to enhancement and retirement 9 Copyright 2012.

10 Productized Services Defined A pre-defined and clear offering or deliverable Consistent knowledge and skills required to deliver the service Uses a consistent standard methodology Supporting tools and templates Quantifiable costs and demonstrable value 10 Copyright 2012.

11 Service Productization: The Next Wave of Innovation BENEFITS OF SERVICE PRODUCTIZING 11 Copyright 2012.

12 Why Productize? Clearly defines client pain, business value and deliverables Makes services more tangible Tight scope/assumptions - easier to create estimates and proposals Improves consistency, repeatability and quality Reduces delivery cost, time and risk Ability to use less-experienced resources Improves revenue recognition 12 Copyright 2012.

13 Desired Results from Packaged Service Offerings Desired Result Easier to sell, position and expand service revenue with a complete service portfolio Survey Embedded PSO PSO Clients understand business value shortened sales cycle Improved revenue and profit from predictable costs, resources, time and deliverables Improved ability to propose, estimate and manage fixed/time price bids More projects delivered on-time, on-budget with reduced risk and improved consistency Enhanced intellectual property value around methods, tools, and processes Ability to sell into new markets Clear policies, roles, blueprints, templates and tools accelerate new-hire ramping Copyright 2012.

14 Service Productization: The Next Wave of Innovation HOW TO PRODUCTIZE SERVICES 14 Copyright 2012.

15 O p p o r t u n i t y C a t a l y s t S e r v i c e P r o d u c t P r o p o s a l P l a n & S p e c i f i c a t i o n B e t a S e r v i c e R e l e a s e G e n e r a l l y A v a i l a b l e S e r v i c e E n h a n c e m e n t C a l e n d a r SLM3 - s Proven Methodology SLM3 METHODOLOGY I N N O V A T E D E F I N E D E V E L O P PROJECT SERVICES MANAGEMENT STRATEGY L A U N C H O P T I M I Z E PORTFOLIO CHANGE MANAGEMENT PORTFOLIO CHANGE MANAGEMENT Copyright 2012.

16 SLM3 Roadmap PHASES INNOVATE DEFINE DEVELOP LAUNCH OPTIMIZE Request Service Product Create Project Plan Develop Service Product Conduct Pilot Program Analyze Field Performance Assess Service Product Alignment Create Service Specification Establish Go-to-Market Plan Conduct Training Analyze Marketing Performance ACTIVITIES Perform Service Product Strategic Planning Create Internal Launch Plan Develop Marketing Materials Launch Service Offering Evaluate Market Reaction Propose Service Product Approve Service Product Definition Conduct Market Validation & QA Track Feedback & Results Plan for Next Release Develop Training Materials Close Development Project Approve Launch FOUNDATION PROJECT MANAGEMENT CHANGE MANAGEMENT PORTFOLIO MANAGEMENT Copyright 2012.

17 Service Productization: The Next Wave of Innovation SERVICE PRODUCT EXAMPLES 17 Copyright 2012.

18 Service Product Portfolio Example Industries Automotive Consumer Goods Financial Services Life Sciences Service Lines ERP Human Management Product Lifecycle Management Business Intelligence Service Offerings Business Strategy Operational Excellence PLM Solutions Technical Services Analytics Service Products Big ROI Implementation 90-Day PLM Quick Start 18 Copyright 2012.

19 Achieve Breakthrough Results in 90 Days! Our 90-Day PLM Quick Start delivers speed to production Rapid implementation methodology Get Ready Get Set Go! Training sessions and hands-on workshops included Proven approach with over 150 delighted clients SPEED ROI QUALITY Best practices embedded in solution Includes easy to use best practice guides Flexible, user-defined processes support future changes ADOPTION Usability ease of use incorporated in approach Stakeholder involvement accelerates adoption Rapid transfer of ownership to business drives ROI Copyright 2012.

20 Best Practice Productized Service Packaging What does a productized service look like to a delivery professional? Contents Instructions Delivery Guides Tools Templates Practices, methods, processes Links to supporting systems FAQs Best practice examples Requirements Content for each service product reinforces engagement framework Easy to navigate Easy to consume 20 Copyright 2012.

21 Service Productization: The Next Wave of Innovation SERVICE LIFECYCLE MANAGEMENT MATURITY MODEL BENCHMARK RESULTS 21 Copyright 2012.

22 Return on Investment Service Lifecycle Management Maturity Model Level 5 Maturity Level 1 Ad Hoc Opportunistic Level 2 Piloted Pockets of excellence Level 3 Deployed Basics in place for all key elements Level 4 Institutionalized In organization s DNA Optimized Visionary, agile, innovative with continuous improvement Leadership No service portfolio plan or investment Service portfolio strategy & plan emerges Strategic service portfolio plan Exec sponsorship Service portfolio management operationalized Service portfolio drives market expansion Client Relationships Tactical Reactive Instinctive Campaign-driven point solutions Programmatic, comprehensive solutions Strategic, global brand, quantified value Industry-leading, innovative, trusted advisors Human Alignment Jack of all trades Heroic Borrowed rotational resources Dedicated, skilled service portfolio team Strategic Visionary Thought-leading portfolio management Service Execution Manual Inconsistent Standard methodology & tools Global, consistent methods, tools, standards Automated service lifecycle management Advanced service lifecycle systems, tools Finance & Operations No plan, budget, systems or metrics Budget, metrics, controls introduced Automated budget, metrics, controls Streamlined Real-time Self-service Real-time analysis & insight Service Lifecycle Management Maturity Copyright 2012.

23 Service Productization Maturity 102 PSOs 46 Embedded, 56 Independent 415 PS employees with $83M in PS revenues Institutionalized Optimized Initiated Heroic 60% Ad-hoc, Opportunistic Piloted Functional Excellence 15% Experimental, Pilot Stages Deployed Project Excellence 10% Basics in Place for all Key Elements Portfolio Excellence 10% In Company s DNA / Fabric Collaborative 5% Visionary, Agile Innovative, Continuous Renewal & Improvement Level 1 Level 2 Level 3 Level 4 Level 5 23 Copyright 2012.

24 Service Lifecycle Management - Maturity Matters! Service Packaging Focus Level 1 Initiated Level 2 Piloted Level 3 Deployed Level 4 Institution Level 5 Optimized Initiation of Service Portfolio packaging (years) % service revenue from productized services 21% 33% 22% 45% 61% # of new services launched in the past year Months from idea to service launch FTEs performing Service Packaging A defined service packaging process and discipline exists (1 to 5 scale) % of "reference-able" clients 69% 70% 74% 88% 88% % of revenue from New Clients 27% 31% 33% 37% 41% 24 Copyright 2012.

25 Service Lifecycle Management - Maturity Matters! Service Execution Level 1 Initiated Level 2 Piloted Level 3 Deployed Level 4 Institution Level 5 Optimized Project Management Methodology Service Productizing Methodology Knowledge Management Processes, Systems Service Product Training & Roll-out Quality Management Average Project Duration (Man-Months) Projects Delivered On-Time 67% 77% 83% 86% 95% 25 Copyright 2012.

26 The Effect of Service Productization Maturity on Service Delivery Consistency Initiated Level 1 Piloted Level 2 Deployed Level 3 Institution Level 4 Optimized Level 5 Ad hoc / one-off services 36% 16% 28% 25% 18% Standard methodology / ad hoc delivery Standard methodology / standard delivery 30% 41% 40% 20% 19% 34% 43% 32% 55% 63% 26 Copyright 2012.

27 Service Productization: The Next Wave of Innovation LESSONS LEARNED AND RECOMMENDATIONS 27 Copyright 2012.

28 Service Productization Prerequisites 28 Copyright 2012.

29 Service Productization Failure Points Innovate Define Develop Launch Optimize Misunderstood or not enough client pain No market sizing or business case No competitive differentiation No overall plan or portfolio Service Product One-offs No business plan and/or executive support Unrealistic expectations both revenue and cost No committed resources No Service Productizing blueprints, methods, tools or competency Without committed resources, service productizing takes too long, costs too much No repeatable methods, tools, IP or plan for re-use Not enough field feedback around use cases No Sales, Marketing or Launch plan no internal buy-in Not enough time or resources committed to training No Beta or reference customers No method for capturing client and field feedback No methods or tools for improvement Poor field and client reception missed revenue commitments No metrics or measurements tied to compensation 29 Copyright 2012.

30 Service Lifecycle Management - Maturity Matters! Show me the money! Level 1 Initiated Level 2 Piloted Level 3 Deployed Level 4 Institution Level 5 Optimized Total Professional Services Revenue (M) $66 $74 $158 $17 $226 Service Packaging Spend as a % of Service Revenue 1.7% 1.6% 2.1% 2.0% 1.5% Gross Margin from Packaged Services 32.8% 38.7% 36.4% 39.5% 49.3% Annual Revenue per Billable Consultant (k) $151 $253 $236 $277 $275 Annual Revenue per Employee (k) $122 $188 $198 $239 $254 Average Revenue per Project (k) $139 $142 $199 $306 $189 Percent of Annual Revenue Target Achieved 90% 97% 99% 110% 98% Percent of Annual Margin Target Achieved 84% 94% 91% 102% 103% EBITDA % 8.8% 14.7% 16.6% 23.3% 26.1% 30 Copyright 2012.

31 s Point of View Industry dynamics are driving service productization Adopting a well-coordinated service productization initiative delivers significant strategic benefits Integrated business applications and a consistent service lifecycle management framework are fundamental prerequisites 31 Copyright 2012.

32 Thank you for attending! Special webinar attendee $100 discount on the Service Lifecycle Management Maturity Model Benchmark offers a 2 day Service Lifecycle Management course! 32 Copyright 2012.

33 Service Productization How a PSA Tool Can Help Innovate Misunderstood or not enough client pain No market sizing or business case No competitive differentiation No overall plan or portfolio Service Product One-offs Define No business plan and/or executive support Unrealistic expectations both revenue and cost No committed resources No Service Productizing blueprints, methods, tools or competency Develop Without committed resources, service productizing takes too long, costs too much No repeatable methods, tools, IP or plan for re-use Not enough field feedback around use cases Launch No Sales, Marketing or Launch plan no internal buy-in Not enough time or resources committed to training No Beta or reference customers Optimize No method for capturing client and field feedback No methods or tools for improvement Poor field and client reception missed revenue commitments No metrics or measurements tied to compensation 33 Copyright 2012.

34 Service Productization Analyze Historical Projects Actual cost of historical project Evaluate similar projects for costs and duration 34 Copyright 2012.

35 Service Productization Analyze Historical Projects Actual cost of historical project Evaluate similar projects for costs and duration 35 Copyright 2012.

36 Service Productization Analyze Historical Projects Evaluate similar projects for costs and duration 36 Copyright 2012.

37 Service Productization Define Service Product Service Package estimated costs based on historical projects Templatized Delivery Plan for Service Product 37 Copyright 2012.

38 Service Productization Locate Qualified Resources Locate appropriate resources. 38 Copyright 2012.

39 Service Productization Track Performance Actual costs versus Service Package estimated costs Track performance of actual costs Against Service Package template. 39 Copyright 2012.

40 Service Productization - How a PSA Tool Can Help Innovate Define Develop Launch/Execute Optimize Benefits of a PSA Tool Analyze historical data for cost variances, resource needs for both labor and other direct costs. Analyze historical data for variability in project durations. Create project templates including WBS elements. Locate optimal resources for project staffing. Track actuals against template for ongoing refinement. Adjust service package scope, cost, resources to better serve market. 40 Copyright 2012.

41 Accelerate Service Productivity & Profit Unanet Optimizes Your work Thank you for attending! Copyright 2012.