servicepath Becomes First Company Accepted Into Techplace
Burlington’s innovation hub offers office space to high potential companies.
Burlington, ON, June 23, 2017 – servicePath will be the first company to take up residence at TechPlace when it moves into one of the five offices available to new and growing technology companies. The early acceptance of servicePath will set the tone for the type of high energy and big potential companies TechPlace hopes to attract to the space.
servicePath helps us set the bar high at TechPlace,” said Claire Green, Manager of TechPlace. “The company’s unique SAAS solution, backed by an experienced and successful leadership team, shows immense potential for growth, so it’s important we support them by providing space to get settled, and immediate access to resources and programming. This is a very exciting milestone for TechPlace, and we look forward to welcoming more companies very soon.
With operations and customers on four continents servicePath will locate their new Headquarters and team at TechPlace with plans to double by the end of the year. At that time, the company plans to locate to a larger facility nearby.
servicePath’s unique technology platform addresses the challenges specific to technology and IT service providers, enabling increased market adaptability, business agility and service differentiation. TechPlace will provide a base camp for their operations and access to resources and programming, relationships and mentorship, through a growing partnership network.
Daniel Kube, CEO of servicePath, spoke about why the company has selected Burlington from amongst a list of choices. “The Toronto Hamilton corridor offers a great skill and talent pool to grow a high tech company. We selected the region for great educational institutions and its centralized North American location that allows us to service both coasts and our US and Canadian customers. TechPlace is close to GO transit and 30 minutes to the airport, making it attractive for employees, customers and stakeholders to get to.”
Please direct all media inquiries to Claire Green at Claire@techplace.ca.
About servicePath CPQ and SLM:
ServicePath focuses on helping organizations automate the sales process and reduce the time to quote for complex services through their unique “Configure, Price, Quote (CPQ)” capability. The company’s Service Lifecycle Management (SLM) is its key market differentiation, extending beyond CPQ to enable organizations to truly understand their cost of service, and manage the renewal of subscription-based revenue thereby reducing revenue leakages, which ultimately drive revenue assurance and growth.
Supported and led by the Burlington Economic Development Corporation, TechPlace is a one stop destination for new and growing technology companies. With the support of partners from across the public and private sectors, it is dedicated to connecting, developing, and advancing entrepreneurs at all stages. This means providing access to space and resources that are fundamental to growing a business in today’s technology-driven marketplace.
TechPlace also has a limited number of “launch pad” offices that are available to eligible companies. These offices are available on six-month terms for a subsidized rate, and include office furniture, Wi-Fi, and access to mentorship and resources. There is an application and selection process for these spaces. High potential companies that might be a good fit are invited to inquire at email@example.com.
Top Hybrid IT Service Provider Integrates servicePath SLM to Support Global Growth
LONDON – March 21, 2017 – servicePath today announced that Ensono™, a leading hybrid IT services provider, selected servicePath to support the company’s growth strategy into European and North American markets. Ensono enhances its ability to deliver complex hybrid managed services by leveraging servicePath’s Services Lifecycle Management (SLM) and Configure, Price, Quote (CPQ) solutions for advanced sales automation.
“We pride ourselves on being a partner to our clients, and we work to ensure the client experience is a positive and seamless one,” said Tim Beerman, CTO of Ensono. “We chose servicePath because their knowledge, expertise and robust technology platform in the managed service provider space helps us to achieve a high level of service for our clients.”
The integration of servicePath into Ensono’s sales platform enables the company to streamline the sales process in a variety of ways. The servicePath SLM and CPQ platform provide a central location for sales teams to source information on Ensono’s diverse set of hybrid IT services, from mainframe to cloud. In addition, servicePath simplifies the quote process, resulting in faster proposals while delivering configured and personalised IT solutions and services to the end client. servicePath also supports Ensono’s expansion into new and existing markets through a unified global sales workflow.
“We started in the service provider domain and are dedicated to helping our clients truly understand their cost of service, build and manage complex IT services, and automate the sales and solution design process,” said Mike Molson of servicePath. “Ensono’s complex breadth of hybrid IT services are a perfect fit for the advanced modeling and selling capabilities of the servicePath platform, and will enable Ensono to deliver efficiencies across the full service lifecycle from cost to contract.”
servicePath’s unique technology platform addresses the challenges specific to technology and IT service providers, enabling increased market adaptability, business agility and service differentiation. Ensono works with servicePath on a global level, empowering the organization to manage the most complex client portfolios around the world.
For more information about servicePath solutions visit www.servicepath.co
About servicePath CPQ and SLM
servicePath provides a “Configure, Price, Quote (CPQ)” capability to help organizations automate the sales process and reduce the time to quote for complex services. Furthermore, servicePath’s Service Lifecycle Management (SLM) is its key market differentiation, extending beyond CPQ to enable organizations to truly understand their cost of service, and manage the renewal of subscription -based revenue thereby reducing revenue leakages, which ultimately drive revenue assurance and growth.
servicePath’s modular B2B + SaaS software platform streamlines the process to design, cost, price, and quote for complex products and services for the IT managed services industry. The platform is provided in two editions. CPQ is designed for organizations looking to centralize their product information and enhance sales performance. SLM builds on CPQ providing enhanced management of costs and the ability to build and maintain complex solutions through a visual interface.
For business leaders managing lots of complexity or disrupting the status quo, Ensono delivers complete Hybrid IT solutions and governance, from cloud to mainframe, tailored to each client’s journey. Whether you’re leveraging the power of the cloud or modernizing legacy technologies, you’ll be on track to operate for today and optimize for tomorrow. Some of the world’s most successful companies rely on us to help them be great at what they do. We’ve been recognized in Gartner Magic Quadrants for Data Center Outsourcing in North America, Cloud Managed Hosting in Europe as well as acknowledged by the Uptime Institute for 100% availability. We have over 1,000 associates across North America and Europe and are headquartered in greater Chicago, IL. Visit us at www.ensono.com
ServicePath provides Configure Price Quote and Services Lifecycle Management solutions for Technology and Managed Service Providers that are fast and easy to deploy and address the constant change and dynamic nature of technology firms. servicePath was founded by an experienced team of telecommunications and managed IT services industry professionals who recognized the lack of systems and tools to support the complex nature of costing, pricing, governance and selling IT solutions. servicePath based in London with offices in Toronto, Dubai, and the Asia. servicePath has customers around the world and understands the challenges of global technology firms. Visit us at www.servicepath.co
Building Configured Products
With a couple years under our belt, we have enough scars and lessons learned to put forth a list of things to consider when building a configured product. Whilst reading is great, we would prefer to show you in a demonstration, but please read on.
Consider the End User
Building a configured product is about making someone else’s life a little easier…
Guide the User
Consider the flow of the journey you are taking the user on and put yourself in their shoes. Most importantly remember that they will not have the same level of expertise (hence you are using a configuration tool to help them). Use Information messages, sales guidance and business rules to inform the user on the choices they have and the impact of those choices.
We wrote an earlier blog on this, but it is pretty clear that too much choice confuses people. Limit choice to the most expected options. If requests come in for options that are not included, they are easy to add in servicePath with some drag and drop.
Allow for No Choice
Perhaps this should be part of the point above, but consider the customer may not want the choice that is made. It is best to use a Label Item to define that a specific configuration has not been requested. See next point.
Tell the Customer What they Didn’t Buy
In some instances it is important to tell the Customer what they did not purchase as what they did. Consider when a customer does not request backup, then the server dies, then they say “well, it doesn’t say you are not backing the server up”. In those situations it is better to use Quote Syntax to say “No Backup Selected”… this also leaves opportunity for an upsell in the future.
Signal Versus Noise
Not all configuration information needs to be communicated to the customer. Too much information will take focus away from the more important configuration items within the service. For example, if a customer purchases a physical server, is it important to mention that it includes a rack mounting kit… probably not.
Less Free Text
Free text offers the most flexibility, but also allows for the most variance and possibility for user error. If you know a defined set of options then use a choice group. This will make the users life easier and result in a more consistent output that will make service delivery much happier.
The following are general guidance around configuration:
It is really important to have a pre-selected set of choices that is a sellable, deliverable and profitable configured product. Starting with a product that doesn’t work puts more effort on the end user building the quote and creates more opportunity for error. EXECUTION: On running the configuration wizard, will the product be sellable, deliverable and profitable.
Generic to Specific
People have a tendency to think from more general aspects of a service to the most specific - configurators should do the same. Why? Generic choices may impact deeper and more specific choices through the configuration journey. Consider the example of a virtual server where you would want to know the type of operating system (general) before defining what applications (Specific) will be available. e.g. Linux server will allow for NGINX web server.
Configuration Doesn’t Happen in One Direction
It is easier to think of a configuration journey in one direction, but that is not really practical. When building a configurator, consider the user may jump around and making choices in a non-linear fashion. Our rules must therefore account for this - the best way is to ensure we have the alternate condition (ELSE IF) accounted for.
Don’t be Over-prescriptive
The rules engine in servicePath is quite powerful and we found in the beginning to implement the most concrete and prescriptive rules we could, cause we could. This was wrong - sales does not work this way. We should guide the user, but also depend on the expertise in the business to make some of the right choices.
The Technical Stuff
Maximise Screen Real-Estate
With our Section Groups you can have multiple configuration groups on a single screen. This will allow you to present more choices to the user at one time providing a clearer picture of the journey they are on.
Without a doubt, the first configured product that you build can be optimised by removing options/choices and changing the journey you take the user on. After you build your first configured product, use the preview configurator function and demonstrate it - we are very confident that peer will offer quite few ways to improve the speed by minimising mouse clicks.
Bite Size Business Rules
Whilst you could build larger business rules, why manage the complexity. As we use event-driven business rules, rules can be smaller, more readable, easier to explain and train others to manage.
With multiple product managers working on configured products it is important to have a set of standards that are agreed by all. These may include:
- Group structure
- Label item naming
- Quote Syntax
- Use of information messages
- Naming of business rules
Building Your First Configured Product
We have worked hard to define a standard methodology to help you build and maintain configured products:
Know the items you need in the configuration journey - items like vCPU, Memory. Storage, Operating Systems, Applications, Monitoring, Management, etc.
Define a rational structure that will guide the user through the configuration journey - groups like Resources, OS and Applications, Additional Services. Add your items.
Map out your logic, but always start with the default configuration. What is visible, recommended, required and what options require quantity to be enabled.
The rules will drive the logic to ensure a working configuration - generic to specific should be a guiding principle here… and keep rules small and bite-sized.
Probably the most important part. Information messages, group descriptions and product tags ensure there is well rounded information to the User and the Customer.
We have lots more where this came from - reach out and we can show you some working examples on our demonstration environment.
Business Rules Engine
With our 2015-JUNE release of the servicePath CPQ platform we have introduced a new Business Rules engine. This was developed with a number of specific objectives:
- Support the powerful functionality of the existing rules engine, but do it in a simpler way.
- Build an experience for the business user, not a developer. Not more steps, just forms and drag-and-drop
- Use examples from the previous 18 months to find patterns that shape how the new engine would work
- Strive to deliver a 3-5X efficiency improvement in the development and management of rules
We are very proud and excited to release the new rules engine that has met these objectives. The engine is more intuitive, easy to use and significantly less effort to build and manage rules.
Fundamentally, the big change is a move away from “rule steps” to “rule sections” that are reusable elements within the Business Rule. Sections really encapsulate and represent what would have taken multiple steps in the previous engine. To the User this reduces the need to know how a rule should be structured and rather depend on Rule Sections to define the structure for them.
The new sections can be selected by the user as needed:
- Get Properties
- Declare Variables
- Call Calculators
- Call Sub-Rule
- Execute Logic
- Run Action
In our analysis of example rules, we found some patterns that were repeated over and over. We took those and build a common set of “actions” that would make the action considerably simpler to implement:
- Show groups or items based when a user makes a choice
- Hide groups or items based when a user makes a choice
- Set the quantity of an item or multiple items based on information
- Set the properties for groups or items, selected item or all items in a group - this is the swiss arm knife
The example below will set the quantity for all database "products" in the "Database Server" group to the value of the processor
We also found more Users doing mathematically calculations within rules - calculate backup capacity, determine the number of licesnes, update the cost by a % due to complex configuration, etc. We have now merged our Calculator capability with the rules engine. You can build calculators as simply as writing an Excel formal, but then directly call a Calculator from within a rule. There are endless possibilities with this functionality.
Lastly, we found that many rules were common to one another. The new implementation allows you to clone a Business Rule and make your minor adjustments. This is a massive time-saver.
For existing clients we have already contacted you as we need to migrate to the new rules approach. This change required all existing rules to be refreshed and this is on servicePath to do for you.
We encourage everyone to check out the new knowledge base articles on Business Rules.
If you would like to see some real world examples, please call us and we can show you a number of examples on demo.servicepath.co/spa
On a recent run listening to a podcast the topic of "choice paralysis" came up as a well known situation where offering too much choice can lead to less sales, not more.
This may seem counter intuitive, but there a number of studies in the retail/supermarket industry where sales tripled when choice was reduced by 60%. Although IT services is a different beast it appears there are some valuable lessons we can learn and apply to our CPQ environments...
Logically Group Products
Segment different products (and choices) into logical groups where the products make sense together, but also use this as a tool to limit the choices available in each group/step.
Generic to Specific Choices
With CPQ, early choices will have an impact on future choices. Building your configuration to address the more generic options can allow for downstream choices to be limited. For example, the "location" of a service may define different supported configurations. Determine the location to limit other configuration choices early in the cycle before they perplex the user.
Three is the Magic Number
We think three choices within a configurator group makes it inherently easier to pin down a decision. We can't point you to any science on this topic - more of an observation and personal perspective.
Lead the Buyer with Recommendations
In a well-built configuration moving from generic to specific choices, it is imperative to lead the buyer with "filtered" choices and recommendations - based on the context of previous choice.
Remove Choices that are not Suitable/Sellable
If it doesn't make sense, or wouldn't be applicable based on previous experience or typical patterns - then take that choice out, it will only lead to paralysis.
Monitor Common Configuration Patterns
As an industry we spend too much time engineering for the edge cases. Build for the typical customer and monitor for configuration patterns (collections of choices) that drive optimization.
So the question begs… what does this mean to me or my customer?
It really comes down to a few items that will improve the relationship with that prospect or customer.
- Reduce Time to Quote
- Simplify the Decision-making Process
- Improve Ability to Articulate/Understand the Value of a Choice
- Delivery a more Predictable Experience (Known Configurations
If you are not sure where to start – we have a library of configurable products for data centre, network services, professional services, cloud, etc. Our team would love to run you through a demonstration and draw out our best practice points above.
If you have an example of a configured product/service, this is even better as we love challenges. Reach out and throw the gauntlet down for us to build your example in the servicePath platform.
Moving to a Subscription-revenue Business
Another update from servicePath UK on the rapidly and continually changing economies of IT and Telecom market, specifically affecting VAR/Resellers.
From the disruption of Cloud to the consumerisation of IT, the business models (VAR, Reseller) of the last few decades are not as effective to meet customers business needs and therefore become a less sustainable business to be in.
Businesses are less interested in just procuring hardware, software or professional services from their suppliers piecemeal. They are looking to consume services that meet their requirements, reduce the capital expenditure, and have the ability to scale up and down with changes in their industries. Importantly, they are not afraid of moving from their existing suppliers to make this leap. If you are “just a VAR” your relationship may not be a solid as you think.
There is a growing trend in the industry to add more subscription and annuity revenue in what is being coined the Subscription Economy. With this trend, are you prepared to for the transformation of revenue model and business structure? Do you have the right expertise to execute this transformation? How are you going to ensure success?
What does this mean for VAR's Wanting to Make the Change
First and foremost, this means a transition of your revenue model and this impacts virtually every function within your business, financial reporting, operations, service management, sales approach, toolsets and cashflow. Some companies are able to make the leap very quickly (www.cnet.com/uk/news/adobe-kills-creative-suite-goes-subscription-only/) but it is likely that you and your existing customers will want to do this over a period of time.
This is a complex endeavor, but we think there are three focus areas to drive a successful result:
1. Revenue Model
- Evaluate your target market to establish the products and services you wish to offer to market. As you have an existing customer base, then you have a rich vein of information of which to take advantage of. Identify new revenue streams to compliment and extend from existing ones
Develop your subscription/annuity offerings
- Ensure the new offerings compliment your core business and can drive pull-through revenue
- It is not about the “project”, it is now about the service lifecycle: strategy, design, deploy, operation, decommission…. Your teams need to shine at every stage
- Invest in the platforms, PSA, RMM, Cloud, Storage, IP Voice that support your teams in delivering these new services
- Look to automate as much as possible to deliver the right and most consistent service and to protect your margins.
- If you don’t have the capability in-house or financial backing to make the right investments, then look to what label existing services, the channel and marketplace for this is thriving from datacenter, co-lo through cloud to integrated voice services.
- Define the collateral, price points and processes to support your activities
- Continually invest in your products and services, some research on MSPs and found the best-in-class companies invested twice as much in new services compared with the average MSP.
2. Business Structure
- This is absolutely critical. Ensure they correct incentive structure is in place to put the right focus on the new services your are launching. Don’t just incentivise the initial deal, the growth of the relationship needs to be incentivised. If you don’t, your team will continue to sell what they know (and are incentised to)
- Create a separate business unit which will be responsible for the end to end (Marketing, Selling, Delivery, Operations and Billing) of your Managed (“annuity”) Services.
- Map the end-to-end service lifecycle for the customer from first-touch through to contract renewal. Ensure your teams know where the “hand offs” are to ensure customers don’t fall into those chasms.
In order to cultivate long-term customer relationships that generate recurring, predictable revenue and profit you will need to continually invest in your people. In the short term, you may need external expertise with knowledge of service management, business models, structures and transformation approaches.
- There will be a significant investment in re-skilling existing staff and it is more likely that you will need to bring in new Sales, Delivery and Operational headcount that has experience in the MSP marketplace.
- Longer sales cycle, be able to articulate the value of your offerings to solve your customers business requirements
- Deliver ongoing services and not just outcomes or logistics
In summary any change is a big step but if you go about it in a considered, timely manner and take your customers on the journey with you then a more profitable, sustainable business with deeper customer relationships awaits.
Good Luck on your journey.
Cost…Configure, Price, Quote (C-CPQ)
In our last insight from Iain Logan, our UK MD, we explored the importance of cost to serve (CTS) and the value this information can bring to a service provider. There was a really important point he made that we wanted to build on in this quote:
"You are continually making one-time and ongoing decisions across your investments/products and customer lifecycles to ensure you are getting the right returns."
In this insight, we wanted to extend from cost and further into the commercial lifecycle - Configure, Price and Quote (CPQ). We believe including cost is an absolute must, as CPQ on its own does not provide a complete picture to the salesperson or the business.
What does CPQ do?
Firstly, let’s remind ourselves of what CPQ does at its core:
- Guides the user to make the correct configuration recommendations to the customer
- Ensures only configurations that can be delivered and supported are proposed
- Manages the pricing of the services to simplify the process for the sales person
- Support activities like discounting through the sales process, perhaps automated with a workflow
- Generates a quote or proposal to help secure the business (Hopefully this is detailed, personalised and consistent)
Obviously, CPQ is great to get a configured, personalised quote out to the customer; however, without cost we are driving without all our senses (or perhaps a petrol gauge).
Without cost information sales, management and leadership don’t have the complete picture to make effective decisions on margin, cost recovery, cashflow and risk.
Now, this may be okay if you are selling a widget or private virtual server, but what about a data suite or complex infrastructure solution. The business could be massively exposed, but no one knows about it….
With the Complete Picture - What’s possible?
Imagine, with this cost information how much broader your decision making process would be:
- Solution-level price, cost and margin visibility - Management now has a choice on how to structure a commercial offering
- Flexibility to discount offering with largest margin to increase likelihood of win
- Clearly understand where your direct and indirect cost liabilities sit
- Understand the impact on outgoing costs to support revenue acquisition – cashflow
The screenshot below is an example of the most basic information we think is important for making effective commercial decisions:
In summary, in the MSP industry, we never seem to have enough time or enough data to make effective decisions to increase our win rate. We do think that combining cost information into your commercial lifecycle will have a massive impact on your deal flow, your bottom line and success in our increasingly competitive market.
CPQ is great, but don’t forget about C-CPQ.
The Squeezed Middle
The Squeezed Middle
You need real time intelligence to make fact-based decisions.
In a market place where the lines between consumer and enterprise products are becoming increasingly blurred the pressure on price points for Service Providers is only increasing. As long as customers are being fair in the evaluation of the functionality and especially security features then any decision they make comparing your price points are to be expected. Therefore you had better know and manage your cost of service or before long your organisation will become another member of the squeezed middle.
Why Cost To Serve (CTS)
As a business you make significant investment in your assets, platforms, people and your suppliers/partnerships. You are continually making one-time and ongoing decisions across your investments/products and customer lifecycles to ensure you are getting the right returns.
- Should you build or buy a service
- Capacity Management and tracking
- Optimum product mix
- Sales Plans and Channels to Market
- Mapping supply to expected demand
Identifying the customers, products and suppliers that add value to the bottom line is critical to attaining and maintaining a growth trajectory.
Before You Start
Need to be clear that creating and maintaining a CTS approach to your business is not to be taken lightly. You need to involve the right people in the business from Finance, Operations and Product Management.
Ensure you communicate the reasons why and remove any negativity (e.g. we have enough information already, things change to much to model realistically) as you will need to create a robust structured approach to the data capture and modeling.
Identify cost owners that are responsible, but also have the authority to define what the costs are
Management assumptions are a critical part of the process. Agree what you can at the outset, but also have a mechanism in place to make decisions quickly when they are required.
Define the precision you require from your CTS and that level of precision should be ubiquitous across your portfolio of services. If different levels of precision are implemented, the downstream decisions (e.g. discounting to a margin level) will not be consistent.
There are various methods each with their own pros and cons and level of resources and commitment to them.
- Traditional (Activity Based Costing) - http://en.wikipedia.org/wiki/Activity-based_costing
- Transactional (Rate Based) - http://www.mbaskool.com/business-concepts/operations-logistics-supply-chain-terms/2462-transaction-based-costing.html
- Time Based http://www.productcosting.com/time_driven_abc.htm
Also this is not a one-off adhoc process and needs to become a managed, repeatable process on a frequency required by your business. With the rate of change in the MSP world, you should expect this to be every 6 months and no longer than a year.
Building a CTS
You need to take an architectural approach and find an affordable, balanced effort to reward approach that is robust, maintainable, adaptable and reusable.
- Define how you will model costs in a unified way across the business
- Agree the level of precision you wish to achieve – this is the ratio of data to assumptions
- Capture existing data/information from ERP/Supply chain/CRM
- Define a location, structure and model for capturing the costs in a unified way – centralization is paramount
- Establish clear Units of Measure (UOM) for your costs (e.g. kW, person-hour, Gbps, etc)
- Document and agree any assumptions:
- Depreciation period for asset types
- Direct versus in-direct costs
- Variable versus fixed costs
- Cost recovery strategy
- Manpower baselines for service lifecycle
- Have an eye on the future to think about what is scalable, can be reused, is a building blocks for other
- Define and understand the cost items needed to derive the Cost to Serve across the portfolio, map to suppliers and cost sources
- Identify the levels/elements that is most directly linked to driving revenue
- Start with the widest reaching cost models (e.g. Data Centres) as they will be the foundation for the rest of the Cost To Serve.
- Build up from the foundation to define the cost model, leveraging the different levels and elements that comprise the service offering
Service Architecture to Cost Architecture
When we build a cost model for a traditional data centre, we following this general approach (of course it is different for each business)
- Manpower costs for bands, roles and resources (fully loaded)
- Connectivity and bandwidth (transit, MPLS, etc)
- Data centre facility and MEP
- Data centre technical area
- Colocation allocation of technical area
- Managed services allocation of technical area
- Cabinets and racks
- Structured cabling for copper and fibre
- Network infrastructure (L2/L3)
- Operational systems through to monitoring probes
The diagram below provides a simple example of costing a basic colocation service. We start with the data centre and work our way up to the service, but at every level we have a clear line of sight to our costs and how the contribute to the service value and in turn, revenue.
So if you are serious about growing your business the right way then you should be setting about creating, utilising and benefiting from a CTS model.
Follow us by here Insights for more insights with the “C-CPQ – The Evolution of CPQ” coming next week. In the meantime let us know in the comments of your CTS experiences (positive or otherwise).
Change of Name, But Not a Change of Vision
We are one company and one platform.... servicePath.
- Invoice names for solutionEngine will be replaced with servicePath
- Over the coming 2-3 months all knowledge base articles will be revised to reference servicePath rather than solutionEngine
Managing the inevitability of change
There is something that is constant in our existence as service providers - that is change. Economic changes, evolving customer demands and the rapid rate of technology innovation require service providers to stay current and relevant. Although we all aim to maintain a strategic approach, we are continuously tasked with dealing with change and making decisions to address those changes.
Any of these sound familiar?
- General downturn in the economy, increase in interest rates or cost of living
- Acquire a new company and need to consolidate the portfolio of services
- Increasing competition requires redress of pricing and positioning
- Introduction of a new service to capitalise on an opportunity
- Customer requires an increase in availability of their business application
- Change of commercial terms of a customer's service contract due to payment issues
- New application version released for general availability
- Hardware component update and no available stock for previous component
- Changes in Microsoft's SPLA pricing
- Increase in data centre power costs
Some changes are planned (e.g. pricing updates), some can be anticipated (e.g. change in power costs), some are very rare (e.g. acquisition) and some are uncontrollable (e.g. customer insolvency).
Change in Customer Requirement
Take for example a customer that needs to introduce a new business application and is looking to optimise the availability and efficiency of their solution. Ideally, when this transpires we aim collect as much data as possible to make the most informed decision and create the best possible outcome. But...
Where do you go for that information? Where do you find what the customer has purchased, how much it costs, when did the contract for the services, what are our current prices, is there a new discount structure how much has existing product/service changed, or are there new services that could be up-sold to address their new requirement?
We continuously find this information is widely dispersed across spreadsheets, in service management systems, on scanned PDF documents and in employees inboxes. Consider the time it takes to respond to a customer wishing to spend more money with your organisation. More importantly, what is the impact if you get that information wrong - commercially, technically or financially?
Change in Service Configuration
We wanted to share an example from recent discussions with a client. They provide a wide range of technology solutions, but are focused on cloud as the strategic direction of the business. The promise of cloud to their customers is that change can happen quickly; however, the ability to make changes to their cloud offering was anything but. Customers were starting to ask for a 'virtual server' with more horsepower to support more demanding business applications (e.g. SQL Server 2012 Enterprise) that would exceed the capabilities of the existing specification.
The "change" to their virtual server offering would now include a new 8 vCPU configuration to compliment the existing 1, 2 and 4 vCPU options. Sounds simple enough to make some changes to their quote configuration system and get sales selling. Unfortunately, this was not the case. This change required business requirements, developers, UAT, time and cost - none of which where in large supply.
How would you manage this change in your business today? How long would it take for this change to be implemented to get sales selling? What is the cost of lost opportunity?
For this customer it was between 4-6 weeks using a unique developer skill set and between 3-5K GBP per change. Now, multiply that be the number of changes in a given month and it starts to add up.
Managing Change in solutionEngine
Following on from our previous blog, we believe it is important for the power to manage change to be in the hands of the business with as few dependencies as possible. Accepting that change is inevitable we set out to design a platform that could centralise cost, product, pricing, customer, quote, order and solution information - improving visibility to data to make decisions - to ensure measured change can be executed quickly.
We thrive on demonstrating how solutionEngine can address specific issues and help manage the impact of change - if you have an issue that is impacting your business, please reach out - let us give it try using solutionEngine. firstname.lastname@example.org
We Need More Standard Services!!
Many of our clients engage with their customers through custom/bespoke service offerings that are designed, engineered, costed and commercialised on a deal by deal basis. Time is never on the service providers side and rushing introduces more opportunities for error. Obviously, this is not a scalable approach and introduces a significant amount of risk through the quote to cash process.
Many have identified the problem and wish to move to a more standard and modular service model, but at the same time they do not want to lose the flexibility they currently have in designing solutions. We think you can still be standardised and flexible and:
Reduce Operational Risk. Designing a custom solution over a three month sales cycle that you need to support for 36-60 months means you really need to get it right-first-time. We all want to ensure what we have sold can be delivered to the expectations of the customer. Standard services is understood by operations, repeatable and more scalable through tooling and automation.
Maintain Sales Flexibility. Standard does not need to mean fixed. Standard to us at servicePath means modular services that pay a role in delivering solutions through interdependencies and relationships. in combination they provide more value than the sum of their parts with “variability” clearly understood through business rules and logic. We think it is achievable to have a high degree of variability in a portfolio whilst reducing operational risk.
Reduce Administrative Overhead. Without question, every provider wants to remove administrative overhead across their cost to contract process. Reduce the number of service SKU’s, maximise the amount of re-use, ensure more consistency in what/how services are contracted. By doing this we can reduce time-to-quote and time-to-revenue delighting leadership and customers.
With that said, we hope the next question is “great, how do i get started?”. We a
Investigate your portfolio and identify which combinations of products are used together. In turn, establish relationships, dependencies, limitation and constraints. This was a key drive for us to develop “Product Parameters” in the platform.
With common elements identified, you can identify duplication and what is not required. These need to be removed from the portfolio, reducing SKU’s and administrative overhead. For example, do we really need to have
Define Relationships and Supported Variability
Every customer thinks their requirements are unique. Its okay to let them think that but it is not reality. There are always common patterns in service configuration that need to be identified and used as the foundation for a standard service definition.
Establish Configuration Logic + Business Rules
Modular services are like building blocks, but they provide little value without logic to bind them together and business rules to ensure combinations work. Importantly, we need to define the tolerance for variability… To us these are basic products (no variability), bundles (low variability) and configured products (high-variability, but governed configuration).
A portfolio of services is like any other data set. Without attention and care it will get bloated and become a burden. With commonality, de-duplications and clearer understanding of relationships in place we can optimise the portfolio - removing duplicates, refreshing configurations and service packaging.
As per our last word below, it is difficult (read: impossible) to be 100% standard…. hence you need some form of governance. Enable your team to make real-time and informed decisions. Consider that decision should cover commercial, technical and operational dimensions, but your systems must allow for debate and decisio
Aside from what others may say, we don’t think you can completely remove the need to deliver custom solutions for customers. Accept that not all customers are the same, nor should their solutions. Empower your team to engage with customers, know the building blocks and relationships they have to work with and apply their hands-on knowledge to build relevant solutions that address a real business need.
I guess the only question that remains is....what system to you have in place to do this?