october 21, 2010 presented on behalf of: bpma presented by: steve hurley managing director solutions...
TRANSCRIPT
October 21, 2010
Presented on behalf of:BPMA
Presented by:Steve HurleyManaging DirectorSolutions Insights
The Productization of Servicesand Solutions
© 2010 Solutions Insights. All Rights Reserved. 2
Today’s Agenda
●Level Setting—Basic Concepts on Solutions
●Key Challenges in Productizing Solutions
●The Changing Role of the Service and Product Managers
●Key Takeaways
© 2010 Solutions Insights. All Rights Reserved. 3
About Solutions Insights
IT & Telecommunications Industry
Other Industries
We help B2B companies develop, market, and sell integrated solutions that deliver increased business value; our main areas of focus are:
● Strategic Integration● Offering Distinction● Customer Connection● Sales Acceleration
Our Clients
© 2010 Solutions Insights. All Rights Reserved. 4
Level Setting—Basic Concepts on
Solutions
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In preparation for this webinar, we’ve recently talked with over a dozen companies.
Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
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Let’s make sure we’re all singing from the same sheet of music…
A solution is a combination of products, services, and intellectual capital, focused on a particular customer problem which drives measurable business value. Source: ITSMA Solutions Council, 2007D
EFIN
ITIO
N
Some of the corporations with senior executive representation on the Council were:
Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
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We hear different words that describe the same process.
Standardized
Replicated
Productized
Packaged
Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
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The Solutions Continuum
Customized
<10%
• Focused solely on solving a unique problem for a specific client
• Lower economies of scale• Significant labor input• Higher risk of hitting the KPIs• Likely to be less profitable• Harder to scale
Standardized• Solutions can be provided to a
number of clients who had the same problem
• Higher economies of scale• Less labor intensive• Lower risk of hitting the KPIs• Likely to be more profitable• Easier to scale• Expensive to implement
Most of the reasons why we want to have productized solutions are obvious…
>90%
Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
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Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
The opportunity to add value to products through services was great.
10% weretransactional
10% wereconsultative
Consultative•Advice focus•Expertise decision•Want meetings
Transactional•Cost focus•Convenience decision•Don’t want to meet
Most customers would pay a little extra for some advice
The Solutions Opportunity
Source: Neil Rackham, presentation at ISBM conference, September, 2010
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Level SettingLevel Setting Challenges The SM/PM Role Key Takeaways
The need for real, consultative-based solutions is greater.
More buytransactionally
The Solutions Opportunity
Consultative•Advice focus•Expertise decision•Want meetings
Transactional•Cost focus•Convenience decision•Don’t want to meet
The middle is going away.
Source: Neil Rackham, presentation at ISBM conference, September, 2010
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Now that you know a little about us, let’s find out about you.
I am primarily responsible for:1. Product development and/or management2. Solutions development and/or management3. Product marketing4. Solutions marketing5. None of the above
Online Survey
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My biggest challenge is:1. Understanding customer wants and needs well enough
to provide them with a solution2. Understanding how to integrate the right components
into a solution package3. Getting the right people inside the organization to
collaborate with me in creating solutions4. Working with external partners5. Developing the right go-to-market strategy for
solutions6. Getting the sales force to shift from product to
solutions selling
Now that you know a little about us, let’s find out about you.
Online Survey
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Group Question
●Do all of the key players in your company have the same definition and perspective of what a solution is, and what productization means?
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Key Challenges
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Here’s where you tell me what you think about productizing solutions…
Level Setting Challenges The SM/PM Role Key Takeaways
• Biggest challenge
• Importance to the business
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During the presentation, please take notes for a future research project./
Potential Areas of Research:● Methodology● Tools● Competencies● Other
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Product Development vs. Solutions Development
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Here is an example of the range of elements that comprise a horizontal solution.
EXAMPLE
Applications
Infrastructure &Security
Business Processes
Consultancy & Enterprise Solutions
Products
RegionalKnowledge
Best total Solution
to specificmarketplace
Industry & ClientKnowledge
Tailo
red
Solu
tionG
en
eri
c S
olu
tion
Service Element1
Service Element2
Service Element3
Service Element4
Service Element5
Service Element6
Delivering customer-centric, bundled offerings targeted at solving business Delivering customer-centric, bundled offerings targeted at solving business issues accompanied by compelling value propositionsissues accompanied by compelling value propositions
Level Setting Challenges The SM/PM Role Key Takeaways
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There are several successful product development models.
Core Differences: Distinctive Offering DevelopmentCore Differences: Distinctive Offering Development
Two Examples of the Product Development ProcessTwo Examples of the Product Development Process
Stage-Gate Process
The PACE Development Model
Scrum/Agile Model
Discovery 1 Scoping 2 Business Case 3 Develop-
ment 4 Testing & Validation 5 Launch 6
Level Setting Challenges The SM/PM Role Key Takeaways
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Solutions involve more stakeholders and resources.
Core Differences: Distinctive Offering DevelopmentCore Differences: Distinctive Offering Development
Two Examples of the Product Development ProcessTwo Examples of the Product Development Process
Stage-Gate Process
The PACE Development Model
Scrum/Agile Model
Discovery 1 Scoping 2 Business Case 3 Develop-
ment 4Testing & Validation 5 Launch 6
The Solutions Differences:The Discovery Process:•Needs are identified for single or small customer sets•Addresses a business challenge/problem
The Development Process:•Collaboration across several product and service groups, with the customer, and external partners•Inputs based upon the solutions application
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The Product Manager typically has responsibility for developing a product and getting it to market.
S1 S2 S3 S4
P1
P2
P3
Services
Pro
duct
s
Product &Service Offerings
Example: PM is assigned P1 for development and deployment. It is a stand-alone product offering, or becomes a component of a horizontal solution offering.
A B C D E
1
2
3
4
5
6
Customer Areas/Verticals
Professional
DeliveryModels
SIManaged
Serv
ices
Offerings/Horizontal Solutions
Product Launch
Level Setting Challenges The SM/PM Role Key Takeaways
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Now they are responsible for combining a range of products and services into solutions packages.
Security
Mission Critical
Outsourcing
CRM
SolutionsPackages
Example: SM has to integrate P1, P2, S2, S3, and S4 into an integrated Mission Critical solution.
• Playbooks• Value Propositions• Sales team tools• Business impact scenarios• Success stories• References
S1 S2 S3 S4
P1
P2
P3
Services
Pro
duct
s
Product &Service Offerings
A B C D E
1
2
3
4
5
6
Customer Areas/Verticals
Offerings/Horizontal Solutions
Professional
DeliveryModels
SIManaged
Serv
ices
Level Setting Challenges The SM/PM Role Key Takeaways
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Product & Solutions Development Comparison
Factor Product Development Solutions Development
Focus Improving operational efficiency and/or output
A key business issue or challenge
Offer Components
Often has singular attributes and functionality
Integrates a range of products and services into a new offering
Collaboration Typically developed by a single Business Unit within an organization
Requires several BU’s to collaborate, as well as external partners
Component Management
Relatively easy to document and capture in a knowledge management systems
Span products, methods, systems, and processes, and delivery resources
There are several key differences that make solutions development much harder.
Level Setting Challenges The SM/PM Role Key Takeaways
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We see 3 main steps in the productization process.
Level Setting Challenges The SM/PM Role Key Takeaways
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We have internal and external sources for inputs to our solutions.
Level Setting Challenges The SM/PM Role Key Takeaways
Determining the Components
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Identify New Opportunities:
Cisco’s I-Prize Socializes Innovation
Level Setting Challenges The SM/PM Role Key Takeaways
Determining the Components
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Identifying new opportunities: Innovation Jams at IBM
● Challenge:– Accelerate exploration
of new opportunities
● Solution:– Periodic series of online innovation “jams”
● Program:– Enlist thousands of employees, partners, and customers in
collaborative jam sessions around core themes and ideas
● Results:– Institutional crowdsourcing; internal excitement; dozens of new
investments
Level Setting Challenges The SM/PM Role Key Takeaways
Determining the Components
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Strengthening customer connections:CSC’s WikonnecT
● Challenge:– Deepen relationships
with insurance clients
● Solution:– Private social network
● Program:– Build, market and sustain full-featured,
issues-based online community
● Results:– 11,000 users, 700+ companies– Deep customer insight– Extensive customer collaboration– Increased customer loyalty
Level Setting Challenges The SM/PM Role Key Takeaways
Determining the Components
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No
A solution that was successful once now needs to be vetted for replication.
SolutionOriginatorCompletesSolutions
Capture Form
Solutions Manager reviews;
ensures criteria met
Sourcing BU uses
the solution
Corporate Executive
Board
Solutions Council evaluates for
cross-BU application
Deploy Accept/Reject
Search/Locate
Evaluate
Criteria met
Funding
Solutions are
stored in MS
IP is licensed
Leverage of thesolution is achieved and the productization process has begun
Yes, if resources needed exceed limits
No
No
Yes
Accept
Level Setting Challenges The SM/PM Role Key Takeaways
Selecting the Solutions
No action, or remove from
database
Yes, if resources needed are within limits
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Describe the components.
Solution Capture Form
Solution Name/Type:
Primary Solution Area: Drop down
Other:
Value/Benefit to Customer:
Brief Solution Description:
Solution Elements
For all applicable solution elements, enter a brief description and the associated Business Unit:
Elements Description BU
Products
Services
Systems
Processes
Methodologies
Other
Level Setting Challenges The SM/PM Role Key Takeaways
Selecting the Solutions
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Describe the delivery method and plan.
Indicate the method of delivery for this solution.
Managed Services
Professional Services
System Integration
Does the solution rely on resources/assets supplied by partners?
Partners:
Describe:
Has this solution been bid by other BU’s:
BU’s:
Level Setting Challenges The SM/PM Role Key Takeaways
Selecting the Solutions
© 2010 Solutions Insights. All Rights Reserved. 32
Level Setting Challenges The SM/PM Role Key Takeaways
Selecting the Solutions
Most companies have a collaborating body that makes decisions around solutions offerings.
● Making the case:● 1,2,4…viral● At least 10 buyers● Financial thresholds ● Strategic fit
● Getting buy-in across the organization● Broad representation● Get resources and authority to invest● Surfacing all opportunities and
avoiding redundancies
Solution Solution Engineering Engineering
LeaderLeaderAlliance LeadersAlliance Leaders
Solution Solution Infrastructure Infrastructure
LeaderLeader
Marketing LeaderMarketing Leader
National Solution National Solution LeadersLeaders
Regional Regional Solution Leaders Solution Leaders
Industry SolutionIndustry SolutionTeam LeadersTeam Leaders
RoleRole• Set strategic directionSet strategic direction• Prioritize investment decisionsPrioritize investment decisions• Prioritize branding & marketing Prioritize branding & marketing
initiativesinitiatives• Operational consistencyOperational consistency• Investment review/IP harvestingInvestment review/IP harvesting• Issue resolutionIssue resolution
Solution CouncilSolution Council
Customer Customer Advisory CouncilAdvisory Council
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Three critical elements for the Council to be effective – criteria, key decision makers, and commitment.
• Does this offering support our brand positioning?
• Is it consistent with external messaging of the firm?
• Is it an expected area of growth over next 3-5 years?
Strategic Strategic ImportanceImportance
X%X%
PrioritizedPrioritizedSolutionsSolutions
• Is the market highly fragmented or entrenched?
• Do competitors have superior capabilities? If so, how big is the gap?
• How compelling is our perspective to the marketplace?
CompetitiveCompetitiveOpportunityOpportunity
X%X%
• Does a methodology exist that is articulated and integrated across capabilities?
• Has this methodology been tested/applied in real client circumstances with credentials?
• Do we have the capabilities in the firm?• Do we have sufficient bench/org structure to
scale?
Ability toAbility toExecuteExecute
X%X%
Level Setting Challenges The SM/PM Role Key Takeaways
Selecting the Solutions
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One of our clients uses a 3-stage model for classifying and managing their solutions portfolio.
Level Setting Challenges The SM/PM Role Key Takeaways
Storing & Retrieving the Component Data
Level Characteristics
1 Basic marketing support provided: relatively high degree of customization
2 Pre-sales support is provided; some of the pieces are known but not well productized, the services required to deliver is still highly customized
3 Significant part of the solution is productized; detailed, verifiable technical and product knowledge is understood; services are well mapped out
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The classic way to set up a repository is creating a very dynamic relational database.
Create searchable categories and fields
Example #1: a systems integrator
“the Cube”
Example #2: a software company
“detachable Lego blocks”
A B C D E
1
2
3
4
5
6
Customer Areas/Verticals
Offerings/Horizontal Solutions
Professional
DeliveryModels
SIManaged
Serv
ices
Services Capabilities & Offerings•Solution Assessments•Solution Fast-tracks•Delivery Resources•Proven Methodology
Solution Components•Example Workflows•Specific Solution Portlets•Pre-Built Controls•Testing & Promotion
Reference Architecture•Mined from prior real-world engagements
Services Capabilities & Offerings
Customer Service FrameworkCustomer Service Framework
Solution Accelerator Kit
Reference Architecture
Level Setting Challenges The SM/PM Role Key Takeaways
Storing & Retrieving the Component Data
© 2010 Solutions Insights. All Rights Reserved. 36
Another approach is to let the internal market decide.
● The “Google” approach– Entered by anyone; incentives
create the draw– Simple guidelines are followed– The internal market determines
how sophisticated the offerings need to be
– The greater the internal demand, the more the justification for an investment in standardization
Level Setting Challenges The SM/PM Role Key Takeaways
Storing & Retrieving the Component Data
© 2010 Solutions Insights. All Rights Reserved. 37
Group Question
●Do you have a defined process for taking a customized solution and standardizing many of its components? How do you decide which solutions can be productized?
© 2010 Solutions Insights. All Rights Reserved. 38
The Changing Roleof the Service and Product Managers
© 2010 Solutions Insights. All Rights Reserved. 39
For many SMs and PMs, being asked to manage a solution is…an unnatural act!
Activity Skills Requirements
Inputs Get the offer requirements from the customer; while sales may occasionally be a proxy, the usual path is to the customer directly
High interpersonal skills; significant customer facing skills
Identify the product and service elements and determine how to create or improve the total offer
Knowledge of the product, services and solutions portfolios
Development Activities
Manage a cross-functional, cross-organizational product and services team; often includes one or more partners
Team management—large; ability to work across BU’s and channel ecosystem
Create the solutions roadmap, including when, how and what types of services are required at the various stages of the customer’s solutions life cycle
Engineering and technology applications; services/solutions mapping; labor & resource management analysis
Improve the solution during the implement processes; codify the solutions components, identifying the customized and standardized pieces
Project and program management skills; strong problem analysis skills
Ensure that quality standards are met TQM knowledge and application
Outputs A solution offer that is a mix of customized and primarily standardized components
Value proposition based upon the customer experience and overall business benefits
Level Setting Challenges The SM/PM Role Key Takeaways
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In summary, here are the 3 main transitions to a Solutions Manager.
From a tailor to a chef…
From spinning a ball to a dozen plates, and…
From managing small to large groups
Level Setting Challenges The SM/PM Role Key Takeaways
Customization Integration of Multiple Products & Services
Internal and External Contributors
© 2010 Solutions Insights. All Rights Reserved. 41
Here are the 4 messages that I want you to leave you with.
● Make sure there is a common understanding of what solutions customization and standardization means
● Identify the technologies and processes that can be standardized
● Develop a storage and retrieval system that you are confident can be built and maintained
● Start with low-hanging fruit; in fact, you may never get very high up the tree!
Level Setting Challenges The SM/PM Role Key Takeaways
© 2009 Solutions Insights. All Rights Reserved. 42
© 2010 Solutions Insights. All Rights Reserved. 43
Thank you!
Steve HurleyManaging DirectorSolutions Insights
[email protected]+1-781-686-1607
www.solutionsinsights.com