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Service Design

Service DesignAs revenue growth for software licenses slows or even declines in many markets, the next great opportunity for revenue growth is in services. Services represent the fastest growing segment of most businesses, resulting in almost 60% of the US GNP. Services provide many advantages for smart technology companies, including:

  • High margins and growth rates
  • More complete whole-product solutions
  • Tighter engagement with customers about their needs
  • Reduced threats from outsourcing and lowest-priced competitors

The driving force behind the phenomenal growth in services is that customers are no longer searching for just a product. They are seeking, and will pay for, comprehensive solutions that enable them to realize the full benefits of what they buy. The most compelling solutions mix tangible and intangible elements – software and hardware and services and knowledge – into a comprehensive offering.

This makes service design an important part of Business Agility. By wrapping software and services into whole-product solutions, we let customers uncover the business value of our products faster. In addition, applying our deep product management experience, we can use services to increase core product revenue: boosting total sales rather than cannibalizing products with services.

Creating such whole-product solutions calls for whole-product thinking, with new services developed in parallel with (and tightly integrated into) the product development process.

Understanding Service Design

Enthiosys has found that services for software companies fall into two broad groups: services tied to the selling and installation process (which are often discounted or given away) and post-sale professional services that typically generate significant incremental revenue. In the diagram below, we’ve shaded high margin opportunities in green.

Service Design Map

Within this model, there are six domains:

  • Preparing - sales support and technical pre-sales support
  • Starting - installation, configuration, customization, and training
  • Leveraging - integration with other corporate applications and technology ecosystems
  • Bridging - business value-add services that enable a customer to realize the business benefits/ROI originally promised during the sales process
  • Strategy - optional consulting services that ensure long-term alignment between the customer and their various solution provider(s) relative to a set problems
  • Support - which may include low-cost/self-service options and high-value support options (our half shading indicates this range of revenue opportunities)

Within each domain, the specific services must be designed to meet customer needs – and be in alignment with your organization, goals and strategies. Experienced service designers will match new offerings to the maturity of your products and your service organization’s capabilities.

Engagement Model and Deliverables

In a typical service design engagement, Enthiosys’ seasoned staff collaborates with clients part-time over a 1-3 month period to:

  • Assess the current product set and identify new service opportunities
  • Price and forecast these potential new services
  • Identify the best channels or partners for service delivery
  • Operationalize each new service in enough detail to deliver it

Deliverables from an Enthiosys Service Design engagement often include service delivery strategies, revenue and staffing projections, high-level descriptions of each new service, training plans and customer feedback mechanisms.