As business models at tech companies rely increasingly on as-a-service (aaS) revenue growth, services functions have moved front and center. Today, tech leaders can do more than install, configure and support hardware and software. They can help lead business growth and support enterprise customer success at every stage of the life cycle.
Top-notch services functions that have the right focus, skills and tools can help a company:
- Bolster the sales and adoption of new technologies
- Sell differentiated enterprise solutions
- Deliver enterprise customers a superior end-to-end digital experience
- Secure and grow recurring revenue streams
To tackle these additional roles, many services functions may need to transform themselves. Some may focus on a few strategic areas while leaving other tasks to channel partners. Other teams may need new monetization models to go after new opportunities, and still others may need new technology and processes to support an industry-leading digital experience for their enterprise customers. Teams may also require new operating models along with new approaches to attracting and retaining talent.
Why transform your services functions now?
Answer these questions to find out.
- Is your industry moving to recurring revenue models?
- Is your service portfolio aligned with your core offering?
- Are your customers adopting your latest innovations fast enough?
- Is your company providing a digitized holistic service experience?
- Can you deliver differentiated expertise cost-effectively through always-on digital experiences?
Five steps to upgrade your services capabilities
Companies that are transforming their services functions face significant challenges—partially because large numbers of experienced consultants, engineers and agents will likely have to learn new ways of working, and people tend to resist change. These five steps can help you build a virtuous cycle (positive outcomes that create additional positive outcomes) that can accelerate business growth and enable sustained margin expansion.
1. Know your strategic priorities
Your services functions should focus on high-value offerings—ones that scale new products, deliver expertise that increases adoption and usage and help drive new business models—while leaving other efforts to business partners. A leading practice is to continuously reassess which offerings match your company’s strategic priorities, since the correct answer will likely evolve over time.
A new enterprise software offering, for example, may initially require intense support. However, as customers become accustomed to using the software, channel partners may be in a better position to offer ongoing support and expand market share. You should keep your services portfolio focused on where it can drive the greatest impact.
As an example, one leading storage technology company decided to focus its professional services function on a new product agenda—including storage-as-a-service—and on close collaboration with sales. It handed off support for legacy solutions (such as simpler data migration) to channel partners. The result has been fast growth for new products and stability for existing ones.
2. Monetize new models
As you start earning more revenue from as-a-service offerings, your monetization model for services may need to change. In the past, consulting teams charged for advice, support teams charged for support and software and hardware teams charged for one-time sales of their products. Today, services will offer some of these items for free—or at a minimal upfront cost—and earn revenue over years as part of an all-inclusive recurring fee. Keep in mind that you should carefully calculate pricing for this as-a-service environment.
Many cloud services providers have already transitioned their professional services teams away from sales that seek immediate profits. Instead, these teams look to win digital transformation contracts that can create long-term revenue through increased cloud consumption over the years.
You’ll have to decide how much risk you may be willing to accept today to drive revenue tomorrow. As you help customers onboard your as-a-service products, you may decide to perform some or all of this onboarding for free—but you should do this only if you’re confident that it can generate long-term customers.
3. Satisfy customers and employees digitally
To offer enterprise customers an end-to-end digitized experience—one they’re accustomed to getting from cloud-native companies—you may need to upgrade your services function. To forecast and meet your customers’ needs, your services team will need tools and skills to access and use operational and experience data across every stage of customer interactions. To make this data available and usable for your services staff, you’ll probably need centralized data management and agile teams to break down data silos in your company.
A top-notch digital experience can also help your services and support employees deliver value more effectively. Automation can take simpler manual tasks out of their workflow, while personalized tools (such as computer interfaces) can cut down on redundant applications and mouse clicks. Artificial intelligence (AI) can put the right information at the right employees’ fingertips, including prompts, data analytics and a 360-degree customer view across products and services that includes data from unassisted digital interactions. You can also use digital apps and augmented reality to upskill employees in engaging ways.
4. Redesign how you operate
With the new responsibilities added to your services functions, you may require a new operating model. To support a digital customer experience, for example, you may need new experience-management capabilities. To create an ongoing design-build-run-maintain model for new services, you may require agile teams that cross divisions. And to help drive long-term product consumption, you may have to restructure roles traditionally structured around one-off billing.
Another consideration is deciding what to do locally and what to do centrally. As the services experience becomes digital, it may need to own tasks that once drew on centralized talent such as user interface (UI) design, robotic process automation (RPA) and natural language processing (NLP). To better focus on enterprise customers and unify digital services capabilities, we recommend breaking down traditional silos, including those between contact centers and field services. Your new operating model should also make it easier for services functions to collaborate with sales and product teams, as they may now be taking a leading role in supporting them.
5. Get your talent ready—and motivated
To support the new operating model, your services staff will need to learn new skills. As their jobs increasingly merge with sales, these employees will need to have a greater understanding of your customers’ industries and challenges, and how your products and services provide solutions. Experience with AI, RPA and the internet of things (IoT) can help your teams assess trends in customer usage, improve service delivery and identify upselling possibilities. They’ll also need digital experience skills to help self-service digital channels give customers the right easy-to-use tools to capture the right information.
As your services teams absorb new roles—many of which will primarily drive revenue for other areas—you may need to develop new compensation frameworks and metrics. The right metrics could capture how well services are driving software and hardware sales for other functions, as well as new aaS subscriptions. These metrics could also measure how well services functions support the new digital experience for enterprise customers, as well as the return on experience (ROX) you are receiving.
Start here to thrive in a digital-first world
As customer demands grow—with new competitors vying to meet those demands—the time to act is now. With the help of their services functions, technology companies can offer enterprise customers a compelling digital experience and up-to-the-minute solutions. But to achieve those objectives, services themselves should change.
The road to future-ready services functions begins with a plan and a map. Assess what your customers want today, what they are likely to want tomorrow and what gaps you currently face. You can then set a path forward centered on these five steps to meet—and even anticipate—customer demands.
When the transformation of services functions is successful, the impact can be exponential. You can expect faster scaling of new businesses, leading-edge experiences for customers, enhanced customer retention, and upselling and cross-selling opportunities at every step of the life cycle.
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