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Marketing of Services Understanding Services Enterprise IT Services and Categories Market Motivators and Influencers Delivery, Pricing, Alliances and Service Level Management Account Life Cycle
What is a Service?
Classic definition: Classic definition: Something the user does not own but Something the user does not own but experiences and benefits fromexperiences and benefits from
From the Seller’s Perspective: From the Seller’s Perspective: A service company provides its people A service company provides its people to to others to create intellectual propertyothers to create intellectual property
From the IT perspective:From the IT perspective: Repeat effort for every new customer / Repeat effort for every new customer / requirementrequirement
Another perspective:Another perspective: Comes with peopleComes with people
Enterprise IT Services
Application Development and Management Infrastructure Management Enterprise Application Implementation Enterprise Integration Business Process Management Technology Consulting IT Enabled Services Business Process Outsourcing
Service Categories• Enterprise Technology Solutions
– Migration
– Infrastructure Management
– Integration
– Application Development and Management
– Application Rationalization
• Organizational Domain Specific Solutions
– Compliance
– Security
– Governance
– Collaboration
– Business Process Management
– Business Intelligence and Data Warehousing
• Business Process Specific Solutions
– Accounting
– Customer Relationship Management
– E-Commerce
• Vertical Segments
▫ Insurance
▫ Banking and FS
▫ Retail
▫ Manufacturing
▫ Telecom
▫ Life Sciences
▫ Pharma
▫ Media and Entertainment
▫ Logistics and Transportation
Market Motivators• Cost Savings
– Integration
– BPM
– BPO
– APR (Apache Portable
Runtime)
• Quantifiable Value Addition
– EA Implementation
– Consulting
• Best Practice
– Legacy migration
– BPM
– BPO
– Consulting
– APR
– EA Implementation
Business Scenarios
o Merger and Acquisition
o New markets
o Competitive advantage
o Financial targets
o New line of business
o Realignment of business goals
o Process inefficiencies
o New business needs
Business Decisions Cost-Benefit? In-house or Third Party? Stay or Migrate? Standard Product or Custom Solution? Integrate or Replace? Fix or Replace? Be Flexible or Rigid? Stick to known or try something new?
Delivery
Typical Engagement
Project 1 Project 2 Project 3
Onsite Resources
Offshore Resources
Onsite Resources
Nearshore Resources
Nearshore Resources
Offshore Resources
Global Delivery Model
Pricing models
Time and Material based Pricing
Fixed Pricing
Performance Based Pricing
Predictive Pricing
Vendor Risk Client Risk
Very Low Very High
Low High
High Low
Very HighVery Low
Service Level Management Development of and Adherence to Service Level Agreements
(SLA) Monitoring of Quality of Service (QoS) Assignment of Key Performance Indicators (KPI) Potential problems can be identified (such as gradual
performance degradation) Service roadmaps can be created Support plays a key role (L1, L2, L3, L4)
Alliances and Partnerships With ISVs (As implementation partners) With OEMs / ISVs (Original Equipment Manufacturer, As
Consulting partners) With ISVs (Product Engineering) With other service providers (As resource augmentation
partners) With Hosted Service Providers (As Application development
partners) With platform vendors (As application development partners) With any other IT product / service vendor (As support
partners)
IT Services are big business Dec 2007: Prudential, TCS sign up for $1.5bn deal
Jul 2008: Aviva strikes $1bn BPO deal with WNS
Sep 2008: Accenture signs $550mn deal with Bristol-Myers Squibb
July 2007: Infosys, Philips sign $250mn BPO deal
Jan 2008: Bharti Airtel, IBM Signs $150mn Deal
Jan 2009: TCS leads race for Sony's $100mn outsourcing deal
Account Life Cycle
Single Project20 resources
$ 1.6 mn
Increase in project size50 resources
$ 2.1 mn
Year 1
Year 2
Multiple projects across org.150 resources
$ 5.5 mn
Year 4
Strategic Engagement1000 resources
$ 22 mn
Year 7
Off
shore
leve
rag
e
Profitability of account
5 offshore + 15 onsite
25 offshore + 25 onsite
100 offshore + 50 onsite
800 offshore + 200 onsite
Weighted average revenue per resource = $ 100,000
Weighted average revenue per resource = $ 80,000
Weighted average revenue per resource = $ 80,000
Weighted average revenue per resource = $ 60,000
Multi-year contract: $ 100 mn
Discussion Possible challenges? What role can the IT Service Provider play? Entry point to initiate Account?
Focus Total Quality – quality driven product, CMMI, ISO Customer satisfaction Long-term relationship Managing channel partners Strive to be leaders in global market Helps firms to get maximum returns in minimum time E-marketing
Services Customer software development Consulting Web designing/redesigning Web portals E-marketing Outsourcing ASP ISP BPO KPO ISV APR
10 EA pitfalls that a real EA implementation might experience
Doing EA just for the sake of EA Weak political skills of EA lead No measuring and selling of EA Lack of short term outcomes Not enough involvement in SDLC Missing focus on Information Buried under business processes Missing PMO / Finance control Wrong location in hierarchy Spending time on frameworks
Managing Channel PartnersMacro trends
Strategies for success Understanding the end-customer buying process Restructure the economies of your channel
partner Lead from top
Evaluations should be conducted yearly and include both quantitative and qualitative assessments.
Quantitative measures can include the distributor’s purchase patterns, pricing abilities, and market share. Qualitative assessment can include the strength of the distributor’s management, the
effectiveness of their growth plans, and overall customer experience they offer.
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