The task of building compelling service offers that promote optimal customer outcomes is now the responsibility of a new organization: Service Portfolio Management. This is an emerging function that has matured over time.
In this post, I’m going to share the evolution of the Service Portfolio Management organization and how to build and grow one within your company.
Who is Responsible for Your Services Portfolio?
Years ago, we saw Service Marketing defining traditional support offers, as well as managing the communication of those offers. Then, we began seeing Service Product Management functions emerge, which were typically responsible for the service offer development for a single service line (e.g. just Support Services or Professional Services).
Now we are seeing the evolution of Service Portfolio Management, which is defined as a person or team responsible for the service offer development and internal collaboration across multiple services lines, such as Support Services, Education, Customer Success, and Professional Services.
Who has primary responsibility for identifying and defining new recurring service offerings?
Why is The Emergence of Service Portfolio Management Important?
Your customers require more than traditional break/fix support—they need services across multiple organizations without multiple purchase orders. You need to harmonize this and build a converged portfolio of services that includes operational, adoption, and information services.
The Service Portfolio Management team is really the catalyst in bringing these value-added services to market. By pulling in subject matter experts from Support, Professional Services, Education, Managed Services, and Customer Success you can develop service offers holistically to create positive outcomes for customers. This is accomplished by managing the technical complexity, accelerating the customer ROI, and ultimately building the right service offer for the right outcome during the right time of the customers’ journey. Also, this is where you need to extend this cross-functional collaboration even further and bring in Product Management, especially in a Technology-as-a-Service (XaaS) environment.
Watch our recent Portfolio Management Keynote Panel with myself, Thomas Lah, and Laura Fay, TSIA’s vice president of XaaS Product Management research. This cross-functional handshake can help drive new product capabilities in which new value-based services can be delivered to increase customer adoption.
How Do You Get Started in Building a Service Portfolio Management Team?
There are clear impacts this function can have for a company—it rationalizes the existing service portfolio, eliminates overlap in service offers to reduce internal competition, and provides a service offer design process that delivers value in new ways for customers. Here are 5 steps to get started:
1. Gain Executive Buy In
Build a data-driven case to converge the service portfolio. Consider what the key business results should be and how effective the current service offers and pricing strategies.
2. Understand Each Line of Service Delivery
How does each area of the business contribute to the customer’s success and adoption of the technology? What are the service offers and capabilities of the team that can be monetized? Are there overlaps in current strategies?
3. Align Your Actions with the Company Strategy
What are the high-level goals and objectives and how are they aligned to the service organization? Consider success factors, such as: customer adoption and retention but be mindful of tactful goals, such as profit margin, billable utilization, case volume, and Net Promoter Score (NPS).
4. Lead with Stakeholders
Communicate the vision and strategy of the team and identify key contributors to drive thoughtful harmonization across the services silos.
5. Be Inclusive
Invite colleagues outside of services to have a seat at the table. Consider the delivery teams, Sales, Operations, and Channel Partner teams.
Finding the right people and letting them act as value-focused entrepreneurs instead of as (solely) service product owners, will take you a very long way. The advantages of one Service Portfolio Management are:
- Single source of truth for the services a company will sell under a unified portfolio plan
- People can bring new ideas to the well-defined service offer development process for consideration
- Bigger voice and better business case for system enhancements
- Marketing message is consistent and stays true
- Everyone aligns to the strategic imperatives, such as customer success services
We are not only creating an environment for cross-functional teams to come together. We, as an industry, are building a career path. In the past few years, I’ve seen the role of Product Services Management evolve from managers, to directors and now VP of Service Portfolio. We are developing our own seat at the table.
To get the latest industry trends sand data-backed insight on what the future holds for Product Service Management teams, reach out to TSIA. Our Service Revenue Generation research practice is ideal for organizations looking to enhance their service offer portfolio and unlock new revenue potential. We look forward to hearing from you!