February 5, 2015
It’s no secret that the technology services industry has experienced a dramatic shift in recent years when it comes to customer demands. In an effort to overcome the emerging challenges as a result of this change, more businesses are developing new and improved service capabilities that promote customer outcomes. While investing time and money into the right capabilities will allow your business to continue to grow, how do you determine which capabilities will be the most beneficial to your organization?
An organizational service capability is any resource that gives your business the ability to perform actions that achieve desired results. By closely tracking current industry trends, collecting survey data, and regularly talking with our members, TSIA has been able to identify the top organizational capabilities you should be investing in to optimize services performance in 2015. We’ve divided these capabilities into nine categories based on different organizational goals:
Within these categories, we’ve also identified the key capabilities that service organizations must master in order to scale and optimize their businesses.
The only constant in this industry is change, and based on recent trends, it’s become more apparent that the need to invest in new organizational capabilities is only going to increase. Here are some of the key industry transformations we’ve identified so far that are driving this need to develop new service capabilities:
Changing Economic Engines – Technology companies are moving away from the traditional product-based “make, sell, ship” business model to include services and subscription-based consumption models.
The Growing Importance of Service Revenues – Revenue streams are becoming more service intensive, which is beginning to play a greater role in driving both top-line and bottom-line growth of product companies.
Emergence of Level 3 and Level 4 Service Offerings – In our most recent book, B4B, we define four distinct levels of technology solution providers. Companies that have historically only offered traditional product-attach services (Level 2 offers) are beginning to experiment with services that help their customers accelerate their adoption of technology (Level 3 offers) and even services that help their customers to achieve specific business outcomes (Level 4 offers).
Commoditization of Level 2 Offers – The value proposition of traditional product-attach services is diminishing, as customers no longer just want products, they want to know they’ll achieve their ROI with your products, and it is your responsibility to ensure that ROI.
Changing Role of Services – Instead of simply following the product sale, service organizations are being called upon to create service offerings that drive ongoing consumption and ensure business outcomes for customers. Not only that, they are also expected to continue to drive account retention and expansion. Businesses are responding by further expanding services portfolios and offering outcomes while maintaining their current business operations.
“…over 80% of product technology companies are in the midst of a significant transition to their business models.
TSIA 2015 Service Capability Heatmap
At TSIA, our primary goal is to provide our members with detailed research reports tracking the latest industry trends and best practices so they can continue to improve their operations and meet their business objectives. We are dedicated to tracking and researching hundreds of service capabilities across the service disciplines of support services, field services, professional services, education services, service revenue generation, and managed services. Each year, our research executives collaborate and share their latest research findings, resulting in the creation of a downloadable research report called our “Capability Heatmap”.
TSIA’s 2015 Service Capability Heatmap outlines the service capabilities technology services businesses should be investing in. This deep-dive look at the state of the industry through the eyes of our research experts with data collected from top performing companies was designed to keep technology services organizations informed of industry best practices and how they should invest their time, money, and resources wisely in 2015.
The greatest concern TSIA has for member companies is that they delay their efforts in these areas—holding on to legacy business models that will not be sustainable when the industry transition is complete.
While the first step toward success is identifying factors that can disrupt the progression of your business, it’s another to do something about it. Download the TSIA 2015 Service Capability Heatmap to get started down the right path toward making the best investment choices for your business.
Curious about becoming a TSIA member? Contact us today about how you can gain unlimited access to the hundreds of research reports, checklists, and white papers created to give your business a competitive edge in this ever-changing industry.
Thomas Lah is executive director of TSIA. Since 1996, he has used his incisive analysis, strategic thinking, and creative solutions to help some of the world’s largest technology companies improve the efficiency of their daily operations. He has authored several books, including, Bridging the Services Chasm (2009), Consumption Economics (2011), B4B (2013), and Technology-as-a-Service Playbook: How to Grow a Profitable Subscription Business (2016).
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