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TSIA’s Technology Services World (TSW) conference is coming up, May 7-9 at the Manchester Grand Hyatt, right on the Embarcadero in San Diego. Our theme for this conference is “Blending Service and Sales Motions.” I have the honor of giving the pre-conference keynote at 11:45am, and this gives me the opportunity to talk about a trend I’m seeing for professional services: microtransactions. Here’s the story:
With the shift toward cloud technology, many company’s IT departments have been downsized. As enterprise software becomes increasingly housed and maintained by the vendor in the Cloud, fewer resources are needed when compared to the days when everything was on premise. But the downside to fewer IT staff is that there can be a long wait for system administration resources. If a business user needs a new dashboard created, or wants a customization to the system, who can they turn to for assistance?
To fill this gap, more Professional Services teams are offering consulting projects in bite-size chunks. Want a custom report created, or need some fields added to a screen? Pick from an online catalog of services, fill in the details in an online form, and press “Submit.” The project will be assigned to an available consultant and completed within the time frame commitment, and charged to an open PO, or even paid for online with a credit card. These small engagements, typically requiring just a few hours resources, are called “microtransactions.”
According to TSIA’s Professional Services Benchmark, billable utilization rates are hovering just under 60%. Even with the best professional services automation (PSA) resource management, there are some highly-compensated resources on the bench each week, either waiting for their next assignment, or during a lull in a project. Most companies also typically have some new consultants in training, who can handle short, easy projects while they are training for more extended, complex projects. Not only can microtransactions create a new revenue stream, but by being responsive to customer needs, these mini-projects can boost customer adoption and speed time to value for the technology.
Our partner Kimble Applications, a PSA provider, has multiple customers monetizing microtransactions. One of Kimble’s customers, a global survey software business, offers microtransactions for one to a few hours to create a report or provide assistance in survey creation.
And while cloud software firms are an obvious industry to pursue this trend, hardware/device companies can as well, using either professional services consultants or field service technicians. Kimble offered another customer example, a professional services division of the B2B arm of a leading European copier/printer firm. They are finding large scale adoption of microtransactions for services such as setting up new printers, copiers, or scanners, and integrating them into the existing network. In this case, field technicians are doing the work, undertaking up to 15 jobs per week, with projects lasting from 2 hours to 2 days.
So why isn’t everyone doing this? There are certainly some technical barriers. Customers expect to be able to self-serve, browse a list of available services, and pay for and schedule the job online. This is hard to deliver for many companies, especially considering the average business days to generate a project proposal is 38 days, with an additional 18 business days to identify resources for the project. Clearly some new technology is required:
While my focus is primarily professional services, clearly this concept applies to field service and managed services (whose IT-savvy teams are already familiar with the service catalog concept), and even education services for customer 1:1 training. I’m also seeing microtransaction service catalogs positioned as customer success offerings, as they enable the customer to more fully consume the product, as mentioned previously.
Hopefully I’ll see all of you in my pre-conference keynote, in which I’ll not only go into more details on Navigating the Brave New World of Microtransactions, but I’ll also give an overview of the findings of my 13th annual Global Technology Survey, including spending and adoption trends.
Later in the day, I’ll have an all-CEO panel in my Power Hour, “Creating the Infrastructure for Profitable PS Microtransactions” at 4:15, with the CEOs from Moovila, Workrails, and Zimitdiscussing the trends they are seeing and how their solutions are enabling this new breed of service offering.
Thanks for reading, and I look forward to seeing all of you at TSW!
Read more posts in the "Blending Service and Sales Motions" blog series:
Post Date: May 1, 2018
John Ragsdale is the distinguished vice president of technology research, for TSIA. His area of expertise is in creating strategies for improving the service operations and overall customer experience by leveraging innovative technology. Ragsdale drives TSIA's highly regarded technology research agenda, delivering insightful, thought-leadership research and analysis on the most pressing business issues facing services leaders to enable them to better plan and execute their service strategies. He is also author of the book, Lessons Unlearned, which chronicles his 25-year career inside the customer service industry.
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