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Research Report

Primer on Services Convergence

TSIA defines "services convergence" as:

The merging of previously independent service capabilities into organizational structures that improve the customer experience and reduce the cost to deliver. 

As TSIA benchmarking substantiates, it has been the common industry practice to establish independent P&Ls for each one of these service lines. This approach forces each service line to optimize their cost structure within the revenue and profit objectives set by the company. Yes, some companies expect to make money on all of these service lines. Other companies are willing to provide services at cost to pull product revenues. Regardless the profit expectations, establishing distinct P&Ls for each service line forces a certain level of fiscal discipline. In multiple articles, TSIA has expanded on the virtues of defining a clear financial business model for a service line and managing to that target model. In general, the approach of establish Independent service P&Ls that align to well defined financial models has served the industry well. Until now. 

This article provides the following insights:

  • What are the drivers for services convergence?
  • What are the potential benefits of services convergence?
  • What are tactics to migrate toward services convergence?
  • What are some industry examples of services convergence?
  • What does a highly converged services organization look like?

Authored By:

Thomas E. Lah

Executive Director, TSIA

Publish Date: July 26, 2022

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