Marketing of Services

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

Thank You

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.

Books ‘Marketing of Information Technology’ by K Venkatesh

‘Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers’ by Geoffrey A. Moore

‘ In Search of Stupidity: Over Twenty Years of High Tech Marketing Disasters’ by Merrill R Chapman