A story that has grown increasingly familiar – a product company, caught in the commoditization cycle, seeks a more attractive business model built around Professional Services. Embedded advisory services rose in popularity following the widely-publicized service transformation of IBM in the 90’s and Xerox in the early 2000s. Now they have are a staple in product-centric companies, glorified as a path to strategic differentiation. When highly-functioning and integrated properly, embedded PS serves as an engine for growth in three key ways:
- Provides an additional revenue stream through stand-alone services,
- Optimizes existing products and services to increase value delivered and establish a halo effect to power pull-through revenue and margin, and
- Builds customer intimacy and differentiation for a brand and product lines.
While some companies have effectively leveraged PS to achieve their desired outcomes, many organizations are still looking to unlock the greater opportunity provided by their PS businesses. Though in some cases, PS struggles stem from a lack of commitment from the greater business, we have found that there are many challenges that PS businesses can and should address independently to move to their desired future state.
Below are the top 9 challenges that PS executives face. By overcoming these issues, they can materially grow their businesses to impact the broader organization. As you read through, identify whether any of these questions resonate with your business:
- Are your heroes and experts holding you hostage?
See More - You are being pulled into risk-based engagements, but are they right for your strategy?
See More - Is your PS team at odds with your corporate sales team? Does sales not like to sell PS because it’s too hard and not big enough?
See More - Do your leaders spend too much time working in the business instead of on the business?
See More - Are you always being asked to give work away?
See More - Do you feel misunderstood internally – is your ability to grow handcuffed by the corporate product business model?
See More - Is your business’ growth too dependent on a select few- are you unable to control your own destiny?
See More - Does your organization fully understand the financial levers of PS?
See More - Is your offer structure standing in the way of account growth?
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Written by: Anthony Paluska
About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.
