PS Village: May 7, 2008
Throughout my career I’ve been on the technical side as a programmer and the managerial side as a project manager, team manager, and now company owner. What has been interesting is seeing the different professional services business models across the various commercial companies I’ve crossed paths with – namely pure consulting organizations and product companies with services. Contract mixes, clientele, types of services and offerings, etc. are all very different at the detail level but one thing is a constant in these business models – you have to close a deal to gain the opportunity to demonstrate your value add in the area of professional services.
In a pure consulting organization, the sales team has a keen focus on closing the deal – this is the bread and butter of the company. In a product company with services, it isn’t this clear. You may be surprised by this statement but consider this – what is the driver of the company? To be known for the products they sell and support those products with high quality customer service.
Services in a product company rely heavily on the type of product being sold. Self-contained products that perform a defined function or functions such as project management, financial management, customer management, etc. tend to have Professional Services organizations that focus on product deployments. Once the deployment is complete, the Customer Support organization takes over the customer relationship. The Professional Services organization exists to deploy the system, provide feedback to R&D on features worthwhile to incorporate, and ensure the Customer Support organization is aware of customer specifics. Customer sales can actually be closed without selling Professional Services should the customer already have experience in the product or plan to learn on the job.
Services in a product company that sells infrastructure tools which can be used to build solutions, such as databases or integration tools, are more critical in the development of a customer deal. It is fairly difficult to sell only a product license to customers with no Professional Services to build a solution. In this situation, Professional Services and Sales must form a partnership to succeed. The trap that infrastructure product companies fall into is a division of Professional Services and Sales where Professional Services is more aligned with R&D and Sales is more aligned with Product Marketing.
What begins to happen is Professional Services learn features of the product from R&D but does not learn or invest time in understanding or developing solutions. Marketing begins to define the concept solutions for Sales to promote. Customer deals are closed and Professional Services are brought in to deliver a solution that has been built on a concept. Professional Services must then make reality happen which, at times, is difficult and runs into problems. Customers become unhappy or margin is lost by the company due to more investment in effort to complete the delivery.
How can this be avoided?
Sales and Professional Services for infrastructure product companies must have a partnership. Jointly, the organizations should develop solutions with input from Marketing before customers are approached. Periodic reviews of customer accounts by Sales with Professional Services allows the teams to identify potential opportunities by expansion of existing customer applications or even expansion of previous deliverables. It is apparent that Sales is the first contact with a client, but Professional Services ends up being the ongoing contact providing Sales with information about ongoing opportunities. Sales and services are natural partners. Product companies will benefit from realizing this by ensuring Sales compensation includes Professional Services, Services personnel are consulted by Marketing and Sales when new product releases are available, and so forth.
A product company’s strength is its Sales team and the Professional Services it provides in delivering the quality product the company is known for. A partnership is the key to ongoing success and growth.