That presents a huge opportunity for the forward-looking organization. A recent report from Services Professional Insights (SPI) Research has found that services companies that have optimized their operations are significantly outperforming their peers. SPI surveyed 549 professional services firms, and identified the 20 'best of the best' companies, those that outperformed their peers across five dimensions – leadership, client relationships, human capital alignment, service execution, and finance and operations. Those 'best of the best' firms produce on average, 23% net profit while the bottom 300 firms produced just 2% net profit.
That’s a significant difference and a clear indication that the time has come for the industry to refocus. Services businesses need to do more than simply improve on their processes and delivery, but truly explore the realm of what’s possible. Based on my career in the industry and work with some of the NetSuite customers who rank among the 'best of the best', I would suggest there are three core areas services businesses today need to focus on to deliver on the promise of the possible.
A clear view of the future
It’s a problem all too familiar for anyone who’s worked in services – sales closes a deal, throws the contract over the wall and suddenly the services organization is scrambling to deliver. That lack of communication between services and sales almost always leaves services under the gun and lined up for failure. Services organizations that are succeeding today have a clear view into the sales pipeline. They know when the company has been shortlisted and when the contract goes out. When the paperwork is signed they have the resources lined up. With that critical information the services team becomes near-clairvoyant, with the ability to pull people in who are on the bench, identify people rolling off engagements and, if need be, pull a key resource off an existing project to ensure the new engagement gets off to the right start – all weeks before the project needs to kick off.
Involving services during the sales process is vital. Sales knows how deals are being structured, there’s no reason the services group can’t be kept abreast to have the implementation scoped out ahead of time as much as possible. This reduces risk, improves overall communication and cohesion and ultimately facilitates a vastly better customer experience. At NetSuite, we have a dedicated team from our professional services group who are specialists in evaluating implementation and focus on working with sales to put together statements of work. Contracts are executed more quickly, service teams are invested from the beginning and ultimately our customers benefit. It’s a matter of strong communication and having a central system on which to collaborate.
Know your people
Employee turnover is incredibly costly for services organizations. By some accounts, it takes six months to get a new hire up to speed. Add the time it takes to actually find the right talent these days can be a serious drain on company resources.
Most services organizations have some level of detail on the people in their organization, but the best ones know more than basics, like ability to code in Java or accounting. You need to know who can speak Spanish, who is or isn’t willing to travel and for how long, who has a work visa that may be expiring and who may be going away on a honeymoon. From my experience, HR systems tend not to have the information needed and they tend to be out of date. Companies didn’t think they needed that data when they implemented it, never collected it or HR didn’t bother to maintain it and, as a result, the services group doesn’t trust the data. Oftentimes, the person’s office and address are out of date, never mind the skill sets. Having the data that’s important to you in a professional services automation system is critically important.
The best organizations have a system that allows them to create the fields that can capture any info you want. For example, some ask their staff what kind of project would they’d like to work on next. (government, security, creative, travel, short engagements, long engagements) and capture that in the system. Employees know they’re expanding their skills, and have a career track. When you crack that code, you become one of the best companies to work for.
Know how, and why, you can expand your services
We’re in the midst of a period of punctuated equilibrium for modern businesses – companies are evolving more rapidly than ever before. NetSuite is a prime example. In our early days, we were a development organization with a sales team to go deliver the product. Today, we’re pure services. Even the licenses we sell are services. Our services span multiple support packages, assessments and account reviews. All modern services businesses need to be able to identify and capture every opportunity they find. What can your people do? What’s possible? What makes sense for your business?
If you’re a software company delivering services, why wouldn’t you sell a warranty? If you’re a manufacturer, does offering an enhanced field technician service make sense? If you’re a traditional management consulting firm offering tactical services, why not offer strategic services? Can you extend to creative services, design services or outsourcing operational services? It’s a matter of thinking outside the box.
While a keen eye for developments in your industry is a given, this really demands a close relationship with your existing customers. Do you have a customer who’s gone through a couple of acquisitions and tripled in size but still using the same processes and sales systems as they were when you started working with them? Reach out and see if you can help them manage that change. Better yet, determine what hasn’t changed. Where do they need help and where can you provide it? That conversation leads to improved revenue opportunities, a deeper relationship and a natural path to growth.
It’s just a matter of delivering on the possible.