We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byJulia Cantrell
Modified over 3 years ago
www.servicestrategies.com email@example.com Copyright © 2005 Service Strategies Corporation Presented by John Hamilton, President Managing Support as a Business
Copyright © 2004 Service Strategies Corporation Agenda The Business of Support The Business of Support What is S Business ? What is S Business ? Market Trends in the Service Business Market Trends in the Service Business What Every Service Manager Should Know What Every Service Manager Should Know Support Strategies Support Strategies
Copyright © 2004 Service Strategies Corporation The Business of Support
Copyright © 2004 Service Strategies Corporation The Business of Support A Corporate View Support Investment Impact of Support Return on Support Investment
Copyright © 2004 Service Strategies Corporation The Impact of Support Helps customers accelerate full product deployment and utilization Earns and sustains customer loyalty Contributes to business profitability Provides a source of customer insight Goal – Translate Impact into Business Value
Copyright © 2004 Service Strategies Corporation The Business of Support By the Numbers 9.1% 37.2% $73Billion Average support funding as a percent of total revenue Average contribution of support revenue to total corporate revenue 65.3% Average support margin Amount spent fiscal year 04 to fund support operations world-wide *Gartner World-wide support revenue earned in FY04 $125*Billion
Copyright © 2004 Service Strategies Corporation What is S Business ?
Copyright © 2004 Service Strategies Corporation WHY S-BUSINESS? Services contribute 35% of the computer industry revenues and 60% of the profits. Services deliver 61% gross profit margin and 30% growth rate to top-performing organizations. Services have an average gross margins that are more than 50 percent higher than products. We have a pretty extensive services business. We have embedded services that go along with the product. Then we have the discretionary services, the professional consulting, SAN (storage area network) design and deployment, application development, managed services--it's about a $2.6 billion business for us and growing at roughly double the rate of our product business. Michael Dell, President and CEO, Dell Computer (1) Source: The State of S-Business. James A. Alexander, AFSMI. 2002. (2) How to Make After-Sales Services Pay Off. Bundschuh & Dezvane. McKinsey Quarterly 2003 Number 4. (3) DFBA Worldwide High-Tech Equipment Services Database
Copyright © 2004 Service Strategies Corporation WHY S-BUSINESS? The current annual growth rate of services is more than double that of products. Services possess the potential to expand revenue 4 to 5 times that of the product purchase. Global 2004 market forecast is $1.4 trillion.
Copyright © 2004 Service Strategies Corporation S-BUSINESS CUSTOMER SERVICES AND SUPPORT PRODUCT SUPPORT SERVICES Contact Centers, Field Service/Maintenance, Depot Repair, Parts, Logistics, Installation, Telephone and Internet-based Technical Support, Device Relations Management, Closed Loop Supply Chain VALUE-ADDED SERVICES Project Management, Project Implementation, Systems Integration, Market Research, Functional Outsourcing, Temporary staffing, Training, Asset Management, Design for Serviceability, Software Support, and Benchmarks PROFESSIONAL/CONSULTING SERVICES Needs Assessment, Process/Infrastructure Analysis, Strategy Development, Technology Design, Project Planning, Solutions Evaluation and Recommendation
Copyright © 2004 Service Strategies Corporation Market Trends in the Service Business
Copyright © 2004 Service Strategies Corporation What happens in the market low Time dependency on product Product-led Business Data Center Mainframe Product-related Business Maintenance Services Services-led Business Professional Services 70-90 90 to 0000 to 10
Copyright © 2004 Service Strategies Corporation The IT Market shows attractive growth rates 82% 18% 83% 17% 84% 16% 2003 2004 2008 537 563 721 CAGR Professional Services Maintenance Services IT Services world market in billions of $$ Gartner:Dec.2004
Copyright © 2004 Service Strategies Corporation S-BUSINESS THE SERVICES CONTINUUM 1.Pure Services: We provide product support services and/or professional services, but no products. 2.Services-Led: We are a services-driven business that also sells products. 3.Services is a Profit Center, But…Yes, we sell services and try to make some money on them, but our core business and our focus are products. 4.Services is a Cost Center: We aggressively sell products; however we also provide and charge for maintenance services. 5.Pure Product: We are a product company, period. (We outsource all service or we handle only warranty and product problems with our own people--usually at no charge.) Pure Services Pure Product
Copyright © 2004 Service Strategies Corporation Business Motivation
Copyright © 2004 Service Strategies Corporation Support Funding Levels by Company Size
Copyright © 2004 Service Strategies Corporation Support Sales Channels
Copyright © 2004 Service Strategies Corporation Support Sales Effectiveness
Copyright © 2004 Service Strategies Corporation What Every Service Manager Should Know
Copyright © 2004 Service Strategies Corporation Unit Cost Financial Measures Cost per Case Detail Breakdown by product New versus mature product Phone versus e-case Cost per FTE Detail Breakdown by grade level Fully burden cost Understand monthly fixed cost Explain monthly variable cost
Copyright © 2004 Service Strategies Corporation Average Cost to Close by Tier Cost to Close
Copyright © 2004 Service Strategies Corporation Service Revenue Revenue per customer Detail Breakdown by contract type Maintenance contracts Warranty service Value added services Revenue per Channel (partners) Revenue per Employee Support center Field Service Professional Service Service Contract renewal rates
Copyright © 2004 Service Strategies Corporation Revenue Contribution Service Revenue
Copyright © 2004 Service Strategies Corporation Support Programs Offered
Copyright © 2004 Service Strategies Corporation Support Program Pricing
Copyright © 2004 Service Strategies Corporation Profitability Measures Service profitability Support Center Field Service Professional Services Margin analysis By customer contract type Profit margin per Service Employee Service Contribution to company profitability
Copyright © 2004 Service Strategies Corporation Return on Investment ROI to Justify: Service Tools Knowledge management Self Help, etc Staffing Training Product enhancements and fixes Customer Loyalty
Copyright © 2004 Service Strategies Corporation Why Loyalty? Goal = Loyal Customers Loyal Customers = Profitable Growth Customer Retention Increase Customer Repurchase and Wallet- share Acquire New Customers through References
Copyright © 2004 Service Strategies Corporation Making the Case to Management: 3 types of ROI for Customer Loyalty Customer Acquisition Premise: New customers are more expensive to Acquire Focus: Retention Future Purchasing Levels Premise: Ask customers about future purchases if satisfaction issues are fixed Focus: Repurchase Customer Value Premise: Track revenue & profitability of customers based on transactions Focus: Activity- based Value
Copyright © 2004 Service Strategies Corporation Support Strategies
Copyright © 2004 Service Strategies Corporation Support Strategy The Future of Support Transition from support of products to support of customers business More emphasis on business critical services Alignment and scrutiny of support performance goals with corporate business objectives Shift in emphasis from operational to business metrics Support spending justification shifts from cost reduction to ROI Emphasis on revenue generating opportunities Emphasis on optimization Search for latest silver bullet is replaced by emphasis on optimizing process and knowledge A New Value Proposition New ways to define, market and sell support products
Copyright © 2004 Service Strategies Corporation Customer Trends The Future of Support Value Proposition Greater demand for quantification of support value SLAs Emphasis on service level commitments End-of-Life Reluctance to adopt new technology forces review of support policies
Copyright © 2004 Service Strategies Corporation Pursuit of World Class Support Support must be recognized as a strategic necessity to further the corporate mission The support mission must be focused on maximizing the value of customer relationships not simply support financial performance The impact of support must be expressed as tangible business value Support funding decisions must be evaluated base on the return on the investment Manage Support as a business Balanced Scorecard
Copyright © 2004 Service Strategies Corporation Scorecard Employee Satisfaction Customer Satisfaction Accountability & Process Financial Results
Copyright © 2004 Service Strategies Corporation Quantify Support Value Support contribution and success is most often measured in financial terms The full impact of support is assumed, but seldom quantified
Copyright © 2004 Service Strategies Corporation Thank You Any Questions ? John Hamilton President Service Strategies Corp.
ServiceXRG The Economics of Support Knowledge Management.
The Reality of the Struggle to Align the Business with I.T. Rosana F. Chaidez Large Company Technology Networking Conference June 17th – 18th, 2008.
I MPROVING C USTOMER P ROFITABILITY D R. F. B ARRY L AWRENCE, P H.D.
An investment perspective of HRM Learning outcomes: Context of SHRM Investment perspective Valuation of Assets Understanding and measuring human capital.
Confidential and proprietary information of Ingram Micro Inc. — Do not distribute or duplicate without Ingram Micro's express written permission _.
Copyright © 2003 Americas’ SAP Users’ Group Making a Profit with Customer Service David Baethke, Vice President, The Baer Group Wednesday, May 21, 2003.
Building Customer Relationship “Service is so great an opportunity for the company that our vision for the next century is that GE is a global service.
Annual Report Annual Report El mostafa Achar El mostafa Achar ACG2021,section002 ACG2021,section002.
Choosing Measures of Performance: Translating Strategy into Action v Why do we measure? 3Clarify and translate vision and strategy 3Communicate and link.
Unlocking Hidden Revenue in Current Customers Webinar: August 26, 2014.
Missouri Enterprise Helping Missouri Manufacturers Make More, Sell More, Earn More Missouri Manufacturer Survey: The Top Ten Things You Told Us.
Marketing Performance and Marketing Profitability Chapter Two M arket-Based Management, 4 th edition.
Part I THE BIG PICTURE Chapter 2: Strategy and Sales Program Planning.
2011 Eaton Corporation. All rights reserved. Eaton Business System Overview.
© 2008 IBM Corporation Challenges for Infrastructure Outsourcing July 29, 2011 Atul Gupta Vice President, Strategic Outsourcing, IBM.
© John Wiley & Sons, 2011 Chapter 16: Strategic Performance Measurement Eldenburg & Wolcott’s Cost Management, 2eSlide # 1 Cost Management Measuring, Monitoring,
REVENUE IMPACT OF OPTIMIZED NETWORKS Egbert Clarke Vice President International Business.
13-1 Information Technology Economics Information Technology: Economic and Financial Trends Internal IT versus outsourcing Expanding power / declining.
Cost Management Session 3. Overview Theory Exercise: 1.39; 1.42; 1.50;
Hosted by Achieving Best Business Performance Mark R. Willford, Partner Accenture.
A CMMI Level 5 Company w w w. z e n s a r. c o m : Zensar Technologies Analyst Meet : Business Process Outsourcing & Optimization.
Chapter 1 Concept and Context of CRM CUSTOMER RELATIONSHIP MANAGEMENT.
© SSPA and TPSA 2006 HIGH TECH SERVICES The Role of Service Innovation In the Economy’s Most Famous Product Sector J.B. Wood President and CEO Service.
© David L. Wells Putting the Business Back in BI Putting the Business Back in BI Dave Wells BI means “business intelligence” yet.
Operations and Supply Chain Strategy CHAPTER TWO Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
11 Lecture Enterprise Applications and Business Process Integration.
McGraw-Hill© 2000 The McGraw-Hill Companies 1 S M S M McGraw-Hill © 2000 The McGraw-Hill Companies Chapter 17 THE FINANCIAL AND ECONOMIC IMPACT OF SERVICE.
Attracting appropriate user funding in the context of declining public funding.
1 Strategic Meetings Management 101 Lynda Garvey. SMMC Strategic Meetings Consultant.
The Balanced Score Card Dr. Fred Mugambi Mwirigi JKUAT.
Reseller Live “ Selling IP Applications Alone Will Not Guarantee Success ” C. Don Gant VP Channel Marketing/Business Development.
Customer & Associate Engagement October 2008 NAW CEO Roundtable Dick Gochnauer United Stationers, Inc. President and Chief Executive Officer.
© 2014 IBM Corporation Smarter Workforce Services Business Process Innovation.
Chapter 4 Marketing. Objectives After reading the chapter and reviewing the materials presented the students will be able to: Describe how marketing segmentation.
Market-Based Management and Financial Performance Chapter Sixteen M arket-Based Management, 4th edition.
BALANCED SCORECARD ANALYSIS. What Is a Balanced Scorecard? A Measurement System? A Management System? A Management Philosophy?
© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialPresentation_ID 1 Cisco Capital TelePresence Financing & Messaging European Theatre For.
Lecture 3 Strategic E-Marketing Instructor: Hanniya Abid E-Marketing.
LogNet Information Technologies PLC May Innovative software company of customer experience solutions for multiple verticals Core products include.
Investor Conference March 2001, Rio de Janeiro 1 This presentation contains statements that constitute forward-looking statements within the meaning of.
What is Strategy? (Part Two). Key Concepts Managerial Cognition Business Model Stakeholders The Balanced Scorecard.
Chapter 3 The Purchasing Function. THE PURCHASING DEPARTMENT’S FUNCTION IS TO: The three most important elements of the purchasing department’s function.
Location.filemname.PPT 1 1. Customer-centric leadership Ownership of the customer-centered strategy exists at board level The company believes that focusing.
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Business Processes and Accounting Information.
Customer Relationship Management (CRM) Definition of CRM “CRM is concerned with the creation, development and enhancement of individualised customer.
September 24 & 25, 2008 Documenting Value to our Customers NAW – Large Company CEO Panel Discussion.
Operations and Supply Chain Strategy CHAPTER TWO McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
SaaS or a Customized Solution: Which is right for your recognition program?
5.06B Set Marketing Goals and Select Marketing Metrics (ways to measure) Entrepreneurship 1.
© 2017 SlidePlayer.com Inc. All rights reserved.