“Professional Services originally meant services offered in the services of Medicine, Law and such other fields. Today it has expanded and the breadth of definition has come to include Design and IT too. When we say Professional Services in the IT industry, majority of the people consider it as customization, project management, implementation, consultancy and such kind of things. This is an era where the concept of differentiation for ISVs is very essential, and it becomes imperative for them to differentiate their products. This is where Professional Services can play a key role”.
Starting with this quote from the moderator, the tone for this month’s Producteering teleconference was set, which focused on Professional Services being a potential differentiator for business success.
At the outset of the discussion, one of the participants discussed on how his company started working with one of their customers through a trial version of their product suite. Once the PS team got in, they observed that in their customer’s organization, there were several best-of-breed systems, which did not talk with each other and that was the main cause of their IT problems – not the need for another independent product focused on one particular area. As a result of understanding what was actually the need of the customer, the PS team was able to recommend and implement a solution which solved the customer’s integration problems, while earning much higher revenue for itself and bettering its relationship with the customer.
This interesting example was then highlighted with the fact that the Professional services revenues from this company was almost 60% compared to the revenues from sales. This trend is not something new and all PSOs are aware that they are making a huge difference to the top and bottom-line growth of their organizations – this was further supplemented by a quote from the moderator that 52% of IBM’s revenues come in from Professional Services.
During the discussion, one point that was brought up was whether Professional Services should be done by the organization (ISV) itself or should it be done by partners and resellers. Salesforce was cited as an example, by one participant, as one company whose partners were able to do many successful product implementations. However, a conflicting opinion to this was that unless your size and geo spread forced you to tie up with several partners, having your own Professional services team doing product implementation was valuable as your thinking and way of doing things can be directly brought to the customer rather than getting diluted by a partner.
Another important aspect of the discussion was of SaaS becoming main stream rather than a buzzword. While there still remains a concern of security in the SaaS model, many small and mid-sized companies, which cannot invest on expensive enterprise products, are now looking at transitioning to SaaS to reduce upfront costs and also shorten the time for product implementation. Integration e.g. integrating a project management suite with a CRM or ERP tool therefore becomes a key service, which ISVs have to provide as an add-on service, to become a differentiator in the marketplace.
The time has come for ISVs who do not want to adopt professional services as a key focus area for growth, to reconsider their decision, as PS has become a backbone of differentiation in the market. What they seem to have ignored for long is the fact that a product, in itself, is a service at a higher level. It targets and caters to the needs of the customers. And under this umbrella, ISVs can go far beyond implementation and integration to solve customer’s daily business problems.
Amidst this mind shift in the way ISVs stand as providers, it was unanimously concluded that professional services can be a potential differentiator for them and it can help them improve their products’ visibility, customer satisfaction, increase their revenues, margins and market share.
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"Online communities, iterative methodologies and software scalability" with Andres Camacho - Vice President of Engineering at Vinfolio 
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