Lack of service portfolio management can lead to a wide operational gap in services organizations. This can have a major impact on your business. Find out how to fill this gap and strengthen your company. Many service organizations have a large operational gap. This can have a serious and costly impact on your company’s bottom line if it is not addressed. As you can see from the title, this gap is caused by a lack of service portfolio management. Let’s take a look at the reasons this is important, how it can impact your business and how you can prevent it from happening to your services business.
Time to look beyond the status quo
Let’s take as an example the typical product company. The dynamic that exists between the different functions is illustrated by product management sitting at the center like a quarterback. Product management is the glue that keeps all areas of the business in line with the needs of customers and the market. It all sounds idyllic, right?
What happens to services businesses? You don’t usually have a traditional product manager if your people (i.e. delivery team) are your product. Instead, you have delivery, sales, and marketing. Who is in the middle of all this, running interference and maintaining your alignment strong? The gap is usually not filled by one.
Even if your company has someone who is responsible for your services, which most companies do, they are usually focused on operations. They are not out there looking at customers, identifying needs, and then creating a strategic roadmap that details the plans for building a portfolio of services. They are more tactical and tend to be focused on management (e.g. they think operationally).
Filling the gap: Service Portfolio Management
A service portfolio manager is a completely distinct position. This is a rare and wonderful species in today’s business world. This person thinks differently from someone in operations and acts essentially as a product manager of services. Without them, your business will lack the foundations of collaboration, alignment, and information across all your functional areas. You can have a huge impact on your revenue organization by having them.
How does a company fill this gap? It’s not as easy as it sounds, but it’s possible and well worth the effort. These are some key points to remember as you begin to fill your service portfolio management requirements.
1. You should know that hiring one person won’t solve all your problems.
It can be difficult to find a service portfolio manger. This is a rare position in services, so you may need to tap people with product management experience. Even if you’re optimistic and find and hire someone with experience in service portfolio management, there are still things to do. While hiring them is a great step in the right direction, there are still many things you need to do to align your offerings and grow your revenue.
It is important to remember that you cannot simply assign this work to an existing employee. They will be too busy with their daily tasks to give it the attention it needs. And they may not even have the skills necessary to succeed. It requires someone completely new.
2. Know where you stand in terms of go-to-market maturity
As an organization grows in alignment and maturity of people, processes, and tools, there are five stages: Opportunistic. Repeatable. Scalable. Sustainable.
Moving from one product to the next not just increases customer lifetime value, but also lowers the cost of customer acquisition. It can dramatically transform your revenue, which should be the ultimate goal for your entire business. It depends on your ability to move from one stage of the business to another. How does this relate to service portfolio management?
Many service companies have difficulty transitioning from the Repeatable stage to Scalable, which is basically from delivery to offering manager. They don’t have the ability to perform this function within their company so they put these expectations on sales, marketing, or their delivery team. These resources don’t have enough skillset or the background to do this work so it doesn’t happen.
Marketing and sales are still maturing but don’t get input from their delivery partners about market, services, customer expectations, and the value they’re creating. The result is inconsistent revenue, which they don’t like.