Small Service Provider Strategy (Part 1)
By Laurent Duenas, September 28th 2013
How can Small Service Providers (SSP) find the means to grow with ITSM?
ITSM as a mean to get leverage for growth
This article explores the possibilities to use ITSM as an accelerator for business growth. It tries to decribe majors question marks and provides true tips, answers and perspectives to SSP founders.
Who are they? What are their needs?
They are software editors in SaaS (Software As A Service) mode, Infrastructure Service Provider in Cloud mode, small actor of BPO (Business Process Outsourcing). Topics of this article address also other conventional service providers such as Help-Desk, Engineering and Maintenance companies. Generally they have found their first commercial success. Their offering is recognized by a regional clientele (or very confidential one). The wish of their founders is to grow, albeit this is their biggest difficulty. To attract more customers, they have to show their ability to manage more activity requests while respecting service level expectations. Without a deep mutation from a start-up to an industrial stage, they cannot inspire confidence nor be “trusted”. This image of Small Service Provider (SSP), stuck to their skin, is difficult to be removed without a structural change visible from outside.
SSP founders are conscious that industrialization is vital for their growth and for their survival. If the new economy is a new field of opportunities, it is also an area of hard competition. Today, strategies of mid and large companies are more likely to be based on light or agile organizations. They look for high flexibility indispensible to adapt to the constant variations of their market. SSP offering “end-to-end solutions” charged in a “pay-per-use” mode respond perfectly to this expectation. These new markets, largely supported by the Cloud technology, have attracted numerous actors. In the western world, the number of SaaS players is multiplied by 3 every year. The marketplace is becoming plethoric and customers wonder about the level of trust they can have with new players still being fragile and immature to their eyes. SSP founders know that their growth depends on their ability to demonstrate their capacity to take up the challenge.
Note: this article focuses on Small Service Providers needs for industrialization. Other capabilities are obviously mandatory and should be mentioned to list exhaustively all components required for success (as finance capacity, sales capabilities, R&D, etc.). It is not the aim of this article.
Which issues have SSP to deal with?
Their difficulties turn around 3 primary issues:
► To give an image of being industrialized
► To increase their production capacity
► To be differenciated from their competitors
The image of an industrial provider
It is about being trusted by potential customers. A SSP must re-establish confidence level of its industrialization and the quality of its services. Prospects looking for new services, still tend to choose the less risky provider. It is much easier for larger or established providers to defuse these doubts. The SSP has to prove its capability to do it. For him/her, it is important that each contact opportunity such as customer presentation, demonstration of his/her industrialization level: process rigor, tooling maturity, team performance, etc., is used to make this demonstration in order he/she can be trusted.
Increase the production capacity
Since it is trusted, the difficulty for the SSP is to respond to the rise of the customer portfolio. The SSP has to rapidly increase its production capacity to handle the volume of activity. It cannot continue to work in the traditional manner, following habits from the beginning and consistently being driven by a start-up culture without any reflection (this would be an obstacle for its development). Start-up culture often refers to a way-of-working based on individualities (as opposed to structured organization and process), where performance rely more on best efforts. This cannot let a rapid workload scale-up while maintaining service levels. The organization must mute to a very Supply-Chain using concepts as multiplied production lines, production flexibility, continual controls, tight stock management, etc.
To be differentiated from competitors
To outdistance the most dangerous competitors, the SSP must show its ability to provide additional value. We often think that it should base its difference mainly on the nature of its services, its costs and its flexibility. It is true, but not all. It must show it does better at comparable services. It must compensate its size and lack of notoriety with a better service. It must stand out from its competitors with its ability, on the long run, to secure its service provisioning; to guarantee its prices (even to diminish them); to handle incidents and limit their impact on customer’s business activity; to sustain the growth without sacrificing the level of services delivered ; etc. That is the challenge the SSP has. Succeeding in it, It has a real competitive advantage by being able to prove that its services rely on industrial processes and tools definitively superiors to its competitors.
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