Small Service Provider Strategy (Part 3)
By Laurent Duenas, March 5th 2014
SSP strengths can be their vulnerability
In part 2, were presented ways for a Small Service Provider to show its indstrialisation level and its ability to welcome high volumes of service activity.In this article we switch to the natural competences of SSP founders. These competences are their power source to set-up their business from scratch, but they also lead them to uncertain path - as the photograph below shows.
Their main skill is their commercial capability
TIf we had to classify the top-3 skills of a Small Service Provider, what would they be? What makes the strength of a SSP it is, among the first ones, its sales capability. Particularly in its start-up stage, it is its competence n°1. Be able to find new customers; be capable to convince customers and to close deals; take care of the customer’s relationship and keep a unique intimacy with decision-makers in order to exclude all potential competitors; all are advantages to make a new company emerging from nothing and be viable. In companies with strong technological features, the technical level of design and implementation teams is often the skill n°2. When this high level of competence is recognized from customer’s technical teams, a confidence climate is automatically established between them. And when it is linked to skill n°1, it makes a winning formula to get new customers faster and with great effectiveness. At pole 3, come the necessary skills required for the company survival. Those necessary to retain customers for long duration relationships, surpassing difficulties and providing satisfactory deliverables; those that keep the company away from cashflow shortage; those that make the SSP able to grow and multiplying its delivery capacity; those that permit to innovate and to extent its own market share through sustainable growth. Skills n°1 and n°2 are frequently the particularity of SSP founders’ personality, and they feel at ease to manage them. For the 3rd one, it is far from being natural. It is needed a structuring approach to carries out the start-up organization to a more industrialized model, such as ITSM can do.
To have been intervening in several IT Services companies at their post-start-up stage – I mean companies that have found their clientele and that have grown up to 50 (even to 100) employees – I had the opportunity to observe that N°1 and n°2 skills let them to reach a commercial success with an impressive ease to carry out results. But I also saw important risks of plunge, instability, or a high difficulty to keep customers satisfied, or to keep the size of the company at the same level due to irregular income. Whatever their activities are engineering, integration or consulting, whatever they are specialized in technology or in organization management, aside their strong expertise, an inability to deliver reliable and professional services is often revealed.
► I saw companies at the cutting-edge of technology in Cloud and virtualization domains being able to sell huge and expensive projects one shot, with high value-added for customers. But since the project has been started, these companies could not provide reliable services and they ruin the customer’s confidence necessary to transform their first hit into a durable relationship; they rapidly not became eligible for further outsourcing services that would take the company to recurrent and secured revenue. They just have taken advantage of a flash-in-a-span and have been stopped in their impetus.
► I also witness companies being able to launch new technological offering, in domains they were just exploring, within a very short timeframe and giving a strong impression of expertise to their prospects. But passing the first announcement or beyond the first experience with one customer, they were not able to massively deliver this offering to the market due to limited resources, a lack of delivery capacity, and quality insufficiency. For these providers, they could not leave the hand-crafted stage and the profits could not rise.
► Many Small Providers organized around “guru” individuals are constrained by their biggest customer because it requires the guy who sold them the solution – or simply they know who is the best guy of the company and only wants him/her- and are disable to sell or to deliver their services to new customers, and cannot grow because they were not able to establish a delivery model going further individuals and relying on the whole organization.
ITSM is vital for these enterprises. ITSM provides the structuring and the mandatory rigor to get customer satisfaction and loyalty. ITSM is a full set of best-practices in Service designing and Management giving the means to establish industrialized processes and tools, indispensable for reliable and constant service delivery, at the expected quality level and capacity. ITSM is an inevitable solution for SSP to grow and to not destroy what they just have built before, or to avoid the eternal running-ahead feeling without consolidating company’s foundations.
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