Thursday, November 26, 2015

Software Product Management & Design of Services

Most enterprise software product are often bundled with a set of services. For example SAP (ERP) or Banking systems need extensive services for customers to make full use of the software. So when we look at developing new enterprise software products, product managers need design the services that is offered with the product.

To begin with software products are essentially intangible products. Customers can only get the benefits of the product. Software services is even more intangible: It cannot be touched or seen - but it only can be experienced. Services cannot be stored in inventory or traded.

It is this intangible nature of services that pose special challenges for new product design.

Design of services for enterprise software product is very complex and very challenging. Design of services must be taken into consideration at the very beginning of product design during the Product Architecture phase. For example, questions such as:

1. Which functionality must be offered out-of-the-box?
2. Which functionality must be made user configurable?
3. How customers can configure the software product?
4. How do customers deploy this software for High Availability?

Splitting the product functionality into "Core Product Capability" Vs "Customer Configurable Function" is best decided at Product architecture stage. The key factor that determines this the split between product and services is "CUSTOMER EXPERIENCE"

Defining the customer experience is the first part of product and service design. It requires identifying precisely what the customer is going to feel and think, and consequently how he or she is going to behave. In case of enterprise software products - defining customer experience is not easy. Customers are often (& always) Global. So defining customer experience on a global, multicultural context is a very big challenge.

Customer experience is directly related to customer expectations. For services to be successful the customer experience needs to meet or even exceed these expectations.

However, In case of enterprise software products, customer expectations can greatly vary depending on the type of customer and customer demographic. This includes customer age, gender, background, and knowledge.

Managing customer expectation is done with product marketing. Product marketing teams must be involved right at the stage of product design to right messaging of the product and to set right customer expectations for each market segment.

It is highly important in designing the service to identify the target market the service is geared to and create the correct expectation.

Once customer expectations are understood, the service touch points must be designed to deliver exactly what the customer is supposed to experience.

Designing all Points of Customer Contact 

Enterprise Software Services need to have a high degree of customer contact. The customer is often present while the service is being delivered. The contact between the customer and
service provider is often the service itself. So for a service to be successful this contact needs to be a positive experience for the customer, and this depends greatly on the service provider.

Unfortunately, since software services often have many people involved in multiple service touch points, there can be great variation in the type/quality of service delivered.

The quality of service varies greatly depending on the skills of the service provider. This could be the front line customer support engineer, or an on-site deployment engineer.

To ensure that every service contact has a positive experience for the customer, all employees
of the service organization need to have training that encompasses a great array of skills that
include courtesy, friendliness, and overall disposition.

The service company also needs to structure the proper incentive system to motivate employees. For example, studies have shown that employee performance is motivated more by monetary incentives rather than by their belief in the idea of the service.

To ensure high quality of service and high consistency and reliability of service, one also needs to invest in right set of tools/process/systems to aid service employees. Having the right process, procedures and SLAs for all service touch points is critical for success and must be addressed as part of service design.

Design of Service Offering

A really successful service offering do not happen spontaneously. It needs to be carefully
thought out and planned, down to every employee action. To design a successful service we must first start with a service concept or idea, which needs to be very comprehensive.

In Enterprise Software products, there are three elements of service package:

  1. The Packaged Software. 
  2. The Business Benefits.
  3. The Psychological Benefits

The packaged software is the first tangible aspect that customer experiences. A good product sets the right stage for positive customer experience. A good product is often characterized by:

  • Ease of purchase/procurement
  • Ease of install & deployment
  • Operational Stability & Reliability
  • Ease of Upgrade or Retirement 

Business benefits are what gets measured by customer. Is the software delivering the expected outputs in terms or productivity or cost savings or automation etc. These can be experienced, observed and measured.

This implies that when customer has an issue or needs a specific service, the service or the issue must be delivered efficiently and seamlessly, without any disruption to product usage. It is therefore highly important that the design of the service specifically identify every aspect of customer issues/needs.

The psychological benefits include the comfort, assurance and well-being of the customer. Customer who is buying & using the enterprise software product should feel good about it. For that reason, customers buy enterprise software from well established vendors such as HP, IBM or EMC or SAP etc., - even when there were other alternatives from smaller companies or even free open source software.  To add to customer's psychological benefits, vendors often offer services in multiple packages: Gold/Premium or Silver/Regualar class of service. The service package needs to be designed to precisely meet the expectations of the target customer group.

Once the service packages are identified, it must then be translated into detailed service design, such as SLA standards, employee training and motivated to precisely understand and satisfy customer expectations.

Unfortunately, there is no winning formal for successful service design. Service design  should support the product and provide business value to customer. Today, there are three broad options for service design:

  1. Customer Self Service
  2. Co-design Service offerings with customer or partners
  3. High Contact Services

Customer Self Service  

One way to improve customer service experience by service design is to substitute people with technology. Technology must be substituted for people wherever possible to provide service consistency and take away the dependency on tribal knowledge of service employees.  Some examples of the use of technology include the following:

1. Customer Service Request Portal and an automated ticketing system to alert when a customer request comes in.
2. Use of self-service portals where ever possible.
3. Standardized and open knowledge base or Wiki pages
4. Product user groups & forums
5. Use of Social media to interact with customers & users

Some examples of companies using extensive customer self services are: SolarWinds, Amazon Web Services, Microsoft Azure, Google Cloud, OpenStack/OpenSource software

Co-Design of Services with Customers & Partners

Another good way to improve customer experience is to co-design services with customers and partners.

In Enterprise software business there are several IT service providers such as IBM, Accenture, Dimension Data, Infosys, Wipro, TCS, etc., This ecosystem of IT service providers working with software product companies and customers can be leveraged to improve customer service and enhance overall customer experiences.

For example, a software deployment services team can be co-located with customer and address all software deployment issues. In another case, customer can choose a global IT service vendor to provide remote support & services to lower their costs and also get 24x7x365 support.

Having customer or an IT service provider involved in designing the service for enterprise software leads to higher levels of customer satisfaction and provides customers with a choice of service providers. For example, today a car manufacturer can choose services for his SAP deployment from a range of IT service partners.

Fully provided Services 

This type of service offerings, enterprise software product vendor will provide end-to-end services along with the product. Software vendor will provide a complete service offering so that no customer employee will have to work on the enterprise software, instead customer will just get all the service benefits.

The best example of this is IBM. IBM offers complete services around its enterprise products and will have IBM employees work on the software and provide only the business output to the customer. IBM employees know  customers business process and provide only the required inputs to the customer's business processes. All the internal details of service and product delivery will not be exposed to customer.

Closing Thoughts

Developing new enterprise software involves designing customer services. This involves defining what the right customer experience must be, and then designing services to deliver that desired customer experience. There are three main options for service design: 1. No touch - i.e., self-service by customer, 2. Medium Touch or co-design & co-delivery of services. 3. High Touch or Fully provided services.

Choice of service design impacts product pricing and is deeply ingrained into product strategy. When developing enterprise software, customer Services must not be taken lightly or taken up as an after thought.

To build a successful product, services must be designed at the same time as product design.

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