Strategies For Growing A Great Services Business

By Julie Giera,

Of the top 35 global IT vendors, 22 are either services providers or product companies with a large services business like IBM. This shift to services has been accelerating over the past five years among technology vendors looking to drive recurring revenues, deeper customer relationships, and additional channels for their products. Building a great services business is tough for many technology vendors, because the things that contributed to their success as product companies are the very things that can be their downfall in services. Forrester has identified the top ten strategies technology vendors can employ to build a great IT services business.

1. Stick to services that closely tie in to your products’ strengths.
2. Organize for services separately from products.
3. Hire experienced sales people.
4. Limit the services portfolio.
5. Automate the proposal process.
6. Market your message through multiple channels.
7. Limit risk in very large contracts.
8. Develop the channel and deal with conflict early.
9. Weigh a direct service model against a subcontracting arrangement.
10. Know your value proposition: Wal-Mart or Tiffany’s?

Source:Forrester Research

Lessons In Enterprise Web 2.0 Adoption From The BBC

Today, the BBC has 23,000 bulletin board users, about 4,000 wiki users, and 400 to 500 people who are blogging. The company is getting enormous value out of this, but it didn’t happen overnight. The BBC has been experimenting with Social Computing for a long time; they built internal networks using forum software before blog tools came to be. Lessons learned at the BBC:

• Enterprise Web 2.0 can be the catalyst for a more collaborative business environment. The BBC had done a lot of work to try to create a more collaborative work environment. The BBC World Service, for example, has 47 language services. People need to work together who come from wildly different backgrounds (cultures, languages, etc.). How to make this happen? As it turned out, the BBC’s internal forums, which only cost the company about 200 pounds, got the company to be more collaborative than the more formal initiatives did.
• Experiment, start small, and make sure ownership is clear. Using Social Computing tools at work is very different from the way most of us are used to working. Managers, for example, may need time to get used to a flatter kind of environment, where people are off doing their own thing. One thing that helped at the BBC was that the forum environment was collectively owned; this helped people take responsibility for how it was used.
• Trust breeds trust. The BBC found that when people are given responsibility, the right tools, and a little coaching, most of them will do the right thing. And as people gain experience with Social Computing tools, the value of their efforts increases. While Semple didn’t get into this in his story, I’ll add here that creating a solid policy about appropriate use of tools like blogs, wikis, virtual worlds (a policy that has teeth) — and educating the workforce about that policy — can go a long way toward helping employees and management feel comfortable with what is going on.
• Go where you’re not quite comfortable going. This is the source of innovation. At the BBC, employees were allowed to post on internal forums about anything they wanted to. Someone started a conversation about the pros and cons of being single. This evolved into something awfully close to a dating service. Managers, as you might imagine, were cringing. But before long one of the producers came to Euan Semple saying he was about to do a program on being single, and the employees who had participated in the forum about dating had done half the work for him. Great example of something that didn’t seem business like ending up delivering true business value.

Source: Forrester’s blog

Building Effective Communities

By Daniel W. Rasmus

Question

Why do virtual communities on some web sites work and others do not?

Answer

The success of a community is based on the creation of complex social structures that require a thorough understanding of constituencies in order to work toward a directed business purpose. Communities usually form naturally, given an open infrastructure, such as those found in Web-based communities and newsgroups. Although the membership of a business-oriented community may not always be planned, the community itself must have an initial plan that answers several questions in a positive manner in order for the community to succeed.

The success of a community must be determined not by a generic external criteria, but by internal goals. If the goals of the community are met, the community is successful, even if it is eventually dismantled. Activity within the community will be determined by the perceived needs of the community to share information and the value of the virtual community relative to other information sources and support organizations available.

It is important to note that like physical communities, virtual communities may be cyclical or temporary, but if this is understood at the outset, success is determined within these frameworks, so periods of sparse participation are not seen as failure. Managers must resist using reporting features to berate communities for lack of activity, but should rather encourage them to publish their frameworks and expectations so that those coming to a community clearly understand its purpose and its agreed-to social norms.

Communities must also define type of community they are as part of their formation. A community of interest is very different than a community of task or a community of practice. A community of interest may have social interests as a primary driver, while a community of task (sometimes called a community of purpose, or just a team) is focused on execution of a particular assignment. Communities of practice are usually long-term learning and sharing bodies.

Finally, communities must deliver on expectations or they will dissolve rapidly. How quickly responses are made, the level of response, the number of responses and the appropriateness of a response are common characteristics related to these behavioral expectations.

Web community organizers must remember that Web communities do not differ much from physical social communities. Virtual communities rely on purpose and relationships (which embody trust, identity, safety and a sense of belonging) in order to succeed – other questions and factors are designed to assist in creating an environment where members with a trusted relationship can fulfill its purpose.

Questions that must be asked before starting a community

• Is there a natural constituency that will be attracted to the community, at least initially, so that the community has a chance for formation?

• Does the community have a role within the context of the larger organization?

• Do the participants have sufficient technical competency to use the community tool?

• Does the community have a sponsor or leader that can facilitate the formation of the community?

• Does the community have an agreed-upon charter and purpose? When the community starts, does the constituency agree to the charter? This point leads to questions of appropriateness of membership and making sure the community continues to meet its purpose by maintaining relationships only with members that are not detrimental to the purpose.

• Does the community understand the type of community being established?

• Have the community members agreed upon the value proposition for the community?

• Does the organization permit or encourage participation by giving employees sufficient timeto participate in the community?

• Has the community published its agreed-upon purpose, expectations and social processes so others wishing to join the community can be aware of these agreements before joining? Does the community augment this with historical perspective, such as publishing accomplishments, agreements or insights?

• Do the members of the community trust that the membership will continue to fulfill agreements, meet expectations and maintain confidences?

• Do the members of the community have a persistent identity?

• Does the community create a sense of belonging?

• Does the member feel the community is a safe place to express opinions?

Examples of community purposes that lead to successful communities:

• Communities focusing on learning through exchange of lessons learned, best practices and success stories.

• Communities that extend learning into a practice-based knowledge-sharing environment where people within a knowledge domain come for not only learning, but for social interaction, policy setting and other business functions.

• Event-drivencommunities that focus on a transition to or from something or the accomplishment of something. Y2K communities are a good example of this.

• Communities that are part of a larger offering such as those that connect members of a conference after the conference, or those associated with a subscription service.

• Functional or skill-based communitiesthat provide value by answering questions in a timely way.

• Customer feedback communitieswhere customers see value in influencing the future of product or service development.

• Populations that share attributes or perspective on an issueusually drive communities of interest.

 

(A Forrester research)