Improving Product Implementation “Density”: 10 Considerations for Your Professional Services Business

With the increase in software/hardware product complexity over the past 5-10 years, we have increasingly seen technology vendors grapple with their Professional Services (PS) organizations’ ability to deliver profitable product-related implementations. Within many of our clients’ Services organizations, we have noticed three distinct project dynamics at play which have adversely impacted Services economics and customer time-to-value:

• High volume of smaller engagements (more than 70-80% of product implementations can be $50,000 or less)
  
• Projects are being delivered over extended timelines (can range anywhere from 9 to 18+ months) – notwithstanding product complexity and scope
  
• Projects are often delivered at an uneven pace and in “stops and starts” – creating the potential for errors, re-work, and the loss of momentum and client commitment

The impact of these dynamics are far-reaching across the business (beyond Services):

• Delayed customer time-to-value in realizing a return on technology investments
• Lower customer satisfaction as customer resources are tied up om in-flight projects
• Opportunity cost in delaying the next sales event, or product/service add-on, if the customer has not yet implemented what they have already purchased
• PS consultants stretched thin juggling numerous projects, negatively impacting utilization and morale, while making resource staffing complex and inefficient

While each product suite and service organization is unique, we have observed some common issues which negatively impact project and Services profitability. In our view, there are 10 key pitfalls every PS leader should be mindful of when targeting improvement areas for Services delivery:

1. Services aren’t involved early enough in sales/contracting process (e.g., projects get “thrown over the wall” for PS to react)
2. The implementation/delivery methodology is not well documented, standardized, and/or universally adhered to
3. There is a high degree of customization as opposed to more standardized, time-boxed, and/or packaged offerings
4. Service offerings are not positioned, packaged, and/or scoped correctly to align with resource skill mix and economics
5. Customer expectations are not properly aligned across the handoff from Sales to Service delivery
6. Products and/or engagements are not designed to leverage remote delivery capabilities
7. There is a prevalence of a “star” or “hero” mentality – projects can be delayed or put on hold while waiting for the “best” resource to become available, or a highly talented resource can be stretched thin juggling too many projects (in too much demand)
8. Project Manager and/or consultant work load is too high (e.g., PMs/consultants working too many projects at one time)
9. Delivery roles are too specialized or are defined too narrowly, requiring numerous handoffs during the implementation process
10. There is a lack of transparency and standard reporting around project economics at the Project Manager and Executive levels

Proactively addressing these issues falls under what we consider improving or driving Services “density”. Combining and optimizing a number of delivery-related levers (e.g., engagement load, delivery methodology, resourcing/staffing) can significantly impact project and overall Services economics. Our clients have seen acceleration of time-to-value (both for their customers and for recurring revenue streams/opportunity new add-on sales) and a 15-20% reduction in project delivery cost. The illustrative example below highlights the potential benefit of improving PS density across a 12-month project implementation cycle:

Click on image to enlarge

We continue to advise our clients on improving these project delivery issues and expect that the same dynamics may be prevalent at other technology companies. If your product implementation teams have experienced similar issues, or they have found creative solutions to move past them, we welcome your perspective.