Friday, April 1, 2011

Service Roadmaps Are Important Too

Executive Summary:
Businesses that provide services rather than products are vulnerable to becoming edged out by competitors or obsolete.  If you operate in a service business, take time to make sure that your plans for the future of your services enable growth and protect against obsolescence.

The Rest of the Story:
In yesterday’s post we discussed some thoughts for making sure that product and technology roadmaps don’t get mired in details, but ensure a solid, progressive strategy that keeps the business pointed in a direction of future success.  Those of us who offer services in addition to, or instead of, tangible products should do the same.

It seems many times that service-oriented businesses demonstrate limited perspective for how to grow the business and are unprepared for the day their customers disappear.  Unfortunately, it happens.  Services are no less vulnerable to changes in technology or new competitors than are products.  Many times, though, we just don’t plan for it.

Commonly, we start our service business because we have an idea for a service that is valuable and not provided, or at least not provided in our area.  Our service is what it is, and our vision for growing and sustaining the business principally focuses on getting the word out and drawing more customers.

Sometimes, we start our service business in a competitive environment because we have a way of solving a problem or providing a service that is superior to those who already do.  In this case, we are focused on taking customers from an already defined market.  These service providers are the very threat to the former that a service roadmap, and a robust effort to develop one, can protect against.

Coincidentally, the latter case is no less in need of a long-term service evolution plan than the former.  After all, if the former responds, the game is on and both competitors will need to win and/or preserve their customer base by beating the other either with better service solutions, or better advertising.  It’s ugly, but common.

There is another threat, technology.  Sometimes technology makes services obsolete, shifts customers from services to products, or from products to services. 

Here is an example of a service that obsoletes a product.  Big in the news at the time of this writing is Amazon’s Cloud Player service.  It is a Web based solution that allows one to store his/her collection of digital music on the intranet.  Amazon also offers Cloud Drive, which allows one to store any kind of file on the intranet.  The product that becomes obsolete is the multi-terabyte external hard drive to store all of one’s pictures, music, movies, etc.

Similarly, the cloud concept or technology is threatening the data vault backup service.  The pre-existing data vault storage services that would back-up your hard drive information for you will need to adjust their service models, or their prices, or both in order to stay in the game. 

Another business model, which includes a complex interplay of services and offerings, that is changing because of technological development in communication service, is the television media business.  I have a digital video recorder (DVR), built into by satellite box.  I don’t watch commercials anymore.  The developing on-line TV solutions are driving the same commercial-free performance.  The television commercial services will need to change altogether, or go away.

I used to pay for pest prevention services for my home and yard.  Now, there is so much information available to me at my local nursery and on the intranet, and some very effective products available to me, I no longer waste my money on the service.  I can take care of it myself while doing the rest of my home and yard care, with no real extra investment in my own time.  Frankly, the service was a hassle, not a boon.

So, what does your long-term service roadmap look like?  Here are some thoughts to help you examine your service roadmap and evaluate your long-term business plan.
  1. The first step of your service plan should be to address the things that your current customers desire or need from your service.  These might include faster response, easier communications, simpler billing, more flexibility, etc.
  2. For a second step in your roadmap, look for other service offerings that you could do which are enabled by the fact that you provide the first service.  For example, a house cleaning service could also include minor home repair or maintenance, such as changing light bulbs, eliminating squeaky hinges, replacing furnace filters, changing batteries in smoke detectors, etc.  Why not?  The personnel are already in the home.  It could be a competitive advantage, or something that allows a higher charge.  These are the kinds of ideas that your competitors will use to leap you, or that you use to prevent their entry.
  3. Third, look for services that are not so related, but that you could also mastermind and offer with your current business.  Take the same house-cleaning service.  The same business skills could enable gardeners without any real change of business model.  The service could even begin by selling the gardening to existing house cleaning customers.  This is how you grow your business and reach new/other customers.
  4. The next step of your roadmap should be to examine what might become possible with new technology.  At the same time, take a look at what might become a threat and plan for that possibility.  This can be difficult.  The owner of a house cleaning service might not be savvy to the latest technological trends, and may not have a personal interest or obsession that would cause him/her to be so.  It might be worthwhile to engage someone who is.  They are available on the intranet.  Try searches related to “technology trend adviser” and “technology risk management.”  Perhaps some readers will have additional search suggestions, or links to offer.
  5. Finally, and also a bit difficult, make sure your roadmap has a plan to evolve with the evolving perceptions and demands of your customers.  If it suddenly becomes in fashion to hire services that provide a certain percent of revenues to deserving charities, the house cleaning service will want to provide a menu of charities to support with it’s service.  If hiring house cleaners becomes socially discouraged for some reason, that same service will want to see it coming and make a plan for that as well.

The above list represents a progression of planning and strategy.  Make sure that your strategy includes growth beyond just saturating a single market.  Take the offensive with regard to growing your offerings.  It is a good defense against those who would try to do the same thing better.  Embrace technology to help you be more responsive, more effective, more flexible, and easier to engage.

Finally and most importantly, you must have a financial and resource plan to enable your service roadmap.  If there are technologies you wish to employ, where will the expertise come from?  Will you learn it, or hire an expert, or contract?  Do you have the financial plan to do so?  If you need to increase your personnel’s expertise, do you have a plan to do that?  The most common mistake, and probably the most catastrophic, when it comes to developing roadmaps, is failing to put a financial and resource development plan with it.

We can argue whether the intranet solutions that businesses such as Google and Amazon provide are “intranet products” or services, but one thing is clear.  Those businesses, two very, very successful businesses, are relentlessly chasing plans to ever expand their offerings and garner more customers, and provide greater service to existing customers.   They show us how to succeed.

If you operate in a service business, gather your team and review your service roadmap.  Check your strategy against the list above and look for holes.  Make sure that you have a plan to enable that strategy.  If you don’t have a roadmap, get busy.  You won’t be the only service in town forever.  Embrace technological enablers, and be sensitive to your customer’s developing expectations.  Build a strong plan, enable that plan, and execute it.  You will succeed, perhaps even more than you first imagined.

Stay wise, friends.

1 comment:

  1. A very good example of a service that has been overcome by technology is the change in business for Blockbuster. With the intrusion of Red Box kiosks enabled by barcode and communication technology, and Netflix and Itunes whereby customers order streaming movies via the internet, customers are no longer going into Blockbuster stores to brows movies on a shelf. As a result, Blockbuster stores are closing and being replaced by Blockbuster kiosks, similar to Red Box. Unfortunately for Blockbuster, Red Box kiosks may have already claimed the prime locations for such.