Marketing of Services

1. Marketing of Services

2. Marketing of Services • Understanding Services • Enterprise IT Services and Categories • Market Motivators and Influencers • Delivery, Pricing, Alliances and Service Level Management • Account Life Cycle

3. What is a Service? Classic definition: Something the user does not own but experiences and benefits from From the Seller’s Perspective: A service company provides its people to others to create intellectual property From the IT perspective: Repeat effort for every new customer / requirement Another perspective: Comes with people

4. Enterprise IT Services • Application Development and Management • Infrastructure Management • Enterprise Application Implementation • Enterprise Integration • Business Process Management • Technology Consulting • IT Enabled Services • Business Process Outsourcing

5. Service Categories • Vertical Segments • Insurance • Banking and FS • Retail • Manufacturing • Telecom • Life Sciences • Pharma • Media and Entertainment • Logistics and Transportation • Enterprise Technology Solutions • Migration • Infrastructure Management • Integration • Application Development and Management • Application Rationalization • Organizational Domain Specific Solutions • Compliance • Security • Governance • Collaboration • Business Process Management • Business Intelligence and Data Warehousing • Business Process Specific Solutions • Accounting • Customer Relationship Management • E-Commerce

6. Market Motivators • Business Scenarios • Merger and Acquisition • New markets • Competitive advantage • Financial targets • New line of business • Realignment of business goals • Process inefficiencies • New business needs • Cost Savings • Integration • BPM • BPO • APR (Apache Portable Runtime) • Quantifiable Value Addition • EA Implementation • Consulting • Best Practice • Legacy migration • BPM • BPO • Consulting • APR • EA Implementation

7. Business Decisions • Cost-Benefit? • In-house or Third Party? • Stay or Migrate? • Standard Product or Custom Solution? • Integrate or Replace? • Fix or Replace? • Be Flexible or Rigid? • Stick to known or try something new?

8. Delivery Typical Engagement Project 1 Project 2 Project 3 Onsite Resources Offshore Resources Onsite Resources Nearshore Resources Nearshore Resources Offshore Resources Global Delivery Model

9. Pricing models Vendor Risk Client Risk • Time and Material based Pricing • Fixed Pricing • Performance Based Pricing • Predictive Pricing Very Low Very High Low High High Low Very High Very Low

10. Service Level Management • Development of and Adherence to Service Level Agreements (SLA) • Monitoring of Quality of Service (QoS) • Assignment of Key Performance Indicators (KPI) • Potential problems can be identified (such as gradual performance degradation) • Service roadmaps can be created • Support plays a key role (L1, L2, L3, L4)

11. Alliances and Partnerships • With ISVs (As implementation partners) • With OEMs / ISVs (Original Equipment Manufacturer, As Consulting partners) • With ISVs (Product Engineering) • With other service providers (As resource augmentation partners) • With Hosted Service Providers (As Application development partners) • With platform vendors (As application development partners) • With any other IT product / service vendor (As support partners)

12. IT Services are big business • Dec 2007: Prudential, TCS sign up for $1.5bn deal • Jul 2008: Aviva strikes $1bn BPO deal with WNS • Sep 2008: Accenture signs $550mn deal with Bristol-Myers Squibb • July 2007: Infosys, Philips sign $250mn BPO deal • Jan 2008: Bharti Airtel, IBM Signs $150mn Deal • Jan 2009: TCS leads race for Sony's $100mn outsourcing deal

13. Account Life Cycle Multi-year contract: $ 100 mn Strategic Engagement 1000 resources $ 22 mn Year 7 800 offshore + 200 onsite Multiple projects across org. 150 resources $ 5.5 mn 100 offshore + 50 onsite Year 4 Weighted average revenue per resource = $ 60,000 Weighted average revenue per resource = $ 80,000 Offshore leverage Increase in project size 50 resources $ 2.1 mn 25 offshore + 25 onsite Year 2 Weighted average revenue per resource = $ 80,000 Single Project 20 resources $ 1.6 mn 5 offshore + 15 onsite Year 1 Weighted average revenue per resource = $ 100,000 Profitability of account

14. Discussion • Possible challenges? • What role can the IT Service Provider play? • Entry point to initiate Account?

15. Focus • Total Quality – quality driven product, CMMI, ISO • Customer satisfaction • Long-term relationship • Managing channel partners • Strive to be leaders in global market • Helps firms to get maximum returns in minimum time • E-marketing

16. Services • Customer software development • Consulting • Web designing/redesigning • Web portals • E-marketing • Outsourcing • ASP • ISP • BPO • KPO • ISV • APR

17. Thank You

18. 10 EA pitfalls that a real EA implementation might experience • Doing EA just for the sake of EA • Weak political skills of EA lead • No measuring and selling of EA • Lack of short term outcomes • Not enough involvement in SDLC • Missing focus on Information • Buried under business processes • Missing PMO / Finance control • Wrong location in hierarchy • Spending time on frameworks

19. Managing Channel Partners • Macro trends • Strategies for success • Understanding the end-customer buying process • Restructure the economies of your channel partner • Lead from top

20. Evaluations should be conducted yearly and include both quantitative and qualitative assessments. Quantitative measures can include the distributor’s purchase patterns, pricing abilities, and market share. Qualitative assessment can include the strength of the distributor’s management, the effectiveness of their growth plans, and overall customer experience they offer.

21. Books • ‘Marketing of Information Technology’ by K Venkatesh • ‘Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers’ by Geoffrey A. Moore • ‘ In Search of Stupidity: Over Twenty Years of High Tech Marketing Disasters’ by Merrill R Chapman