Conference spotlights key issues in building professional services
September 25, 2002
Columbus, Ohio - Companies accustomed to adding new products in response to market demands find a whole new set of challenges when that new product is services.
How to best work through those challenges was the topic of a conference hosted by The Ohio State University's Fisher College of Business this week. Presenters and participants included a blend of managers, consultants and academic researchers who brought their varied experiences up for discussion at Fisher College's Pfahl Executive Conference Center on Sept. 24-25. The conference presentations will be made available on the Fisher College website, for a minimal fee, later this fall.
Setting the tone for the presentations was Thomas E. Lah, a management consultant and lead author of the recently published book, "Building Professional Services; The Sirens' Song."
Summarizing from his book, Lah said product companies decide to grow professional services:
to develop new sources of revenue and margin
in response to customers' request for their technology companies to provide complete business solutions
to gain more control in key accounts through relationship building
to gain professional references, which help propel future opportunities.
While these are the drivers of firms wanting to move into services, his analysis of a variety of firms' service performance suggests that few obtain the margins anticipated.
Product firms exploring this route need to "earn the right to ask for services business," said Jeffrey Sopp, senior vice president for corporate development at CompuCom Systems (CMPC), another of the presenters. The firms need to show what value their services will bring to the customer. That could include quantifiable cost reductions, friction-free procurement functions, fast problem resolution and honest, two-way feedback.
This requires tracking and reporting data that support the firm's statements of accomplishment and expertise. Sopp said that only 27 percent of such possible data is collected, and only 12 percent of it is actually presented.
Among his other points:
identify problems and trends before they occur, at both the individual and corporate levels
monitor performance to assure that the right product or service is delivered to the right person, at the right time
use tools to evaluate vendor-partners' performance
build and strengthen executive relationships through executive sponsorship programs
remember that data-based reports do not capture the 'people' issues; watch for positive and negative impacts of staff alignment.
Maria T. Gresham, PhD, a certified business transformation consultant in e-business strategy and change, described strategic and operations tactics for transforming a firm's organizational design to support consulting services.
Speaking from her experience as a consultant in IBM's Institute for Business Value, Gresham said:
aligning services around administrative ease is contrary to a services-based organization; rather, it should be aligned to support customer needs
organizational designs to support a services model require strategic and operational tactics
organization changes minimize the disruption in the transformation.
Steve O'Connor, who managed professional services at Silicon Graphics to profitability, itemized several key tactics that senior managers can use to improve professional service performance. Among those, executive alignment is the paramount issue facing the vice president of professional services at a product company. "Agreement on the professional services business model is the critical, and often ignored, first step," he said.
David Greenberger, department chair and associate professor of management and human resources, and Robert Heneman, associate professor of management and human resources, and other Fisher College faculty have been studying issues involved in building professional services.
"Our objective with this conference was to bring together practitioners and academic researchers for a candid discussion about the issues involved with building professional services," Greenberger said. "This is a space in which many firms are trying to move, but the level of discussion has not been commensurate with its complexity. The discussions that took place during this conference showed that the time is right for providing a forum for sharing experiences and research-based findings."
That is why Greenberger chose to make the conference presentations available online. "We hope to facilitate a continued discussion on this topic, based on research and practical applications, with tangible take-aways for the participants," he said.
Greenberger and Heneman have also conducted research on a related topic managing the virtual organization that is becoming more commonplace as firms move toward the project-based sharing of personnel and expertise. A book summarizing their findings on that research is to be published in October.
In addition to Lah, Sopp and Gresham, participants heard from professional services leaders at EMC, NCR, Pretium Partners, Logical USA, SARCOM Inc., and Legend Group Ltd., the largest computer firm based in China.
Cynthia Curtis, for example, discussed the recently announced partnership between EMC, a leading computer storage company, and Accenture an arrangement intended to prime EMC's movement into professional services.
This conference was developed through Fisher College's involvement with the AT&T Education Alliance, an AT&T Foundation-funded initiative launched in 2000 to support research, education, and the training of students in information technology.
Among conference participants were faculty from North Carolina A&T State University and Miami University in Ohio, two of the four other schools in the AT&T Educational Alliance. The schools will be incorporating components from the conference into their management education and information technology curriculums. Also in the alliance are the colleges of engineering and management at North Carolina State University and the Stevens Institute of Technology.
The conference was a bit of a home coming for Fisher College alumni as well: three of the presenters received undergraduate or MBA degrees from Fisher: Lah, Sopp, and Gresham.
For more information about the conference or professional services, contact Greenberger at 614-292-5291, or by e-mail at , or Lah at .