Changing the Game with Compelling New Offerings

Executive Summary

A very successful service provider in the traditional, complex IT outsourcing (ITO) space wanted to accelerate revenue growth and market share with new IT management services for the small- and medium-sized enterprise (SME) market. Its several previous attempts at packaging and providing its legacy offerings for SMEs were only partial successes.

To arm the client with the knowledge it required to finally achieve success in the SME market, Everest Group first focused on the primary levers that deliver relevant customer value, many of which extend beyond the specific offering (e.g., customer adoption prerequisites, sales approaches, and provision of ongoing support). The Everest Group team also recommended new internal processes and an organization to support the market launch, ensuring key customer interaction points, internal alignment and incentive structures were in place to drive early results and momentum.

The Client’s Challenge

A Fortune 50 technology firm – with a legacy of selling complex service offerings customized to client specifications – wanted to streamline and standardize a set of its IT service offerings to deliver superior cost to benefit value to the SME market. While the fastest route to market appeared to be via a repackaging of its legacy services, its several previous and unsuccessful market launch experiences drove it to challenge its basic assumptions about the SME market. Thus, the client sought to build a strong foundation in determining: 1) what offerings and scope of work would deliver the greatest value to the SME market; and 2) how to structure service offerings to be sold through its preferred set of channels. The client also wanted to align with its corporate strategic and capital planning approaches that typically supported incremental rather than disruptive new offering development. 

Insight to Action

Everest Group instituted a two-part project to define prospect and customer value drivers and architect the internal requirements to ensure success of these offerings.

The firm began by interviewing CIOs in a wide range of small- and medium-sized enterprises to define their value drivers, considering not only the scope of work, service levels, and price points, but also the entire customer experience (including the sales and on-boarding process, ongoing service delivery and customer care/account management). Everest Group’s findings drove recommendations on the offering’s specifications, sales requirements, provisioning imperatives, delivery standards, and support needs.

Everest Group then worked with the client to map the customer requirements to internal processes. In doing so, the Everest Group team identified several gaps that were critical to the success of the new offerings. Recommendations included altering the offering development process to include customer input through trials and assessments, and creating an organization and incentive structure to ensure functional alignment and accountability. Finally, to maximize the potential of the new offerings in the market, Everest Group proposed a dedicated sales organization to reach out to appropriate buyers, identify needs, correctly position the offering, and set customer expectations.

Impact

As a result of this initiative, the client created an organizational structure that allowed it to incubate new offerings in an environment protected from its more mature IT service business model, reinforcing the control and accountability that is essential for navigating new offerings to success. Further, the client implemented an offering development process that more accurately addresses customer requirements, leverages a provisioning and delivery organization that is aligned to market success, and utilizes a dedicated sales force that is empowered to drive the offerings in the SME market. Together, these efforts have increased the first year service adoption rate for new offerings by 45 percent, while decreasing solution customization by 25 percent.