There is a wide operational gap in many services organizations, and it can have a significant and costly impact on your business if it remains as-is. This gap, as you may have guessed from the title of this article, is a lack of service portfolio management. Here’s a look at why this matters, the impact it can have and how you can ensure your services business doesn’t suffer from the same.
Time to Look Beyond the Status Quo
To illustrate the issue, let’s consider a typical product company and the dynamic that usually exists between the different functions, with product management sitting in the center like the quarterback. Think of product management as the glue that keeps all the areas of the business aligned internally, as well as externally with the needs of the market and customers. This all sounds idyllic, doesn’t it?
But what happens in services businesses? If your people (i.e., delivery team) are your product, you don’t typically have a traditional “product” manager. What you have instead is delivery, sales and marketing. But who's in the middle of it all, running interference and keeping your alignment strong? Typically, no one—hence the gap.
Even if you have someone in charge of your services, which almost every company does, this person is usually focused on operations. This means they’re not out there looking at the market, talking to customers, identifying current needs and then putting it all together in a strategic roadmap that outlines the plans for developing a services offerings portfolio. Instead, they come from a tactical role and tend to have their sights set on management (e.g., they think operationally).
Filling the Gap: Establishing Service Portfolio Management
A service portfolio manager is completely separate—a wonderful, but highly rare, species in today’s business world. This person thinks differently than someone in operations, acting essentially as a product manager for services. Without someone in this role, your business will be missing the building blocks of collaboration, alignment and information across all of your functional areas. With them, conversely, you can experience an enormous impact on your revenue organization.
So how does a company go about filling this gap? Unfortunately, it’s not as simple as it might sound—and yet it is doable (and worth it). Here are keys to keep in mind as you begin the process of filling your service portfolio management needs.
1. Know that Hiring One Person Won’t Solve All Your Problems.
It’s an uphill battle to find a service portfolio manager. You may even have to tap people with product management backgrounds in order to serve this purpose because it’s that uncommon in services. But even if we’re being ultra-optimistic and you somehow find and hire a magical person who has experience as a service portfolio manager you still have work to do. Finding and hiring them is a great first step, but there’s more to be done in order to align your offerings and achieve sustainable revenue growth.
It’s important to note, as well, that you can’t simply put this work onto an existing employee. They’ll be too caught in their own daily tasks to give it the attention it deserves, and they likely don’t even have the skills required to be successful. It requires someone new and separate.
2. Know Where You Are in Terms of Go-to-Market Maturity.
As an organization increases in its alignment, as well as its maturity of people, processes and tools, I believe there are five different stages: Opportunistic, Repeatable, Scalable, Sustainable and Optimal.
Progressing from one to the next not only increases your customer lifetime value but also decreases the cost of customer acquisition. It can drastically transform your revenue, which is the ultimate goal of your entire business. But it’s dependent on actually progressing from one stage to the next. So, how does this tie into service portfolio management?
Well, many service companies struggle to transition from the Repeatable stage to the Scalable stage, essentially from delivery to offering management. This is often because they don't have that function in their organization and so instead, they try to put those expectations on marketing or their delivery team or sales to figure out. But those resources don't have the background or skillset to do this work, so it doesn't end up happening.
Instead, marketing and sales continue to mature but never receive input from their delivery partners about the market, the services, what's going on, customer expectations and the value they’re creating in the market. So, the revenue that’s driven is inconsistent, and they never end up reaching scalable or sustainable growth. The point here is that, if you had a portfolio management team, they would be providing and informing your revenue functions about all of this and helping you progress from stage to stage.
3. Prioritize Alignment & Follow-Through
It’s worth noting that your portfolio manager must be able to measure and manage alignment within your organization in order to keep things moving in the right direction. An individual's ability to manage this across all parts of the organization and be able to influence it all the way to the top leadership is an essential skill set for who you choose to fill this role.
Once you have someone in a service portfolio manager position and know which stage of maturity that you’re in, it’s important to continue furthering alignment. Internal workshops can go a long way in making this happen. A great way to do this is to offer a workshop and then check-in periodically to make sure everyone is staying the course. Also set expectations around documentation. This keeps alignment strong and clarity high.
Finally, don’t forget to track your impact. Consistent revenue is the be-all, end-all, but you can also gauge your forward progress through metrics like shorter sales cycles, increased conversion rates, shorter onboarding and so forth. Celebrate the small wins and enjoy the course of the long-term trajectory. You’ll get where you’re hoping to get if you follow these steps and fill the gap of service portfolio management. It will take time, but you will get there indeed.
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