Design them for Value AND Profitability · With apologies to J.J. Thomson's 'Raisin Pudding' model of atomic structure Automated Discovery Software Deployment Tools Migration

Productize Your ServicesDesign them for Value AND Profitability

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Copyright © 2008 - 2014 AntFarm, Inc. All Rights Reserved

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About Service StrategiesA Global Service Improvement Company

• Service Strategies provides consulting, training, industry standards and certification programs that help you deliver better service

• Programs available to improve the performance of eService, Support, Field Service and Professional Services operations

• The Service Capability & Performance (SCP) StandardsThe SCP Standards have been recognized as the global benchmark of service excellence for the past 15 years

• SCP Career Certification and Training ProgramsOver 5000 service professionals worldwide have attained certification under our training and certification programs

http://servicestrategies.com/scp-standards/

http://servicestrategies.com/training/

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We are Service ArchitectsWe drive service growth for IT Solutions Providers

through improved service design and delivery

• Build in customer & solution provider value• Base service delivery on best practices• Employ practical methods and tools

Our Mission

Two Questions for you…

• Does the Value Proposition for your service offerings provide you with a competitive advantage?

• Are you prepared to consistently Sell and Deliver on that value proposition?

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What’s a “Service Offering”?• With hardware and software, it’s a key part of a

“Technology Solution” (often)

• Targets a one or more business problems (always)

• Has a defined Value Proposition (Service Results which satisfy Customer Needs)

• Fixed Statement of Services (relatively)

• Fees based on Solution Results vs. level of effort (generally)

= Repeatable and Scalable – It’s PRODUCTIZED!!!

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“I’ve got a guy…”is not a Service Offering

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TransitionFromSales

SystemDeployment

TechnicalDiscovery

System Testing& Acceptance

CustomerPilots

ProjectCloseout

SystemDesign

SystemConfiguration

RecurringStatus

Meetings

Migration &Cutover

CustomerTraining

Project Kickoffand Planning

TransitionTo Support

ServiceDelivery Cloud

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TransitionFromSales

SystemDeployment

TechnicalDiscovery

System Testing& Acceptance

CustomerPilots

ProjectCloseout

SystemDesign

SystemConfiguration

RecurringStatus

Meetings

Migration &Cutover

CustomerTraining

Project Kickoffand Planning

TransitionTo Support

“Raisin Pudding”Process Model

With apologies to J.J. Thomson's'Raisin Pudding' model of atomic structure

AutomatedDiscovery

SoftwareDeployment Tools

MigrationTools

ConfigurationTools

Sure, there are tools, but…

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Everyone recognizes a broken process…

• Things take too long• Everyone is “firefighting”• Customers are unhappy• Employees are frustrated• Too many things have to be redone• Finger-pointing between departments• “Exceptions” to the process are common

All of these are a drain on

profitability

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Urban Legend Quotes

• The price of services is inflated by 30 – 80% due to processes that have excessive Non-Value-Add activities, as viewed by the customer

• Non-Value-Add effort typically comprises as much as 50% of the total service costs

Source: Michael George, Lean Six Sigma for Service

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The drive to improve Profitability

Cost

ProfitPrice

Cost

Profit

Historically:Price = Cost + Profit(to improve margins, raise price)

Cost

ProfitPrice

Cost

In a Competitive Market:Profit = Price - Cost(to improve margins, lower cost)

Profit

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Customers Value Servicesthat Satisfy their Needs

• The SERVICE RESULTS must satisfy their business problem

• The DELIVERY MODEL must fit their operational needs

• The PRICE must be within their TCO budget

DeliveryResults

CustomerValue

Price

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Services must also Satisfythe Needs of the Business

• The COST to deliver services must allow for acceptable margins at market prices

• The DEFECT rate must not cause customer satisfaction issues or raise costs

• The CYCLE TIME must fit the “Business Velocity” built into the business plan

CycleTime

Defects

BusinessValue

Cost

What is the cost of Poor Value?

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Fewer Sales

DisgruntledCustomers

LowerProfits

Our objective today:Introduce you to concepts to help you…

• Know what your CUSTOMERS NEED from your services– what they value

• Design your services to PROVIDE VALUE CONSISTENTLY

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Two Sources of ROI from this approach:

• TOP LINE: Increased sales of services through a better value proposition

• BOTTOM LINE: Better return for your services capital $$ through more efficient operations

Increase demand

Improve sell price

REV

Manage capacity

Use less expensive resources

Reduce waste

OI

These concepts apply to…

• Project Management• Technology deployments• Field engineering & technical services• Software implementation• Support• Managed Services• Cloud offerings• … all disciplines of IT services

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Service Design is the keyto Service Value

Lynn Shostack, “Designing Services that Deliver”,Harvard Business Review

“Better Service Design providesthe key to market success, andmore importantly, to growth”Lynn Shostack, Harvard Business Review

To improve the VALUE in a service, improve the process used to design the service

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ActualService Delivery Effort

w/ Post-Release Problems

Service Rollout Effort – Fire Fighting

LevelOf

Effort

ServiceDevelopment

Planned ServiceDelivery Effort

Time

ServiceReleasedFor Sale

CustomerSatisfaction

Profitability

Escapes

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Service Rollout Effort – Fire Prevention

LevelOf

Effort

Up-frontinvestmentin VOC and

Service Design Planned ServiceDelivery Effort

ReducedPost-Release

Problems

ServiceReleasedFor Sale

Correct problems in service design;

eliminate downstream errors

CustomerSatisfaction

Profitability

Time

Zig Ziglar’s“Successful Sales Formula”

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NeedSatisfaction

NeedSolution

NeedAwareness

NeedAnalysis - investigation

- light bulb comes on

- matching results to needs

- delivering the results

Know the answers ahead of time

Adapted from Zig Ziglar, Ziglar on Selling, Nelson Publishing, 1991

Zig Ziglar’s “Successful Sales Formula”

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“Here’s a proposal with a Statement of Work that outlines exactly how we are going to deliver these outcomes”

NeedSatisfaction

“Here’s how we address these requirements:1) service feature…2) service feature…

Would that meet your objectives?”

NeedSolution

“Then you probably need to address :1) need…2) need…

to meet those objectives, correct?”

NeedAwareness

Probing Questions:• “What are your business objectives?”• “What are your pains and hurdles?”

NeedAnalysis

Sales Dialog: Service Design:Business Objective:

• Challenges• Market Characterization

Customer Needs Analysis:• Customer Needs (from VOC)• Service Features

Service Blueprint:• Statement of Work

Adapted from Zig Ziglar, Ziglar on Selling, Nelson Publishing, 1991

Four Steps to Better Service Value

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Establish the Value

Proposition

Define the ServiceVision

BlueprintThe

Service

Sell TheValue

1 2 3 4

IMPROVE

Service Blueprintingframework


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BlueprintThe

Service

Sell The Value

2 3 4

IMPROVE


Establish the Value

Proposition

1

What is the “Voice of the Customer”?

• Statement of needs as seen by the customer• Defines which features in a service that are critical to the

customer• Heard from feedback or culled from existing data such

as satisfaction surveys• Translated into specific requirements which must be met

to ensure customer satisfaction

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Only the customer can

define value as they see it!!!

Map Service Results to Customer Needs

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Cus

tom

er

Customer Need

System design and configuration meet customer requirements

Customer technical requirements are validated

System design must reflects the customer's requirements

System design must comply with the manufacturer's recommendations and guidelines

Required Service Result

Requirements interview and questionnaire

Detailed System Design document depicting configuration

Customer review and approval of the design

Vendor review of the design

Required Service Input

Customer requirements input

Requirements Questionnaire template

System design template

Vendor comments and corrections to design

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Customer Needs Analysis

CUSTOMER NEEDS

Service ID Service Title Service Owner Effective Date

Page 1AntFarm, Inc. Form 000-2001-01 (11x17) Copyright © 2006 AntFarm, Inc.

SERVICE RESULTS SERVICE INPUTS

Secure Healthcare Messaging Implementation

System design and configuration meet customer requirements

System must be installed and functional in Customer Data Center

Customer is prepared for the implementation project

Customer users are prepared to use the system

Customer must be able to maintain the system after go-live

Customer requirements are validated

System design must reflect the customer's requirements

System design must comply with the manufacturer's recommendations and guidelines

System must be tested prior to go-live

Customer understands their roles and responsibilities

Customer data center has adequate space, power, and HVAC

Customer can plan for receipt of the hardware

Users are trained on system functionality

Training schedule takes into account the user shift schedule

Requirements interview and questionnaire


Customer review and approval of the design

Vendor review of the design

Stage server remotely

Install and configure application remotely

Installation in customer data center

Unit and System test plan

Customer review of test plan

Unit and System Testing

Test failures fixed

Kickoff meeting to set expectations

Project plan defining project schedule and methodology


Coordination of the installation with the customer

Online shipping status information

Training plan defining attendees and courses

Online training for application and administration

Training schedule for all users

As-build documentation

Project issues closeout

Support welcome packet

User contacts and roles

User schedule availability

Customer requirements input

Requirements Questionnaire template

System design template

Vendor comments and corrections to design

Staging guidelines

Shipping status

Confirmation of hardware arrival

Test plan template

Test results documented

List of users and roles

Schedule of user availability

Red-lined design document

Project issues list

Welcome packet template

Compelling Value Proposition

originates here!!!

Customer Needs Service Features Service Inputs


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BlueprintThe

Service

Sell The Value

2 3 4

IMPROVE


Establish the Value

Proposition

1

The Service Concept

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ServiceConcept

ServiceLife Cycle

Delivery Approach

ServiceResults

ServiceBlueprint

The Service Concept is the VISION for the service

It captures the Value Proposition derived from VOC analysis

VOC

Service Ideas

Begins to answer the 5 P’s of marketing Lays the groundwork

For the SERVICE BLUEPRINT

Service Concept

Document

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• What business problems are you solving?

• Who is the customer?• What do they value?

• What outcomes do you have to achieve?

• What is the service delivery model?

Defines the Service Product

Write Last !!

Service Concept

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The 5 P’s of Marketing• Product – service features, benefits

• Position – relative to market needs / competition

• Place – sales & distribution channel(s) to your market

• Price – cost-plus or value-based

• Promotion – marketing strategy

Service Description

Business Objectives

Target Customers• Market Segments• Individuals• Attributes / Benefits

Sales Strategy• Sales Channel• Opportunity• Positioning

Customer Rqmts• Needs• Service Features

Service Approach• Life Cycle• Description

Establishes a common foundation for go-to-marketing

messaging

• Web Content• Brochures• Sales Presentations• Battle Cards

Outline

Define the Business Objectivesfor the Service

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• Drive revenue or reduce cost• Enable employees• Achieve Compliance• Reduce risk• Change / improve current state• Use action verb (improve, reduce, enable)

Frame your Business Objectives in termsof the customer’s business goals:

ManagedApplication

Enable client to provide superior customer service through the contact center(driving revenue growth, customer satisfaction, loyalty and retention)

ApplicationImplementation

Accelerate adoption and utilization of the [solution](so you can achieve the full benefits of your technology investment sooner)

HostedTechnology

Provide anytime, anywhere access to key business applications and data (enabling your employees to spend more time with clients)

Include the“so that you can…”

A service offering probably has several business objectives

Identify challenges in achieving these objectives

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ManagedApplication

Enable client to provide superior customer service through the contact center(driving revenue growth, customer satisfaction, loyalty and retention)

ApplicationImplementation

Accelerate adoption and utilization of the [solution](so you can achieve the full benefits of your technology investment sooner)

Challenges

Lack of expertise for moves, adds, changes

No resources to upgrade application and keep up with patches

Can’t match system capabilities to business needs

Limited depth in understanding the system to make intelligent design decisions

Challenges

Challenges are the source for “probing

questions”

Service Concept

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Target Customers

Market Segment Target Customer Attributes Anticipated Benefits / Value

Small to mid-sized physician practices

Have electronic patient record and patient accounting Struggling to comply with HIPAA privacy Want to minimize costs to provide patients with visit and diagnostic results

Improved patient satisfaction and loyalty Improved turn around time for follow-up visit scheduling and patient treatment Reduced costs and exposure for complying with HIPAA privacy concerns

Sales Strategy

Sales Channel Opportunity Positioning

Direct sales Complete SHM solution Meets a critical need for a more effective means of communicating with patients

Channel sales Attached to a Physicians Electronic Patient Record solution sales

Provides substantial additional value (end-to-end digital solution)

What does the optimal customer look like?

How does the service uniquely solve their

needs?

Who will sell it?

In what type of deals?

Why is the service required in the deal?

Service Description

Business Objectives





Outline

May serve more than one segment


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NeedSatisfaction



NeedSolution



NeedAwareness


NeedAnalysis





Service Concept

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Customer Requirements

Customer Needs Service Features

System design and configuration meet customer requirements Customer requirements are validated System design must reflect the

customer’s requirements System design must comply with the

manufacturer’s recommendations and guidelines

Requirements interview and questionnaire Detailed system design document depicting the

configuration Customer review and approval of the design Vendor review of the design

System must be installed and functional System must be installed in the

customer’s data center System must be tested prior to go-live

Remote server staging Install and configure application remotely Installation in customer data center Unit and system test plan Customer review of the test plan Unit and system testing Test failures fixed

Customer is prepared for the implementation project

Customer understands their roles and responsibilities

Customer data center has adequate space, power, and HVAC

Customer can plan for receipt of the hardware

Kickoff meeting to set expectations Project plan defining project schedule and methodology Detailed system design document decpiting the

configuration Coordination of the installation status with the customer Online shipping status information

What are the needs that areCritical to Satisfaction?

What Service Outcomes are providedto satisfy the needs

Service Description

Business Objectives





Outline


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NeedSatisfaction



NeedSolution



NeedAwareness


NeedAnalysis





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Designing the Delivery Model

Service Life Cycle:

• Block diagram depicting the life cycle relationship with the customer

• Provides a high level understanding of the service flow

• Outlines the organization of the process modules (Service Blueprints)

• Defined by grouping Features / Results identified in the Customer Needs Analysis

Typical Implementation Life Cycle

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Time

SystemDesign

System Build & Ship

Customer Training

ProjectInitiation

ProjectCloseout

System Install & Test

Entry Exit

Entry Exit

Entry Exit

Entry Exit

Entry Exit

Entry Exit

Commonly known as a

“Methodology”

Project ControlEntry Exit

Map Required Results to the Life Cycle

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SystemDesign

SystemBuild & Ship

SystemInstall & Test

Customer Training

Procure server hardware

Stage server

Install & configure

application

Prepare Install Plan and Obtain

Customer Approval

Install server in customer data

center

Prepare Test Plan and Obtain

Customer Approval

Conduct System Testing

Remediate test failures

Online Training System

Life CyclePhase

GatherCustomer

DesignRequirements

Create Top Level & Detailed

Design

Obtain Customer

Approval of Design

VendorDesignReview

Service Results

Needs Features

Service Concept

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Service Approach

Service Life Cycle Delivery System description

Project Initiation Sales and Project Manager on site to review plan

System Design Customer provided with questionnaire indicating design choices Conference call to review specifications Remote preparation of system design On site review of design

System Build and Ship Remote staging and application build Customer has web visibility of build status

System Install and Test Hardware vendor installs hardware in customer data center Remote development and review of test plan On-site connection of interfaces and system testing

Customer Training Remote administered webinars

Project Closeout Conference call for transition to support

What are the major delivery phases?

How are service outcomes achieved?

Service Description

Business Objectives





Outline

The stage is set for the Service Blueprint

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ServiceConcept

ServiceBlueprint

VOC

Service Ideas

ServiceResults

DeliveryApproach

ServiceLife Cycle

SERVICE BLUEPRINT


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BlueprintThe

Service

Sell The Value

2 3 4

IMPROVE


Establish the Value

Proposition

1

What’s a Service Blueprint?

• Graphical projection of how a service is delivered from the CUSTOMER’S PERSPECTIVE

• Expansion of the general service delivery concept, providing who, what, when, where, & how details

• Charts all of the transactions that occur both in the customer’s view and outside of it

• Foundation for the Statement of Work and consistent delivery

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Page 1AntFarm, Inc. Form 000-5015-02 Copyright © 2006 AntFarm, Inc.

Procedure Notes

Task / Activity

Functional Area Service / Procedure Owner

Service ID Service TitlePhase / Process

Effective Date

• [none]

Techniques• Vendor config web site• Design template

Tools

• Review customer responses for completeness and compliance with recommended practices. If customer responses are incomplete or do not comply with recommended practices contact customer and explain deficiency• Determine Primary Database Server configuration first, using parameters from interview results

• Refer to System Design Guidelines for how to set specific parameters based on customer input• Upon completion of main database service configuration, validate with vendor config web site• Complete Primary Database Server portion of System Design Specification

• Determine Backup Database Server configuration (same steps)• Select Small, Medium, or Large Communications Server configuration based on customer parameters and document in the System Design Specification• Add ancillary items (printers, workstations, etc.) per requirements• Forward entire Design Specification document to Vendor for review• Finalize System Connectivity Diagram in Design Specification document• Forward System Design Specification to Engr Mgr for review

Steps & Guidelines

• Vendor review of configuration• Engineering manager review of System Design Specification

Control• Defects identified in Vendor review•

Measure

Prepare detailed design

Engr

Coordinate design review

Engr

Gather rqmts & specs

Engr

System Design Guidelines

Customer has responded to

interview

System Design Specification

Vendor has reviewed

configuration

Prepare detailed design 300-0201-01 SHM ImplementationPhase 2: System Design

Professional Services 6/30/06Engineering Manager

Interview question results

Engineering Manager has

reviewed Design Spec

ServiceArchitecture

Process Maps

Procedure Descriptions

Job Aid

Three Layersof the

ProcessFramework

Service BlueprintProcess Overview

Life Cycle Diagram


45

Depicts the customer’s overall experienceLife Cycle Diagram

Catalogs the library of process modules in the service

Shows how the pieces fit together


46

Process Module Components

Detailed Process WorkflowStep‐by‐step workflow for the process area

Process OverviewObjectives and boundary conditions for the process


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Process Overview

What goes into the process… What comes out of the process…

What you’re trying to achieve with the process

Sets expectations

for the process

Objectives and boundary conditions for the process module

Significant elements of the process (Sub-processes) and their relationship


48

Background processes or interfaces with other processes

Systems and tools which play a role in the service; backstage documents

Storyboardfor Service

Delivery

Service Blueprint “Swim Lanes” style process map

Actions in contact with the customer

Actions out ofdirect view of the customer

Tangible deliverables or results

Events and outcomes experienced by the customer

“You are here” in the serviceLife Cycle Diagram


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Workflow

Show the workflow and the connection to the customer experience

Identify action performers by role


50

Tangible Evidence

Document the physical evidence the client sees


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Integration with automation

Show how automated systems relate to the workflow


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Building the Statement of Work

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Phase 2: System DesignIntegrator Responsibilities Customer Responsibilities

Coordinate the design requirements interview Conduct the design requirements interview and gather system requirements and specifications Prepare the Detailed System Design Coordinate the design review session Present the design for customer approval Prepare contract change order (if required)

Complete Design Interview Questionnaire Participate in the design requirements interview and provide customer input on system configuration as it relates to their workflow Participate in the design review session Review, provide input to, and approve the system design Approve the change order (if required0

Deliverable Description Provided By

Design Interview Questionnaire

Comprehensive set of questions and tables used to gather customer workflow information as input to the Detailed System Design

Integrator, completed by customer

Detailed System Design

Resulting system configuration, reflecting customer specific workflow requirements

Integrator, approved by customer

Change Order Amendment to initial contract reflecting any system component changes that resulted from the design preparation and review

Integrator, approved by customer

Phase Completion Criteria

System design approved Change order signed (if applicable)

Service Blueprint

PhysicalEvidence

CustomerActions

OnstageActions

BackstageActions

SupportProcesses

SupportSystems

Life CycleStages

[ LINE OF CUSTOMER INTERACTION ]

[ LINE OF CUSTOMER VISIBILITY ]

[ LINE OF INTERNAL INTERACTION ]

GatherRqmts &Specs

Respondto interviewquestions

PrepareDetailedDesign

PresentDesign

ApproveDesign

w/ changes

DesignSpec

InterviewQuestions

ChangeOrder

ProjectPortal

VendorDesignReview

VendorConfigSystem

System Design

CoordinateDesignreview

ExitConditions

AA

B

C

D

E

B

CD

E


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NeedSatisfaction



NeedSolution



NeedAwareness


NeedAnalysis






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BlueprintThe

Service

Sell The Value

2 3 4

IMPROVE


Establish the Value

Proposition

1

Achieving the Value Proposition…

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DesignServiceProcess

CustomerNeeds Drive

ServiceResults

Define the Value Proposition

Service Concept

ServiceProcess

Yields ServiceResults

SatisfyCustomer

Needs

Achieve the Value Proposition

Service Execution

Service Blueprint

Targeted Value

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• The Service Concept specifically focuses on meeting well understood customer needs

= Customer Value

• The Service Blueprint ensures consistent delivery and reduced mistakes and rework

= Business ValueDefects Cycle

Time

Cost

BusinessValue

ServiceResults

Delivery

Price

CustomerValue

Service Concept

Common go-to-market messaging for:

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• Web site Service Descriptions

• Service Offering Brochures

• Sales Battle Cards

• Sales Presentations

Marketing Brochure

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Service TitleDescription:Clear & Concise description of the service:• 1 or 2 sentence service description• bulleted list of objectives (in business terms)• bulleted list of service results or features

Service Backdrop:Target market and market conditions; explain why this service is required based on the technology landscape

Customer Problem/Need Statement:Focus on the needs of the customer that your value proposition addresses

How this service solves the problem:Match the service results to customer needs, showing how the needs are met

Service Title

Differentiators:What’s important about the service or delivery?• Methodology• QualityWhat makes this solution unique?

Outcomes or Deliverables:Ensure the Service Results are described clearly and are well understood by the target buyer(s)

Simple, reinforced value proposition:Describe the overall business outcomes for the service; restate the value proposition

Call to Action:Statement with an action verb of what the customer should do next to have their problem solved

Company Contact Info

All of this information is derived from the Service Concept

Sales Training

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Business Objectives for the Service

Target Market Segments

Sales Strategy

Value Proposition

Delivery Methodology

- Attributes, benefits, & value for the organization

- Channels, opportunities, positioning vis-à-vis other offerings and solutions

- Customer needs and the service results that satisfy them

- Life Cycle phases, objectives, major activities

- Why they would buy it to begin with

(plus pricing / quoting)

Selling the Value

• The Value Proposition must be based on meeting customer needs BY DESIGN

• Base Sales Tools on the Service Concept

• Build the Statement of Work from the Service Blueprint

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More Sales

More SatisfiedCustomers

Two Questions for you…

• Does the Value Proposition for your services provide you with a competitive advantage?

• Are you prepared to consistently Sell and Deliver on that value proposition?

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Well, really 3 Questions• If the answer to either question is NO, what are

you doing about it?

Preview of AntFarmService Offerings

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AntFarm’s Service Design Framework

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ServiceConcept

ServiceBlueprint

Life CycleDelivery Methodology

Service Resultsderived from

Customer Needs

VOC

Service Idea

SERVICE BLUEPRINT

GO TO MARKETDOCUMENTS

Features

Benefits

STATEMENT OF WORK

Customer Integrator

RESPONSIBILITIES

TRAINING PLAN

Role Skills

TRAINING REQUIREMENTS

TECHNICALPROCEDURES

DELIVERABLETEMPLATES

CUSTOMERNEEDS

ANALYSIS

CTS

CTS

CTSCTQ

CTQ

CTQ

CTQ

CTQ

CTQ

Customer

SERVICE CONCEPT

Customer Value

Target Market

Sales Team Opportunity

Sales Strategy

• Brochures• Sales Presentations• Battle Cards• ROI Tools

Step 1: Establish the vision Step 2: Develop the delivery process

Voice of the Customer

Service Concept Design Project

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Improve the growth potential for a service offering by establishing a sound vision for the value proposition, target market, and service delivery methodology.

Objective

• Define the client business problems and the service outcomes delivered by the offering to satisfy them = the value proposition

• Characterize the market for the service offering to allow more targeted messaging and sales channel alignment

• Outline the high level delivery model, enabling sales to set accurate expectations for service delivery

Service Blueprinting Project

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Improve service value and profitability by establishing consistent service delivery with reduced rework and non-value-add effort.

Objective

• Outline the high level architecture of the service delivery model, setting the stage for detailed service design.

• Develop a detailed design specification, the Service Blueprint, for an IT-related service which can be rolled out with a high probability of successful delivery.

Questions?

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Webinar Hosted by

[email protected] – Corporate800-552-3058 – Toll Free

Documents

Design them for Value AND Profitability · With apologies to J.J. Thomson's 'Raisin Pudding' model of atomic structure Automated Discovery Software Deployment Tools Migration