Selling Product as a Service

May 26, 2016 | Post by David Hall | 0 Comments

Customer Relationship; Business Outcomes

We’re seeing a fundamental change in how software is being consumed and, in turn, how hardware is being used – probably one of the biggest market shifts in the last 25 years. Office 365, for example, is one of the hottest products on the market and is Software-as-a-Service (SaaS)-based, designed to let users work anywhere, anytime from any device, and enabling organizations to pay monthly or annually via subscription.

As a result of this shift, we must adapt our IT expertise in order to help solve business challenges by offering a business-outcome approach. For those of us selling tech products and services, it’s simply no longer enough to close a transaction and move on. In the subscription economy, realizing value is intimately tied to the client’s successful adoption of technology investments and the resulting business outcomes they achieve. Clients are looking to their IT staff and business leaders to help them take their business to the next level, so we need to listen and respond to their evolving needs and help them build on their foundation.

What types of business outcomes are clients increasingly looking to IT to address? Examples include:

  • Increasing customer satisfaction levels
  • Meeting new legislative and or compliance requirements
  • Maximizing productivity
  • Bringing new products/services to market more quickly
  • Improving product/service quality
  • Breaking into new markets
  • Growing market share or defending against competitors
  • Increasing levels of innovation
  • Providing business continuity and disaster recovery (BCDR) capability

This focus on outcomes is more important than ever because, as providers, there is so much we can offer to leverage and expand on what organizations have already purchased. In fact, to address this market shift, the industry has adopted a model known as LAER (for Land, Adopt, Expand, Renew), designed to encourage organizations to make the most of their technology investments The purpose is to “land” on a technology decision, help the client “adopt” and take full advantage of its technology investment, “expand” and leverage the initial sale so the client consumes more features and functionalities, and strengthen and “renew” the life cycle of product or service.

The Technology Services Industry Association (TSIA) book “Introducing Technology-as-a-Service Playbook” by Thomas Lah and J.B. Wood supports this new tech world view, outlining the next-generation tech industry. It’s a world in which suppliers play an active, ongoing role in helping business customers achieve value from their technology investments. The book describes four supplier operating models, moving across a spectrum from a completely product-focused approach to a completely outcome-focused approach.

Suppliers that fall under the first two levels (the majority of them today) are focused more on a transaction-based approach, working with clients to establish performance indicators. Those at level three become more focused on the utilization-level agreement, while at level four – where companies such as CompuCom are headed – the focus shifts to the value-level agreement, in which the client sees the supplier as a partner, a trusted advisor helping them to solve business challenges and meet their objectives.

Clients are in the driver’s seat in the subscription-based economy, with suppliers focused as never before on delivering greater value to help them. At the end of the day, clients’ satisfaction is no longer enough. We must work with them to make sure they are achieving and exceeding their business goals, opening up a whole new realm of opportunities for suppliers. This approach will help them – and us – to grow.

What are your thoughts on working with clients in the new economy? I welcome your comments and questions.

The content and opinions posted on this blog and any corresponding comments are the personal opinions of the original authors, not those of CompuCom.

  • David Hall's picture

    David Hall

    As Executive Vice President, Professional Services, David Hall is responsible for delivering world-class Professional Services across all lines of CompuCom’s business.

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