Penny Wise Foolishness

October 30, 2010

Should a company spend the money on implementation services for the software they just purchased – or should they forge ahead on their own?

In almost all cases I say yes – buy the services!

There are many SaaS and Enterprise software vendors out there claiming that professional services are not required to install their software.  This strategy can initially provide a competitive advantage in the market place. Perhaps this is true from an installation point of view, but installing software is a far cry from configuring and implementing it to maximize the value it delivers.  This is not to mention the incremental effort, time and cost required to go at it alone.  The longer an implementation takes the less value it tends to provide and the more errors will be committed.

To express this in different terms, ask yourself this simple question: Do you tend to be better, faster and more effective the first time you do something or the tenth or hundredth time?  How many gotchas do you have to go through in the learning curve to mastering software?  Buy the services!

I have repeatedly seen customers run into easily avoidable and unnecessary problems because they made the decision to save a few dollars and implement software on their own.  What functionality are they not using because they were unaware of it? What processes were never optimized to enable the software? How much easily avoidable pain was introduced into their organization?

How much credibility do you need to loose with your constituency before realizing it almost always makes sense to procure a services implementation package with the software you purchase?

Lean on partners who have been there – done that. No matter how smart and knowledgeable your staff is, going at software implementation alone is usually penny wise foolishness.

The Importance of Internal Buy-in

August 7, 2010

A key requirement in launching and then successfully growing an internal Professional Services team is obtaining internal buy-in on the program and a commitment to sell it.

When the decision is made that Services are to be sold and not given away, everyone needs to alter their way of doing business. This is especially true for the company Executives, Marketing, Sales, Finance and Support teams. The message needs to change from “let’s use Services as a tool to sweeten deals” to “there is significant value in the Services offered and customers need to pay for it.”

Customers who purchase PS will see a much higher return on their investment, be more likely to purchase additional licenses, and importantly be more willing to act as a reference to other potential customers.

SaaS Vendors Can Profitably Grow a Professional Services Organization

April 18, 2010

Most SaaS software vendors are in business to sell subscriptions and create an ongoing and constantly increasing revenue stream.  Professional Services is often initially a quasi official organization put into place to assist sales in selling subscriptions.  As the vendor matures, the expectations placed on the Professional Services organization often evolve into becoming a significant revenue and margin generator.

Whether the SaaS software is designed to meet a companies needs in CRM, sales pipeline management, ERP, billing, invoicing, human resource management, service desk management, supply chain, security, asset management or other function, it is often challenging for a SaaS software vendor to turn their Professional Services organization into a profitable business on its own merits.

The challenge is often rooted both internally and externally in the misconception that if a solution is SaaS, all that is required is to buy the subscriptions, activate them and then magically be up and successfully running.  For a customer to optimize the value received from their purchase, the reality is rarely so simple.

Future posts on this blog will examine the internal and external challenges and solutions of profitably growing a Professional Services organization that exists within a SaaS software vendor.


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