Customer Success

5 Essential Tactics for Crossing the Services Chasm

September 5, 2013

One of the most referenced concepts for expansion-stage software and SaaS companies is the Crossing the Chasm model. In the book of the same name, Geoffrey Moore argues that as technology companies transition from their initial customers (“early adopters”) to more pragmatic customers (the “early majority”) they are highly vulnerable to failures caused by having less than a “whole” product. What is less-often realized is that a similar and parallel gap exists on the implementation services side of these same companies, with its own set of traps and challenges.

To understand where the services chasm lies, it is useful to think of the services side of software and SaaS companies as evolving through five basic states:

  1. Initial Services: This phase is defined by initial engagements where services are actually delivered by the engineers building the product to ensure successful implementation and (especially) to address product gaps with in-the-field services.
  2. Separated Services: During this period a separate services organization is defined, but projects are still heavily focused on technical services delivered by engineers. There is not yet a mature delivery model being consistently used, and the services team is often still remediating product gaps.
  3. Standardized Services: In this critical period, the services business is defining standard engagement models and adding project management and business analyst resources. The services being delivered has broadened into a “whole services” model including business.
  4. Diversified Services: Later in its evolution, the services model typically evolves to include ancillary services that comprise a “whole services” model, including services focused on business processes, user adoption, and enterprise architecture.
  5. Optimized Services: As the services business completes its evolution there is shift to focus on optimizing the financial contribution of the group though cost efficiencies.

Advancing to each of these states presents challenges, but the transition from Separated Services to Standardized Services is the most common point where the evolution stalls, customer satisfaction plummets, and the services organization falls into crisis.
Crossing the Services Chasm

5 Proven Tactics to Avoid Falling into the Services Chasm

 

1) Stabilize the Product

It is impossible to get to the Standardized Services state if the product is not complete and stable. Anything less, and the result will be a services team that is unable to standardize its offerings because they are putting out fires and ignoring scope limitations in order to recover customers.

2) Fully Define Your Offerings

Practice makes perfect and the only way to get to offering well-defined services with clearly-repeatable steps is via a learning curve — every delivery builds on the one before it, resulting in lower costs and better implementations as the iterations pile up. Success with this tactic means focusing on a very small set of standardized offerings that you offer to your customers and avoiding “specials” and custom engagements that would distract your team from getting their standard projects model down pat.

3) Invest in Tools, Methods and Training

To benefit from “doing the same thing” over and over again, it is critical to fully define the delivery process for your standard offerings and fully train the teams that are responsible for delivering them. This includes investing in developing standard tools and templates and creating a certification model to ensure that every services team member understands how to use them.

4) Reign in the Sales Team

Easier said than done, right? But by fully defining standard offerings and training the sales team on how to present them and match customers needs with the right offering, you reduce the tendency for the sales team to “make things up” that your services team will then have to deliver on a one-off basis.

5) Hire Consultants, Not (Necessarily) Engineers

Getting to the Standardized Services state requires delivery team members who can manage scope, handle escalations, and build relationships. As you scale the services team it is essential to move beyond pure technical qualification as your only hiring criteria. You need smart people who can communicate effectively, write well, and manage complex situations with multiple stakeholders. These skills are not guaranteed by a PMA certification or a technical degree, so look beyond the hard skills for candidates who can bring a full set of people and process skills to your team.

Why You Have to Cross the Services Chasm to Grow

Crossing the services chasm from a team of well-meaning technologists delivering mostly technical services to a balanced team of professionals focused on ensuring project success and deep adoption is challenging, but if you want to grow and thrive as an organization it is also necessary. The result of failing to cross the services chasm is not only lost revenue and profits, it is often lost references, lost customers, and sometimes lost companies. Using these five tactics alone will not guarantee success, but they certainly address the most common places where young companies slip up…and into the services chasm.
Are you currently in the process of “crossing the services chasm”? What challenges are you encountering?

Early-Stage Software Company Consultant

<strong>Ken Lownie</strong> is an Early-Stage Software Company Consultant at KLC Partners. Recent projects have included planning and executing a change in organizational structure for a SaaS company and redesigning and launching Service Offerings for a software company. Previously he was Vice President Life Science at NextDocs Corporation <a href="http://www.adlibsoftware.com/">NextDocs Corporation</a>.