Saturday, August 8, 2015

#Startup: Applied Core Competency is the next step in Services

Services startups - in the age of Product startups have been struggling for identity. Two reasons I could fathom are:  a) There is a proliferation of mass skills b) These skills are means and not the end.   
Services companies talk about what they can do, and not related to customer needs.  A product has a tangible output - it either solves a problem or it does not.  Services on the other hand avoid being tangible - and are offered as a time based or an activity based offering, and therefore, miss the customer context.  
Create product frameworks through applying core competency

Outcome based service contracts solve some of these problems.   But everybody claims to be the best, and have their own set of references to show.  So how does the customer make an objective choice.  I have seen requirements floating on social networks and a host of 'service providers' jump on to the requirement.   And nobody does even a 'sales pitch'.   The result - low conversion rate, and even if a project comes on, it is a low cost, small piece of work.

One of my customer has realized that in each service portfolio, there emerges a clear set of skills or 'sweet spot'.  This is called 'core competency'.   Now core competency essentially means that you are good at something and when repeated done, you have enough experience to deliver as per customer's expectation.   While like other service providers, he fights through the maze to get those projects; but he did one more - he started identifying problems, and patterns that his 'core competency' could repeatedly solve.  He created a product or a framework out of how a problem can be solved by upfront deployment of this framework.  

This meant that there was a problem, and then the framework became the solution.   All he had to do was to then make customer's explore and acknowledge the problem, and then the need was established.  His sales conversions have now leapfrogged.   Buoyed by this success, he is now creating more frameworks or near-products.   And for the customer, they are happy to deploy these frameworks, as they see now 'tangible' results.

What is key here is that we helped our client to move from core-competency based services to  'applied core competency'.   This is a near-product, and customers can therefore related more.   Eventually, most services companies will have to decide whether they will be generic and offer skilled or time based services or create 'applied core competency frameworks'.   
  • Identify that service that you have done repeatedly well as a team. 
  • Make a clear framework - process, decision metrics, input and output parameters and boundary conditions. 
  • Package this with clear use cases.   Automate if necessary. 
  • Apply this framework with amenable customers, and then measure results. 
  • Boldly track and see how you can perfect to improve the results. 
  • Package this into a product - with clear deployment plan and boundary conditions.   Add customization as an extra layer, than as a ready-made service.
  • Coach your sales team to sell it as a problem-solving product, than a plain service.   
These steps are simple, and can be used to convert 'generic' services into 'applied frameworks'.
-Ashok Subramanian 
(C) Cherunathury Tech Ventures 2015


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