Point of View - Interview with Thomas Lah, Executive Director for the Technology Professional Services Association (TPSA)
Neochange sat down with Thomas to discuss his thoughts on the evolving software industry.
What role are Technology
Professional Services Executives performing to help
their customers lead software-driven business transformations?
There is good news and bad news. PS Executives of historically product-centric companies are finding themselves in the critical path of customer success and market adoption. The good news is that Software companies are becoming more engaged with their customers to drive customer success. Today, the average enterprise software company has 50% - 60% of their revenues coming from services. Support is still the majority of service revenues, but advanced professional services have become 15% - 20% of total company revenues.
The bad news is that product-centric players are making critical business decisions regarding advanced professional services based upon their limited PS experience. Decisions such as. What services should PS develop to drive customer success? How much PS capability should the company have? How fast can that capability be scaled? This lack of experience can often create poor customer experiences.
The Standish group continues
to report a high level of IT implementation failures.
Do you think this lack of experience developing appropriate
professional service offerings feeds this issue?
Clearly, not having the right service portfolio will not help this problem. I do believe the technology industry in general underestimates the effort required to implement business change. Also, a customer's willingness to invest in assistance can make or break project success.
Beyond implementation there
are some troubling end user adoption studies recently
published for established software verticals. To what
degree are enterprise software providers discussing
this challenge?
The software industry is maturing and the brutal reality is that there are less new license deals to go hunt down. That creates a greater sense of urgency to service the existing install base and make sure they renew their relationship with your company. Forward thinking management teams are now beginning to discuss how they can develop a sales force that is expert at driving customer intimacy, product adoption, and product renewal.
What do you see as the biggest
challenges facing the software industry in the next
2-3 years?
Services. Service definition. Service development. Service delivery. Did I say services?
Product has become the minority revenue stream in the software industry. Software companies must now focus on optimizing not just support revenues, but all service revenue streams. Even the new software as a service platform providers will need to deploy a value add service portfolio that secures customer adoption and renewal. I may be biased, but I strongly believe this attention to the service side of the business is the greatest challenge facing software companies today.
What is the mission of the Technology Professional
Services Association (TPSA) and how is it making an impact?
We founded TPSA in the fall of 2005 with the express intent to help technology companies understand and optimize their professional service business. We felt this aspect of the technology industry was dramatically underserved. Practitioners had no forums dedicated to their specific business issues. I think we have really changed that dynamic.
After one year, we have over sixty member companies that come together in multiple forums including summits, roundtables, and working task forces. Most importantly, we launched and manage a perpetual benchmarking study for the industry. Now, for perhaps the first time ever, technology companies have a place to turn when they want to look at real data regarding the performance and parameters of their industry.
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