White Paper On The Analysis Of High Share Premium Amongst Startups In India

“High share premium is not the basis of a high valuation but the outcome of valid business decisions. This new whitepaper by our iSPIRT policy experts highlights how share premia is a consequence of valid business decisions, why 56(2)(viib) is only for unaccounted funds and measures to prevent valid companies from being aggrieved by it”

3 Levels of Product Training for growth

prodtraining2

 

You have crossed the initial milestone of proving your product has seen some initial success, covered the MVP and now its time for growth…what is one key ingredient for growth ?

You are the rockstar founder or product manager…you have the urge to be omnipresent in every customer discussion or support call…you do a good job on this…but it’s a major deterrent for growth as you become the bottleneck…

The best solution for this problem is to put together a strategy for your product training.  Based on interaction with a startup growth entrepreneur’s request I had put few things, and sharing that in this post.

I plan to cover 3 levels of product training that I have personally learnt or done over the years to make products scale and be successful, the examples are more relevant to B2B but some of this can be used for B2C as well….

The analogy i have used here is of movies

Level 1 : Trailer – Targeted to people that engage with the Decision Makers who buy the product

Level 2 : Movie – Targeted to people that interact with users of the product

Level 3 : Making of Movie – Targeted to people that interact with administrators or consultants that configure, implement or support the product

Lets look at each of them in detail

Level 1 : Trailer training

This training is usually provided to Sales & Marketing teams who have the responsibility to engage and influence the decision makers, to buy the product. Certainly while the content stays high level , I have come across 3 questions to be covered in this training, that will help Sales to effectively position the product and get the interests

The three questions

Why buy ?  – This question establishes what is the real need for the product. What is the real problem that the product solves and why is it important for the customer

Why me ? – Having established the need to buy, the next question that needs to be answered is why me, why your product vs. other choices available in the market, what are differentiators, how is your product better in solving the problems and other objection handling

Why now ? – Assuming the need is established, and the fact that your product is the best fit, the next convincing part is the timing of the buy. The “why now” training should facilitate content that will help the trainee to engage with establishing the urgency, to get the decision to be made in a realistic time.

Coverage of the content

The content should cover the following to help with the above three questions

  • Benefits – the benefits of using the product , to improve the process, derive top line or bottom line savings or any others
  • Customer case studies – this is an amazing content to help sell. How are other customers using the product, their experiences, quotes, videos and other documents
  • Competitors – its important to know your competitors and how your product differentiates from them, this is an important area of coverage in your training
  • Unique differentiators – the product may have 100s of features, but there maybe certain ones which are the outliers or differentiators, there should be specific focus to highlight these in the training
  • Pricing and ROI – how is your product pricing done, what are the flexible options, what is the discounting policy, how do you combine products , how do you optimize revenue opportunity are some of the things that should be covered. Creating presentations and videos to explain the pricing with examples would be an important tool. In addition you also should have ROI templates that can help sales to justify the ROI for the customer, using relevant metrics that is aligned to the product’s benefits
  • Short demos – 2 to 3 minutes – This is the eye catcher demo (The Trailers), as its typically done to the decision makers, the demo should highlight the most important capability and it should also try to cover the overall value proposition of the solution. Remember this is the main tool that can help sales to create the initial interest or close the opportunity for approval.
  • Role plays – This is another extremely successful way to train people – the role play enacts how a customer facing person engages with the customer, bringing in relevant questions and dictate the engagement style to bring out answering the 3 questions
  • FAQs – you know answers to several questions, but its important that this knowledge gets out. A Frequently Asked Questions document or video should be a must have.

 

Level 2 : The movie training

This is to do with the actual product in more detail on how the users would use them. So this is essentially a training that is usually provided to Sales Consultants , Partners and Others who are likely interacting and engaging with the customer users – both during pre-sales as well as post sales.

Coverage of this training

  • Product feature functionality – going into details of the features and functionality of the product, focused towards customer users
  • Use cases – talk about different use cases that the product solves, every product may solve 100s of use cases, so its important to highlight different usage scenarios
  • Benefits in detail – while you cover the benefits already in level 1, this could further explain the details with more deep dives and examples
  • Product differentiators vs competition – detailed product differentiators, on various facets of the product and how this can help especially to cover the functional scenarios
  • Detailed demos (like the actual movie) – 30 minutes to 2 hours focusing on end user functionality
  • Role plays to explain usage of the product – detailed role play videos or depiction of how customers will use the product or how you can convince the users, for them to become influencers

 

Level 3 : The making of the movie training 

The third level of the training is for the people that engage administrators, implementer, partners and consultants. This covers variety of areas and really detailed and deep dive into the “how to aspects”. This is usually done to consultants , support staff and Business/IT administrators. This training is for mostly people who engage post sales, but essentially they should also have good understanding of the level 2 training, before getting here.

 

Coverage of content

  • How to configure the application, security, data, master data etc
  • How to trouble shoot
  • Detailed functional and technical architecture
  • How to demos or videos – detailed 2 hours to a day or even multiple days
  • Technical FAQs

 

So as you can see, if you can create the above training content and start training, it will certainly help you in your growth endeavors.

Offcourse you will also have to keep updating these content as you enhance your product.

Product Training , these days can be delivered in different formats – in person, webcast or through videos. But its essential for you to understand the importance of this and make it as a priority if your goal is growth

 ProdTraining1

Need for automated revenue assurance in telecoms

The practice of revenue assurance has evolved from simply identifying leaks to being the process through which continual improvement could be driven.

  • TM forum (Revenue assurance – quick insights)

*A single person uses 3-4 different types of telecommunication services in a day. Let’s consider India that has a population of around 1.2 billion with 2 plans being offered by a telecom service provider (TSP) and 2 telecom services are being used by each person. 4billion+ bills are generated considering each service and each plan differently. Imagine the bills generated by TSP’s around the globe.

The revenue assurance team comes into picture due to the possibility of overbilling and under billing. Revenue assurance team audits few bill from each batch to maintain bill accuracy. But the team cannot audit all the bills generated. Apart from the fact that the manual audit is a costly affair, the possibility of erroneous billing still exists.

TSP cannot create a positive experience with an overbilled monthly statement. And if the same situation repeats, the customer would go ahead and avail the service of another TSP. Now, if a telecom subscriber was under billed for the services availed, the TSP is losing its revenue.

So, the big question for the TSP’s is how to ensure it doesn’t under bill or over bill its subscribers. Transform your manual revenue assurance into an automated process.

The automated billing assurance system:

  1. Eliminates human errors in misinterpretation of plans and services activated for each subscriber. Thus, ensuring accurate billing for the different services availed by a subscriber.
  2. Automates the audit of bills by referring the services availed by the subscriber, and validates the same with the billing system. Thereby eliminating any computational errors in the bill presentment.

Accordingly, by ensuring error free bill presentment, the TSP is in compliance to the regulations of metering and billing, and the assurance of accurateness is also established. This would certainly be a game changer for Telco’s in the field of revenue assurance and would aid the TSP in battling the subscriber churn rate due to erroneous billing. The automation of revenue assurance would be a cost effective way of putting a lid to the revenue leakage for the TSP’s.

*Values were considered to show importance of revenue assurance. No real time values were used.

Acknowledgement – special thanks to Praveen Y (Analyst at Intense Technologies) for providing information on this domain

The time is ripe: Indian product start-ups are geared to disrupt IT adoption across the enterprise

For most food enthusiasts in India, the start of summer signifies the beginning of the much awaited mango season. The “King of fruits”, as it is most aptly described, is in the market for a few weeks before it completely disappears. Drawing a parallel, it’s an equally good time to be a technology start-up in India as well – of course, the season will certainly last more than a few weeks but tech start-ups are certainly the talk of the town and the opportunity is here and now.

A recent report by Helion had three key pointers that give a boost to the software product ecosystem. Significantly, CIOs and top IT decision-makers keen to look at start-ups. Though common belief may be otherwise, 90% of IT decision makers said that they are likely to see a demo, implement on a trial basis or conduct a review of new technology products. As many as 72% of respondents said they were likely to invest in a limited implementation of the solution, while 54% are willing to invest in a full implementation of the solution. IT Decision makers also recognize that newer technologies would increase the agility and flexibility of their organizations. Surprisingly, cost is not a major factor that is driving the adoption of these new technologies as less than half the respondents (43%) strongly believed that it had impact.

The other key fact to note is that Indian product start-ups are geared to disrupt IT adoption across the enterprise: As many as 82% of the respondents have developed and deployed applications for various business use cases. Business analytics and big data solutions are being offered by 46% of start-ups that responded to this study, enterprise services on the cloud by 30% and mobility solutions are served up by 21%.

Key functions targeted by these solutions include sales (73%), business development (70%), service delivery (66%), HR (51%) and supply chain (48%).

The third heartening fact is that Technology buyers keen to fuel the start-up ecosystem. The survey shows that IT DMs are demonstrating a new-fangled willingness to help start-ups. 85% of respondents stated that they are willing to work (and play an advisory role) with the start-up to help evolve or improve the product. A majority of respondents (82%) are keen to provide customer references while 68% agree that being one among the first five customers for a start-up is acceptable.

But start-ups also need to realize that IT decision makers primarily worry about the reliability of the solution (78% cited this as a high risk) as well as the long-term quality of support from a start-up vendor (72%). Scalability of the solution and its performance are also aspects which IT buyers believe that start-ups must fine-tune in order to seal the deal. As long as tech start-ups can build on the trust element they are sure to have a clear growth trajectory ahead of them.

 

The trouble of selling to BigB

I was talking to one of the CEOs of an enterprise product company who sells to CIOs of enterprise. The typical industry classification for them would be B2B, a business selling to business.  When you read it that way it seems like a fairly balanced relationship between the two.  However as we discussed his situation further and I learnt about the realities of what he has to go through I realized that it was not just a simple B2B but it was SmallB to BigB. He wanted to target big enterprises with at least 1000+ people, as a result he was selling to IT departments and CIO’s had to sign off on the purchase on business value basis.

In his mind my friend had a innovative product, it would lead to significant business value and cost savings and there should be a desire to make the paradigm shift.  As he explained his value proposition I was convinced of the same and the thought that struck me was that  he must be  very successful and for sure is raking in huge bucks.  To my surprise he hardly had any POC candidates let alone real customers. I was shell-shocked.  After more conversations over a few beers I realized that it doesn’t matter what product or value proposition you are selling to large enterprises when it comes to SmallB selling to BigB is a huge challenge.  The major reasons why it is a challenge (definitely not an exhaustive list) are:

    • Getting to meet CIOs is a herculean task and to be able to navigate the murky waters of the organization before you get to them is very time consuming(and expensive). From an experience basis in most situations getting to meet them at a client’s place for start-up solutions has a 1 in 20 probability.
    • There are not even a handful of events that have Indian CIO’s focused on Innovation, Most of them are very expensive when you calculate the total costs incurred by start-ups. Entry itself is north of Rs 50,000, then to add a stall and have staff there to man it and put up collateral costs upwards of Rupees. If you do not have a stall then one is left chasing people and handing them business cards – that surely does not lead to sale. You add travel and other costs to it, the costs go up so much that it is impossible for a startup like ours to participate (most events happen in Mumbai, Delhi or Goa)
    • There are many other inexpensive smaller events and they promise CIOs as part of their promotion. However the reality is that mostIndian CIOs never turn up for such events and in tune they send their IT folks who generally don’t have the decision making powers.
    • Assume somehow you did make contact to these CIOs and you were able to mention the value proposition and they liked it, you later need to do several trips to their head office to meet several stake holders, get all their approvals and finally get a nod to do a pilot; all such trips add up huge to your expenses
    • Worse inspite of the value propositions you show, remember the tag line – you can never lose your job if you go with IBM. Even when you manage to get through that almost insurmountable barrier the progress of pilots is slow. One ends up making trips to demonstrate commitment and to push for progress on the the Pilot. Unfortunately sometimes the start-ups get play to justify other purchases as they will never pass the smell test of strong financials or references for procurement departments of large enterprises..
    • On the other hand big brands have deep pockets, large sales force, strong reseller base and reach out to these clients easily. The clients find it easier to trust them due to their relationships and safety trumps agility and foundation of innovation of startups.

 

If these are a sample of challenegs that you have to go through to try to get a Pilot then imagine the travails of having international clients take you seriously. Imagine trying to do all of the above for potential Global customers.  Also one of the situations he ran across was people in the Indian IT departments advising him to try and get some global customers for credibility.. It seems contrary to the saying that says win at home first to win outside! –To be able to do the same would require significant funding or leap of faith!  Interestingly some of the VC’s loved his product and were ready to invest but with a caveat – they say can you possibly get some Pilots in US and demonstrate success there –  – WHAT????

Just a return ticket to Mumbai and a couple of days stay costs me more than 25K and these people are talking about attending CIO events in USA and then doing pilots in the US market.  Interestingly attending CIO events in USA is not cheap and most of the big ones there (Evanta, HMS, CIO Summit etc.) require vendors to pay hefty sponsorships (starting at US$20,000 to attend)Does this mean that SmallB with small budgets should just not have the vision to build enterprise products even if they have the ideas to solve some of the pressing problems?

Wish there was a way to enter bigger markets that were more focused on innovation and were willing to try out new ideas to make a big difference. . Wish there was a way to showcase to Global CIOs in a manner that did not mean dipping into all the savings in one trip. Keep wishing…

Thankfully I got to meet another CEO of a successful product company from India who passed this litmus test.   He was a case in point that a SmallB can actually sell to BigB. Today his revenues are upwards of $100M but it takes time, patience & money.  He achieved it by doing services on the side and investing that money into marketing the product. His mantra is, there is no shortcut for a SmallBto sell into BigB.  You have to spend quality time with CIOs who are willing to see the vision of the start-ups and drive decision making to make things happen.  Face time and getting early customers is the trick and he concluded by saying that SmallB selling to BigB is where the real money is 🙂

That’s when I ran into InTech50.  They are bringing  25 Global CIOs and 25 Indian CIOs , Product M&A folks, VC’s and media all under a single roof.  They are also bringing the entourage to Bangalore and will utilize their skills and knowledge to select the 50 that get to be at the event to present to them.  In effect they have already expressed an interest in your company if you are selected to be there.  There is no cost to apply!

I think we – the enterprise product companies from India should grab this opportunity and make every effort so that we make it to the list.

Would love to hear comments form entrepreneurs who are playing in the enterprise product selling into big enterprises.

100 minds – 8 mins with each.

In simple maths, every one of the 100 who saw the videos, was kept engaged for at least 8 minutes. Assuming they didn’t see all of the videos – a sales guy was around to continue conversations.

Humans have recently surpassed the attention span of a goldfish. And you thought keeping a goldfish engaged was easy….

Knowcross sells a service automation and management software to Hotels. It’s called Triton. Some of the world’s reputed hotels are their customers. For good reason – the tool is just remarkable to see at work.

Recently they attended HiTec – world’s largest and most expansive hospitality technology event.

“We were one of the last to book our space and we missed the best spots on the floor. Even with that, we managed to get about 200 people to the booth in 3 days. And about half of them we kept engaged through a touchscreen that played the 8 videos.”

Neha Singh | Senior Manager Marketing at Triton

 

Here are the 8 videos in their glory.

Triton EngineeringTriton MobileTriton SupervisorTriton Attendant

 

 

 

Content is one of those things a marketer has to spend money on. The pursuit, however – is to find the highest ROI from content. 

Here are 3 things that made their conference content investment a high return exercise:

1. Spray it. Don’t just say it.

Pepper your audience with multiple small bite sized information.

When you are expecting guests – as in a trade show particularly – try to put up more than a single piece of information.

So 100 brochures is great. But a choice between 20 each of 5 types of brochures – is a better idea. Within the first audience set (5 – 10 people), you’d know which brochures to send the mascot with.

“The 37 inch touchscreen had an application running. So after they see one video, they’d be presented with another one, and then another. This allowed us to comprehensively cover the product and its propositions without them getting bored with one long video. ”

– Neha Singh. senior Manager Marketing at Triton.

2. Address different causes.

If you can solve my problem – tell me how much you’ll charge. You’ve got 8 seconds. Go.

So Engineering has its own problems. Housekeeping has its own problems. The management has its own problems. And individuals within these units – have their own problems.

For Engineering – they made a different story – connected to the engineering’s cause. See this.
For Housekeeping – they made a different story – connected to the housekeeping’s cause. See this.
And for Senior Management – they made a more overarching story – connected to the business’ cause. See this.

So if Joe the CEO wanted to check with Bob the CTO – they would both just huddle at the booth. There’s a bunch of smartie pants ready to answer questions.

Instant gratification as many cultures call it.

3. Consistent and simple visuals

We eat with our eyes – as taught in culinary schools. That’s why plating is important.

Did your eyes catch the variation in the color RED above ?

In their case, the characters were simple with little detailing. So there was no distraction. And the colors and icons are consistent.

See the image to the left – there are 3 slides one below the other.

Did your eyes catch the slight change in color?

Imagine how distracted you’d get if the characters, scenes, music, or even narrator’s voice changed on each video. 

They got this done from a single creative team. A set of minds that didn’t change during the production process. This ensured visuals and audio and the look n feel and the sounds and voices – were all synchronized. Everything looks and sounds in sync.

Its like Ballet.

So the costumes were same colors. The characters were similar. The situations and icons were similar. Think different episodes of a television series.

If you have dabbled in Video marketing, what kind of results have you got from your initiatives? I would love to hear your thoughts.

The Who, What, When, Why and How of Consumerization of the Enterprise

Users of enterprise software marvel at the ease of use of facebook, twitter and gmail on their mobiles, tablet computers and desktops! Then they wonder why their enterprise software should not be as easy to use or at least be available from their own devices. The CEO wonders why she cannot see the company graphs and charts in vibrant colors on her iPad at home on her sofa, while watching TV! This is where the consumerization of the enterprise sets up expectations of mobility, flexibility, ease of use and at a minimum, just being able to access enterprise applications from these other devices!

Consumerization of the enterprise is exciting from an end user point of view, but brings with it a number of new issues of security, availability, and application responsiveness that need to be addressed by the enterprise software maker or the IT department. Enterprise software product start-ups need to take this trend very seriously since mobiles and tablets are getting only more powerful, less expensive, and ubiquitous. By the time they mature and emerge from a start-up stage, this may not be a nice to have but a must have. So, here’s a Who, What, When, Why and How of Consumerization of Enterprise Software. This is a rather involved subject to be covered in a single article. I will cover the basics and provide links to additional material as appropriate.

The Why

Users of enterprise applications like the mobility that comes with smartphones and tablet computers. They see fairly sophisticated things done with these devices in their personal lives and are wondering why the same should not be true of their enterprise applications! They see that these devices are powerful computers in their own right and are wondering why they should not be using them for work.

The What

Consumerization results in a number of new expectations of enterprise software – use of inexpensive commodity servers for hosting the application if on-premises or a Software As a Service (SaaS) model, browser based interfaces, access from mobile devices and ease of use that matches consumer applications like Google, Twitter and Facebook. Consumerization involves the design and implementation of Bring Your Own Device (BYOD) policies where employees use their own devices to access enterprise applications and data. What happens to the enterprise data that may be stored on them,  if they lose this device or it gets stolen? What happens when this employee leaves the company? How do you make sure that the company data or the applications are no longer accessible?

The When

In many developed countries, smartphones and tablet computer penetration are near saturation already with many individuals and households having many of these devices, each. In India, the annual penetration and total market saturation may be lesser but it is only a matter of time. Even in India,  at the C-Suite level usage of these devices may be pretty much near saturation. So it’s not a question of if, but only a matter of when. This is especially important to enterprise start-ups that will face all of these issues by the time they have their products ready and achieve market fit.

The Who

Consumerization involves a host of policy and technology issues. Not all of them could be resolved only with the software product maker or the IT department. Access to applications and data may be policy issues to be determined by management and implemented by the IT security folks within the company. Software designers may need to address the ease of use issues that bring the enterprise applications closer in user experience to popular consumer applications like Google, Twitter and facebook.

The How

Consumerization involves making the user interface of the enterprise application on mobile devices, easy-to-use like those of consumer applications, native or HTML5 based. Bring Your Own Device policy implementation may involve the use of Mobile Device Management (MDM)  software which allows organizations to register and allow only authorized devices to access enterprise applications. In case employees need to be allowed access only to certain applications and not to others selectively, Mobile Application Management (MAM) software may need to be used. Chris Swan presents these issues in a very organized and understandable fashion in a video here and a presentation here, in case someone wants to dive deeper into the technology issues.

Consumerization of the Enterprise is about managing the expectations of the users of enterprise applications properly; answering questions such as – why can’t I use my smartphone or tablet to access the company’s application? Why shouldn’t their interfaces be as easy-to-use as my Gmail, Twitter or facebook? The technology and the design approaches for making this happen are already there. It’s only through careful analysis and addressing of issues that these objectives can be met, while at the same time balancing other issues such as security of data and applications!

Water cooler chatter 15 years ago used to be about what happened on Seinfeld. Now it’s ‘Look at what I’m doing on the enterprise network with my mobile device. – Bob Egan, vice president of mobile strategy at Mobiquity

First B2B Bootcamp for product startups – last day to apply

The last date to apply for this bootcamp has been extended to 16th August especially for Product Nation subscribers.

TiE-IQ Bootcamp is a no contract and free  60-day bootcamp where the participating startups will have an opportunity to create products, launch companies and walk away with their spoils and a lot of learning.

This first edition of the TiE-IQ Bootcamp is restricted to B2B technology product startups. It builds up on the successful bootcamp conducted by IQ earlier this year. Selected startups will walk in to the TiE-IQ Bootcamp with just a minimum viable product (MVP) and take back the following :

  1. Mentorship and Workshops by entrepreneurs leading successful startups to help you.
    • Refine and finish the minimal viable product (MVP) into a ready to buy product
    • Market your product
    • Get the first few customers
  2. Peer Learning
    • Learn from some of the best startup brains developing B2B products alongside.
  3. Working Space for two months in the heart of Mumbai.
  4. Software credits with some of the bootcamp partners
  5. Interaction with some of the best brains in the venture investment world.
  6. Demo Day: Your chance to pitch to investors in Mumbai  (and Bangalore – to be confirmed)

Who should Apply?

  • Enterprising (co-)founders and technology enthusiasts who want to build disruptive technology products or services for the Indian or global market.
  • Teams with 2-3 members that are capable to design, code and release a beta version of their product to market & sell it.

How to Apply?

To apply, visit this page for more details on eligibility criteria, and how to apply. The last date is extended to 16th August exclusively for Product Nation subscribers. For updates follow the twitter hashtag #TieBootCamp.

 

Are you a #MadeInIndia Software product company that sells to Enterprise segment?

Do you like to share the success on a global platform? Here is your golden opportunity…..don’t miss it!! The members of this exclusive group are the best and brightest CIOs from some of the cream of the global companies like Aetna, Bechtel, Boeing, BP, Caterpillar, Disney, Dow, ExxonMobil, FedEx, Ford, GM, Goldman Sachs, Honeywell, JPMChase, McDonalds, MetLife, Pfizer, P&G, Starbucks, Shell, Toyota, Wal-Mart, etc. to mention a few. The exceptional quality of the actively participatory membership and the prohibition against attendance by substitutes is the cornerstone of the value proposition of this group. Their meetings include a range of guests, starting with top executives of major industry firms. Steve Ballmer, John Chambers, Michael Dell, Ginni Rometty, Sheryl Sandberg, Joe Tucci and Meg Whitman have all participated, usually repeatedly. They are based our of US and they are coming to our doorsteps, to be precise, to Bangalore to see our product and how it can do in the global market and this I feel is a golden opportunity for all Indian product companies including startups to demo your product in front of the group representative.

The group I am talking about is CIO Strategy Exchange (CIOSE) and you can find all about it here ciose.com. Its director Ernest M. von Simson (Ernie) will be in Bangalore during last week of February to hear to your business impact of selected top 7 product companies from India and here is the opportunity to be that top 7.

If you feel you have a great business impact story that you wish to share and if you have global aspirations and you are missing that global networking opportunity, here is your opportunity. If you feel you are eligible and ready to showcase your product, please apply online before 7th February 2013. Looking forward to seeing all here.

This initiative is jointly conducted by ProductNation and CIOSE. If you any questions or concerns please reach out to Avinash(at)pn.ispirt.in or Manju.M(at)i7nw.com.

How far should you go with Professional Services in your product business?

Turning on a giant switch

For any products company, product support is a given, and part of the products business fabric. However, almost all Enterprise Products Companies end-up offering the professional services beyond basic product support. These services could range from simplistic implementation support, to integration, to solutions-building, to architectural consulting, to IT advisory support. The decision to perform professional services could be driven by customer-demand, or by the intrinsic need of the product being sold, or even driven by the business strategy itself to generate peripheral revenue.

It’s important to understand where the boundaries lie, and what goal does a certain type of professional services serve. The decision to commit to a particular type of professional services needs to be driven by a conscious thought process. This is important because the time & resources required to build various skills & operating models for serving the various flavors, change dramatically from one to the other.

Professional Services in Products Business

1. Product Support

This is the core to the products model and serves as just that – support to the main products revenue, and to ensure customer satisfaction. While the core strategy for any product should be to make it so good that it requires minimal support, there’s always a need for support – offline and real-time for the customers.

2. Implementation Services

An ideal product is ready-to-use off-the-shelf, however, in case of Enterprise products the need to configure & customize could wary. Most times, customers demand for an implementation service packaged in the license deal initially, in order to ensure success. Most times, products businesses have to employ this mechanism also to close sales cycle and to ensure a consistent source of post-sale revenue from such services, and also indirectly to ensure expansion of the product usage through consistent personnel presence on the customer premises.

3. Integration Services

This is where it starts going slightly further away from the core skills that the organization may possess organically. Integration with the existing IT systems and other products at the customer premises would require the skills & management practices beyond the core areas of the organization. An extra source of revenue is one of the temptations, but there are also scenarios where integration of the product is critical to the success of the product, making such services mandatory. This is especially true if the product interfaces are not built with open-standards, and require the integrators to know the details of how the product is built internally. The correct approach would be to build the product interfaces in a way that doesn’t force the business into such compromise to induct professional services for integration. There’s an indirect impact of diversion of core product resources to such integration projects unless such professional services are pursued by design, and resources built accordingly.

4. Solutions & Consulting Services

This is where the game gets strategic, and resources expensive. And the reasons to do this are not any more intrinsically important, but strategically targeted to higher value to the customers and hence, access to the larger pie of the wallet. However, this is easier said than done. Unless there’s enough scale & case in the existing business to allow the focus on such services, strategic, and by design, a business is better off focusing on building the core products business stronger by investing resources there. This makes sense for the products, which are more like Platforms that provide larger leverage than in a Point-solution product.

5. Advisory Services

This is important for the products that are targeted for larger ticket sizes and are built for Enterprise-wide deployments. The IT strategy alignment as well as the strategic positioning of the product becomes important, and it also requires much larger IT leadership level involvement. For Enterprise Platforms, or even for departmental level strategic investments, this approach to professional services can bear fruits. However, building it into a business line requires the core product business to be strong, ready for the leap.

So what?

While the Businesses can look at starting off with the lower scale of Professional Services and build up over time, the decision is very strategic and long term. Professional Services, while offering additional top-line, could actually be a resource-intensice and money-draining proposition if not built properly. The mindset that governs the professional services line of business is drastically different from the product side of business. The operational efficiency is paramount, & profitability can very quickly take a hit. Even more importantly, professional services are more intensely people-driven and the skill sets required to build and sustain this business over long term are not trivial. Look, think, and think hard, before you leap.

PS: There are other considerations on Professional Services that directly or indirectly impact the core product business. I will cover in those in the next post. Until then, hope this helps! 🙂

8 Perspectives on Software Vendors to Watch in 2013

SandHill’s questions on predictions as to how the software vendor landscape will change in 2013 found agreement among industry observers about the changes facing legacy software powerhouses. The questions also sparked tirades about Microsoft. Dive into their perspectives on the difficult challenges and necessary “rebooting” ahead.

Q: Which three to five software vendors will face the most dramatic change to their business in 2013?

Peter AuditorePeter Auditore, principal researcher at Asterias Research:  SAP, Oracle and Microsoft will face the greatest challenge to their business models as the disruptive SaaS and cloud vendors begin eating their installed base with new and innovative licensing models that completely change the enterprise software space.

SAP in particular is in an extremely weak position as it has been unable to bring one single SaaS or cloud product to market. Business By Design, Streamworks, Sales On Demand and Sourcing on Demand along with the massive push on sustainability have missed the mark and completely failed.

IBM and Oracle will gain tremendous competitive advantage with hardware software offerings at price performance levels other vendors can’t meet.

Paul Resslerprincipal, The Cirrostratus Group:

  • Cisco, who we often don’t think of as a software vendor, will make significant product changes to address the software-controlled network business.
  • VMware will make some sort of major acquisition that will put them into the network infrastructure business, giving them the opportunity to dominate the software-controlled network space.
  • HP will try to develop a more focused enterprise software strategy. This will result in continued upheaval in their business including niche acquisitions and significant layoffs. Unfortunately it will not be clear by the end of 2013 whether this strategy will be successful.
  • BYOD (bring your own device) and increased use of mobile enterprise applications will put tremendous pressure on managing mobile security. Symantec will be well positioned to provide mobile security solutions and will provide many new offerings in this space and go through lots of growth. Other major software providers will make acquisitions in the security space to compete.

Read the complete article at Sandhill.com

Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities, Piyush Singh, CIO, Great American Insurance Co.

Piyush Singh is the Chief Information Office (CIO) and Senior Vice President at the Great American Insurance Company—a property and casualty insurance company, and Vice President of it’s parent company, American Financial Group [NYSE:AFG]. Under his direction and vision, Great American’s IT department has transitioned from supporting a legacy IT environment to become a trusted player in the company’s business success—offering agility and adaptability to align with the executive vision. In this interview, Mr. Singh shares his observations on innovation in Indian software companies, product development, and how large IT companies could accelerate the pace of product innovation. 

Piyush, you have been watching the Indian software industry over a period of time. What are some of the changes you see now especially in the context of the software product industry in India?

The Indian software Industry is the envy of many countries around the world, and numerous governments and business associations have been trying to emulate its model. It has made a significant difference in elevating the professional services job market and provided the necessary fillip to the country’s infrastructure—transforming sleepy suburbs into high-tech cities with world-class facilities. The Indian software Industry contributes $67B to the economy in direct revenue, but delivers a bigger economic impact (probably tenfold) when you think of all the tertiary employment it generates and the indirect revenues created.

Yet, this phenomenal growth has been a result of labor pricing arbitrage, and many of the large companies that lead the software services are today challenged by lack of innovation and intellectual property (IP). Yes, outsourcing and large services contracts are definitely attractive but unsustainable in the long-term. Sustainable growth and maintaining unique value propositions demand significant investment in IP—and this needs to be more than just systematizing processes. I do not see IT services companies investing in actual development of product portfolios that might address vertical markets or provide horizontal solutions. Typically, I see global services brands create deliberate pools of internal innovation that harnesses the knowledge of its workforce or buy IP-based companies to provide them the necessary scale for reach and investment. So far, I’ve seen neither processes here, but am hopeful that this will change.

Culturally, do you think Indians (and this is very broad considering our diversity) are risk takers and willing to start out businesses? Or are they averse to taking risks?

I don’t think so, and there are numerous examples of our appetite for risk—numerous Indians in the Silicon Valley have taken their start-ups all the way to public offerings. What I have noticed is, we tend to invest in real estate—really investing for the long haul.

Today, I find ourselves increasingly accepting entrepreneurship and its risks, even as senior executives leave large corporations to do something more meaningful, and different. But these new companies will need significant capital and gestation periods before they begin to show results. This is in contrast to the services industry growth that sets an average 20-30% growth every year—leaving start-ups struggling to showcase such growth. The risks and returns are completely different in a product company—Oracle, SAP, Microsoft, Apple are all shining examples of IP-led revenue-generators. Their valuation and market sizes are incredibly spectacular. But they didn’t grow into such successes overnight.

Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities. These evolutions take time, effort, and capital—ask any Silicon Valley venture capitalist.

On the other hand, if you read the balance sheets of many of the services firms, they have idle cash, and great market reach. It will be a win-win for all if they use the cash to fund or accelerate the incubation of products that they can take back to their markets.

What is your take on emerging companies in the product space? We see, for example, many of them are developing apps and very few seem to be venturing into the enterprise or B2B space. Do you agree?

I agree completely. In the insurance space, for example, of all the companies out of India I’ve worked with, only a few have made any real IP investments—MajescoMastek, PlanetSoft (acquired by Ebix), L&T Infotech, and Mphasis. But if you see the revenue portfolio of the top 200 services firms out of India, the financial services industry is a leader in driving investments. And only a handful companies have made any IP-led investments. Strange, don’t you think?

What’s interesting is that it’s not that India doesn’t have the talent: every large US-based company (Microsoft, HP, Cisco, IBM) have a lot of product development out of India. The capabilities and talent definitely exists—we need the larger Indian companies to show the way.  They should make use of the talent that exists in their own setups, sponsor ideation, build incubators and make a directional investment in product development. They should stand up to explain their actions and the promise it holds. Analysts might not like the idea initially as it does not fit in their current forecasting models  but as they realize the potential and see results over time, they will warm up to the concept and probably push for higher investment. I would argue that Indian companies do bring in a lot of process expertise in any project that they manage, so  they can definitely build processes that would seek ideation and lead to valuable IP.

What’s your view on innovation in the Corporate environments?

Innovation has become a necessity for existence. As Robert Murdoch, Chairman and CEO of News Corp aptly said, “The world is changing very fast.  Big will not beat small anymore.  It will be the fast beating the slow.”  Innovation is being taken out of R&D labs and becoming the fabric of the entire company and an integral part of the culture at all levels. If it’s not happening, it can hurt them. Look at what’s happened to Kodak—they invented the digital camera concept but now the only value left is in the patents which they filed.    Blackberry (RIM) is facing a similar situation – in May of 2008, of the corporate companies surveyed 82% of them were looking at buying RIM based Blackberry’s.  Their lack of innovation in the world of user experience design has left them in a situation no one wants their company to be.

Do you think a major contributing factor in the last couple of years has been contributed by bandwidth availability, relatively easier capital and technology disruptions from areas like cloud computing? Have these leveled the playing field?

Well, these not only level the playing field but also give you an opportunity to differentiate your offering. For example, cloud computing levels the playing field, making it a lot easier for people to invest in or explore new products as long as you provide open integration points,a level of flexibility and a blueprint for future innovation. Commoditization brings prices down but forces you to decide on the USP that would help your company stand out.  You need to balance commodity with strong uniqueness so you can leverage both benefits. People who are going to be nimble and fast, and people who respond to these paradigm shifts are going to emerge the winner.  The key lies in how quickly you react to market forces and how adaptable you are. Any country that can produce a model of constant adaptability becomes a much more stronger player in the long haul.

Five years ago a typical software strategy didn’t take into account elements like user experience design, predictable analytics/big data, mobility and enterprise social networking. If you’re a ten-year old product company or a large services firm, it’s a little tougher to make a shift to embrace these elements. If you’re a smaller company though, and you’re nimble and watching these trends closely you can adapt to them quickly. It depends on how leading edge you are, because people are always talking in the context of ‘now.’ Mobility has been on the forefront since early 2008—but companies are still exploring mobile apps. Big data has been there for 3 plus years—but how many people are truly exploiting the value of this data? Enterprise social networking helps companies capitalize on people, collaboration and sharing better. It provides individuals more command and control—if the person at the lowest level comes up with a bright idea, everybody knows who to give credit to!

So you Piyush – if you had to give some advise to product companies or people who are venturing into the software product element India, what would you say?

  • Identify a domain where you see that there is market opportunity and don’t look at what is currently being offered as a solution.  Try to look 3 years ahead and try to build it around the emerging model of doing business—it’s about how you’re going to do business tomorrow, not how people work today.
  • You’ve got to balance domain expertise with people from outside so that you can think differently. You can’t have people who think the same way all the time. You need to understand how to incorporate User Experience Design—making people react and say “It is obvious.” Product companies have the advantage of disrupting the existing ways and changing the model—that’s what DELL did with PCs, Amazon with the book store, and Netflix changed movie watching at home.
  • You should be willing to find a charter partner who can help you to bring about change and  break the current paradigm.  Once you have this, you’re on the path to building a product that will succeed.
  • Don’t just be happy with what you have and what you build. You really have to be dissatisfied with the present and galvanize resources into action. This requires a fundamental shift in the group mindset, how we operate and how the company is structured. We need to learn from the old Chinese saying ‘let a thousand flowers bloom’ – not just the management ranks!
  • Don’t make random calls and hope that there will be sales. Learn the market, understand the potential buyer fully and then target with laser focus. Do not take a shot gun approach and hope that it succeeds.

Which 5 product companies or fields are you interested in meeting?

I would rather choose three fields that are of interest for me:

  • Companies that are working in the insurance sector – what are they doing and what’s innovative
  • Companies involved in infrastructure–what are you doing to improve the end user experience/reliability and availability in the modern complex world
  • Companies that are involved in new and novel concepts that challenges any business model. I want to be challenged to look outside my standard thinking model.

If you are keen to meet with Piyush at NPC. Do drop in a mail to us at [email protected] and we will get back to you.

Fullerton India – Revolutionizing India

At a time when “Cloud” was still a buzz word and “Platform as a Service” as a category didn’t exist, Fullerton India was looking  for the next generation computing technology to help them build business applications faster, cheaper, better.  Fullerton India stumbled across OrangeScape Platform (formerly known as DimensionN). They realized that the conventional approach to build a whole host of of application in the “White Space” area will be heavily time consuming taking anywhere between 30 to 90 days for an application.

And, added to that complexity, these applications change every other week and change management becomes a huge challenge. OrangeScape helped Fulllerton to fill this gap by providing a platform approach not only to build these new applications, workflows as per their business process but also to frequently upgrade them as the business need changes. Listen to Pramod!

Mr. Pramod Krishnamurthy who as EVP – Technology (2005 – 2010) at Fullerton India Credit Corporation Ltd. (FIC) talks about his discovery of OrangeScape and how he adopted our platform which ultimately resulted in their IT team building business apps faster than they would have done in the traditional mode.

Pramod shares more on this success story over a video here and ends with a message to his peers on cloud adoption and working along with emerging companies. Pramod is currently CTO at Birla Sun Life Insurance.

Watch the Video on the Organgescape blog