PS Best Practices in the Cloud

Begun Consulting

© Begun Consulting 2009, 2010

PS in the Cloud © Begun Consulting 2009, 2010

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Study Process

• Best practices interviews– 10 companies– CEO or VP/Director of PS or Services– Mix of sizes, software types, and maturity

levels

• Follow-up written survey

PS in the Cloud © Begun Consulting 2009, 2010

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SELECTED DATA -- PARTICIPATING COMPANIES

Highest Lowest Average(wIthout outliers)

Person time to implement (average, in hours) 4500 3 500Elapsed time to implement (average, in days) 100 30 80Average annual subscription revenue per cust ($1000) 1500 8 225Initial services revenue per cust ($1000) 350 2 180Initial services revenue / annual subscription revenue 75% 25% 50%Consultant billing rate $250 $90 $145% implementations that are fixed price 100% 2% 80%

Annual Revenue ($million) 900 30 300Customers 4000 15 1100Years operating under SaaS model 12 1 7Product complexity rating (1-10, 10 = most complex) 10 1 5.5

PS in the Cloud © Begun Consulting 2009, 2010

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PS Best Practices in the Cloud-

Study Highlights

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Client Services Themes

• Very broad range of delivery effort– Delivery effort/time varies considerably– Different models (within vendor) for different

customer bases and/or product configurations– Goal is to minimize implementation time, both

person (especially vendor) and elapsed • Self service is not necessarily seen as goal

• Customer expectation setting is a key factor that impacts most important metrics

PS in the Cloud © Begun Consulting 2009, 2010

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Client Services Themes (cont)

• Continual customer satisfaction and success are critical– Key to retention and increased adoption/usage– Not just a services responsibility

• Must be a pervasive company value and strategy, not an afterthought or band-aid

• DNA matters, both vendor’s and customer’s

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Services Effort Dependencies• Complexity of problem that software solves

– Complexity dimensions (both quantity and complexity within dimensions matter)

• Transaction processing• Workflow• Data integration• Analytics• Features / functions• Rules

• Customer expectations, motivation, cooperation, and capabilities

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PS in the Cloud © Begun Consulting 2009, 2010

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Services Effort Dependencies (cont)

• Product maturity and x-abilities– Broad and easy configurability is the key

• Tailored services models and phasing• Services infrastructure maturity

– Methodology and process– Tools (e.g., templates) and systems – Project discipline & customer management– Staff skillsets

As companies mature, these improve

PS in the Cloud © Begun Consulting 2009, 2010

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Factors Impacting Customer Sat & Increased Subscription

Revenue

• Product features/functions

• Customer expectation setting in pre-sales

• Active post-sales management

• More/better self-service capabilities

• More/better training/education

PS in the Cloud © Begun Consulting 2009, 2010

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Services Metrics

• Customer retention, satisfaction, usage

• Person hours to implement

• Services margin

• Days to-live

• Initial services revenue - as % of ARR

• Support case close time, initial response time, and cases per support person

PS in the Cloud © Begun Consulting 2009, 2010

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PS Best Practices in the Cloud-

Other Significant Findings

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Pre-Sales

• PS involvement if non-standard and/or complex– Otherwise sell implementation packages– Tools help standardize and contain scope

• Focus on customer approach and attitude as well as feature/function needs

• Expectation setting is critical

PS in the Cloud © Begun Consulting 2009, 2010

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Activation / Implementation

• Vendor effort from 3 hours to mid 1000s– Multiple models, 100% self-service at low end

• Minimize data integration work

• Tools are important - templates, task lists, configurators, pre-configured systems

• Process - phasing, discipline, assurance

• Consultants - less technical, remote

PS in the Cloud © Begun Consulting 2009, 2010

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Training• Pervasive, all types of media, role-based

• Becomes critical when implementation is significantly self-service

• Typically included in subscription fee

• Low touch for orientation and in-context; low/no touch at low end; higher touch is part of implementation

• Training and documentation coordinated

PS in the Cloud © Begun Consulting 2009, 2010

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Technical Support

• Self service is key to leverage– Knowledgebases– How ‘to’s

• Traditional organizational structure, case management, and metrics– Web emphasis as media– Segment cases - ops, how to, product

• Career path of engineers to implementation

PS in the Cloud © Begun Consulting 2009, 2010

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Post Sales Support & Add-ons

• Approach ranges from opportunistic to aggressive

• Premium tech support

• Follow-on training

• Additional implementation, optimization

• Add-ons -- report writing, admin, reviews

• Delivered ad hoc (T&M or fixed) or via TAM (mainly for larger customers)

PS in the Cloud © Begun Consulting 2009, 2010

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Partners (Implementation)

• In general not as prevalent as in traditional software companies

• Used more for complex applications and when company mature

• Some use at low end, ‘solution center’

• Some do not use at all and point to as success criteria

PS in the Cloud © Begun Consulting 2009, 2010

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PS Best Practices in the Cloud -

Key Survey Results

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Greatest impact on DECREASING VENDOR PERSON-TIME for initial activation / implementation

Customer expectation setting in sales cycle

Product configurability improvements

Customer self-service capabilities

Greatest impact on DECREASING ELAPSED TIME for initial activation / implementation

Configuration tools

Product configurability improvements

Customer expectation setting in sales cycle

Product feature/function enhancements

Customer expectation setting in sales cycle

Active post-sales relationship management

Greatest impact on INCREASING CUSTOMER SATISFACTION

PS in the Cloud © Begun Consulting 2009, 2010

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Active post-sales relationship management

Product feature/function enhancements

Greatest impact on INCREASING SUBSCRIPTION REVENUE

MOST DIFFICULT TO IMPLEMENT

Customer expectation setting in sales cycle

Customer self-service implementation capabilities

Technical support self-service improvements

MOST POSITIVE OVERALL IMPACT ON BUSINESS

Customer expectation setting in sales cycle

More and better self service implementation capabilities

PS in the Cloud © Begun Consulting 2009, 2010

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MOST IMPORTANT COMPANY METRICS

Profit

Customer satisfaction

Customer retention

Revenue

Customer retention

Person time for initial implementation

Customer satisfaction

MOST IMPORTANT SERVICES METRICS

Regular customer reviews

Premium level support

Ongoing retained consultant (e.g., technical account manager, dedicated analyst)

PREVALANCE OF ADD-ON SERVICES

PS in the Cloud © Begun Consulting 2009, 2010

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If you have any comments or questions, or would like to discuss aspects of the study in more detail, please contact:

Alvin BegunBegun Consulting

abegun@begunconsulting.com(650) 533-4950