Productise For Repeatability and Profit

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We work with a number of partners to help them to optimise their overall business and associated vendor engagement. Something that comes up regularly is whether or not a business should invest and create a specialist “practice”. i.e. Security, Cloud, UC, Disaster Recovery/Business Continuity etc.

The primary benefit of building a practise comes from the repeatability or “productisation” of the solution. This results in improved productivity and therefore improved profits. However, before we go much further, it is important we define what a practice is.

We would classify a practice as a deep specialisation or technical focus with repeatable solutions that complement the partner’s overall activities and help to differentiate their customer offering. The key word here is repeatable.

No solution can be 100% repeatable as there will always be differing customer needs, environments, budgets, locations etc that will require some bespoke work or tailoring. Therefore, some flexibility to tailor the remainder of the solution should be retained so it does not become a cookie cutter or one size fits all approach.

There are 4 functional areas that need to be standardised and documented to become repeatable “products”. These are as follows:

1. Pre-Sales
2. Post Sales
3. Sales Tools and Processes
4. Marketing Tools and Processes

Productisation only makes sense if the volumes of the solution being sold are sufficient to warrant the investment required, and if the total solution across these 4 Functional Areas can be standardised to be approximately 80% repeatable.

So how do you go about building a “practice”?

Channel Dynamics uses the seven step process outlined below as the practice building framework:

 

Not surprisingly, some partners do not get past the assessment phase of the process, which often is a good thing. There is no point in developing or investing in a market or set of skills that is not going to deliver the required returns to your business.

The four key questions we have partners answer at the end of the Assessment phase (before committing to the remaining practice building process) are:

1. How long will it take to get the productised solution to market?
2. What is the “opportunity cost” for developing the solution and the practice?
3. What is the longevity of the core solution and can other complementary products or services be included to broaden & deepen the practice?
4. Do the financial returns or measures stack up?
If there is agreement by management and the key engineering resources around these questions that indicate specialisation is right for your business, only then should you move to the next step of productisation.
Productisation in our experience is the hardest step in the practice building process for most partners. It requires significant time and resource to document the solution, generally by senior Professional Services resources, who are usually in high demand by the sales team or customers.
A top tip to help with the documentation process is to work with the key technology vendor at the centre of the solution. It is important to leverage their base Professional Services documentation, and then adapt to the specific practice requirements. Most vendors will be keen to support partners in a practice that has been built around their technology.

The benefits of productisation and the associated repeatability result in improved partner profitability. These improvements are driven by internal resourcing predictability and productivity of both sales and technical teams. Externally it helps improve customer satisfaction as the sales and delivery cycle becomes shorter and more predictable with less re-works or scope creep.

In conclusion, we have seen partners that have committed to building a practice often double the profitability of that solution, while increasing their typical order size and shortening the sales cycle. If a practise makes sense for your business, the end result can pay handsome dividends