Should Software Vendors Also Sell Professional Services?
Oliver Marks, writing for ZDNet on Jive Software’s announcement that they’ve rebranded Clearspace as Social Business Software (SBS), points out the elephant in the room for large software rollouts:
The reality for all ’social community’ roll outs is that the software is a relatively minor component compared to the change management required to drive uptake and usage and to weave the software into the business fabric of day to day use.
This, more than the choice of software, is the point of failure or success. Even software that’s not absolutely 100% suited to an organization’s needs (which, frankly, is the case for even the best software) can make a positive impact on day-to-day business with the right approach and effort to get people using it.
Oliver and Gia Lyons of Jive discussed this further in the comments on Dennis Howlett’s article about the the effort needed to get people engaged. Gia says:
We should probably get you up to speed about what we do in Jive Strategic Consulting then. Most of what we do could be done with almost any other social software tool, but naturally, we only make ourselves available to Jive customers.
There’s the problem. If most of what they do could be done with other software, then why only make themselves available to Jive customers? After all, isn’t professional services an even larger source of revenue than the software? That’s how SharePoint works. Microsoft sells a basic infrastructure on which lots of 3rd party consultants build and customize tools that meet each company’s needs.
When a software company sets up a consulting operation, it’s serving its own self-interest because the motivation (contrary to what anyone at a software vendor will tell you) is to ensure that the customer keeps paying for the software year after year. As Oliver says:
Share Should Software Vendors Also Sell Professional Services?There’s a world of difference between vendor sales follow through and professional services, and objective unbiased strategic planning around what a collaboration environment is for and how it should be used.
Not to take anything away from the great work you do at Jive, but inevitably vendors are always proving themselves right and validating the sale.
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Chris Yeh says:
Mar 11th, 2009
I think that companies need to provide some professional services simply because of the chicken-and-egg problem. It’s hard to make sure that as you’re launching a new product, that you’re also able to recruit and train a group of third party consultants and resellers, especially if that’s a new business model for you.
Ideally, those professional services teams fade away over time as the ecosystem develops, but it makes sense for Jive to jump start it with its own team.
Jon Mell says:
Mar 12th, 2009
I think it’s slightly more subtle than vendors only trying to validate the sale. If a customer invests in Jive (or any other product) there is a mutual interest in making sure the solution works. If that also happens to validate the vendor’s sale it doesn’t automatically mean it’s wrong and not in the customer’s best interests.
There is another way of looking at it though, which is to do your consulting before you decide on a product vendor to ensure you end up with the right product in the first place. We’ve been blogging a fair bit recently about the different technical and commercial strengths of products such as Jive, Connections and Socialtext and things to consider when making a decision.
Thomas Lah says:
Mar 12th, 2009
Stewart:
I’ve spent the last fifteen years of my career studying this topic of “embedded professional services” within product companies. I can tell you there is no one size fits all answer for software companies in terms of how large PS should be within a software company. However, I can tell you that almost all software vendors require some level of PS capability to do things no independent consultanting firm will do, such as make sure product bugs and limitations do not prevent the customer from being successful. And to be clear, no embedded PS organization should position themselves as being product agnostic–no customer buys it. Even when EMC leased Accenture consultants to provide professional services, those Accenture consultants quickly realized they were no longer being viewed as independent IT consultants, but EMC biased consultants.
What fascinates me now is that the adoption of new software consumption models (SaaS, Open Source, Crowd Source) does not alleviate the need for software companies to get their PS strategy right. In fact, I would argue these new consumption models are increasing the importance of PS capabilities to secure customer adoption and renewal, for the very reason highlighted in your post:
“The reality for all (software) roll outs is that the software is a relatively minor component compared to the change management required to drive uptake and usage and to weave the software into the business fabric of day to day use.”
Tim Moore says:
Mar 12th, 2009
I feel kind of split about this. On the one hand, product companies that sell services end up with a perverse incentive to develop complex software that is hard to install and use, in order to maximize services revenue. On the other hand, I feel that often the best software is “opinionated” software that works hand-in-hand with a process model, and a lot of times customers can benefit from some coaching. An appropriate balance is key.
Gia Lyons says:
Mar 13th, 2009
The reason we only make Strategic Consulting available to Jive customers is because we are not in the business of selling services only. We are in the business of selling Jive licenses, and making our customers wildly successful with it. If you need software-agnostic services with no real specialty in any particular solution (in reality, you DO need to understand the software deeply enough to map it to real use cases effectively), call one of the big companies. I’m sure they’ll be happy to help.
Jon Mell says:
Mar 13th, 2009
“Call one of the big companies”
or one of the small ones…
Lawrence Liu (Telligent) says:
Apr 2nd, 2009
I agree with Thomas’s comment above that “there is no one size fits all answer.” Nevertheless, I believe that software vendors need to strike a careful balance between using PS to ensure that the software is successfully implemented and adopted vs. trying to make significant profit from PS. For a vendor that is truly focused on advancing its software, PS should have a supplementary role within the org rather than a dominant one. Moreover, the vendor should have key PS partners, who are focused on business solutions and have vertical industry expertise because the vendor’s own PS will be much more software centric. In many cases, the best approach is to have a 3 way joint effort between the software vendor’s PS, an industry focused PS firm, and the customer.
Jordan Frank says:
Apr 14th, 2009
One vendor’s perspective: At Traction Software we offer best practice based implementation consulting and development services. While much of the best practice experience readily applies to other platforms, much of what we do on an assignment seeks to help customers leverage the differentiating capabilities that led them to choose TeamPage over other platforms.
As a result, we are best off focusing on supporting our customer needs and, in the process, gathering insight into customer needs that will contribute to strategic decisions about our product roadmap. From this perspective, offering professional services is an essential part of business strategy.
More detail here: http://traction.tractionsoftware.com/traction/permalink/Blog1047