Standard and Innovative Offerings for Hardware, Software and Professional Services

By Al Hahn

It is common to have standard contract offerings for hardware services, software support, and even some professional services. This article explains what is usually contained in such offerings and points the way for innovation. Hardware and software have some things in common and some that are very different. We'll start with what they have in common. They both most typically have three levels of offerings: call them basic, standard, and premium. These are descriptive names, not marketing names, so please don't use them for your actual offerings. Actual names should have a bit more pizzazz. From here on, we differentiate.

For hardware services, a basic offering typically has the longest response time to get someone onsite, anywhere from 24 to 72 hours. Coverage is provided within business hours (8 hours per day) during the week. Service provided outside of those days and hours is billed at either regular time and materials (T&M) rates, or at a discounted T&M rate. There usually aren't many other bells and whistles included. Standard service is the same hours of coverage, but a faster response time, typically anywhere from 4 hours 24 hours. There are often some other features for this level, but they are not standardized from one company to the next. Premium coverage is seven days a week, 24 hours a day. The response time is anywhere from 2 hours to 4 hours. Typically there are lots of additional features bundled in, often including some appetizer-sized professional services, such as an annual assessment. These "appetizers" are there to add value, but to also help sell additional professional services. As you can see, in all hardware offerings, the big differentiators are in the hours of coverage and the response time.

For software support offerings, we have the same three packages, but different features. For starters, the basic offering may be only electronic, providing web or email answers to questions and problems. There may be no direct phone support included. In that instance, the web is available 7 days, 24 hours. Email support is usually 10-12 hours a day during the week. If phone support is provided for basic support, it will be on weekdays, 10-12 hours a day, during the normal workday into the evening. Standard software support is always phone support during the week, 10-12 hours a day. The phone support may be a call-back (majority) or directly answered (minority), usually after several (2 or 3 to 20) minutes wait. Calls are answered sequentially by a group of level one agents. This level also provides web and email support. The premium software support customer typically has 7 days, 24 hours coverage and their call is answered immediately by a dedicated team of level two people who already know all of the customer's configuration data and their call history; help begins immediately. For most software, upgrades are typically provided to all contract customers. By upgrades, I mean whole number releases that may include new features and functionality. Maintenance releases between the whole number releases are also included. As is the case for hardware, other features may be bundled into these offerings, with more of them as you go up. Small professional services are often included in the premium offerings, as well.

Now, what about professional services? Some people may believe that they are always custom for each customer and project. That may be the case, but some system companies, such as Unisys and IBM, have had standardized professional services in their price lists for over 40 years. These are things that are at least 80% the same from one customer to the next. These companies have invested in developing standardized processes to deliver them, and often have proprietary tools for them. They include all kinds of assessments and certifications, such as security assessments (very popular these days), network certifications, storage assessments, etc. IBM, for many years, has sold "Installation Quickstart", standard installation with a little informal training at the end to get operators familiar with new systems so they can reboot, restore and do common system administration tasks.

Innovation Time

So where does the innovation come in? The best practice to add innovation to service offerings, is to start with customer research. To be honest, the essence of the aforementioned three levels of hardware and software services is pretty much required. The opportunity to competitively differentiate comes from understanding your customers better than the competition and helping them more. This kind of customer research is almost always qualitative. It comes from phone and face-to-face conversations regarding the challenges that the customer is facing. We typically call this "What is keeping the customer up at night?" You can't simply ask them that specific question; you must understand their environment and what is particularly challenging in today's situation. This is a dialogue. Sure, you can cover some of this in emails, but only when you already have a good personal relationship. Typically we do phone research or focus groups to discover the problems, and then brainstorm with the service marketers and delivery people about how we could help our customer facing those particular challenges. Then go back to the customers and test the ideas. Innovative features come from that customer research and brainstorming. That's where you can put some distance between your offerings and your competitors. Value is only there if customers perceive it and acknowledge it; otherwise, you are wasting your time. Innovation has to be customer-centric to be valued. Isn't it time to give it a try?