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The growing role of professional services, and more key takeaways from TSW

Once again, TSW did not disappoint. With a record number of attendees, the Technology Services World (TSW) conference—produced by the Technology Services Industry Association (TSIA)—proves that the professional services industry continues to thrive.

After three straight days at the busy Certinia booth, I soaked in quite a bit of industry insights. Here are some of my key takeaways.

Expanding role in the customer journey

Professional services has always played an important role in the customer journey. But today we’re seeing the role of services expanding its role long after the project’s “go-live.” As more and more organizations develop new kinds of business models and new ways of meeting customer needs in the new services economy, it has become apparent that professional services is now a key revenue driver and critical component of the customer journey.

Smaller projects, more bookings

While Professional Services is still delivering the “foundation project” we’re seeing those projects shrink in scope, but without actually lowering services bookings. In fact, TSIA shows PS bookings increased from 2016 to 2017. How is this happening? Clients and vendors are getting smarter about how we partner with each other, realizing that implementing large projects that may take a year or more is not the best option because the business inevitably changes.

New regulations, new product offerings, and new strategies will ultimately create major scope creep and unnecessary cost. Instead, TSIA shared that smaller initial implementations that enforce best practices, followed by an ongoing partnership with Professional Services, are on the upswing. This falls in line with the “land and expand” (LAER) model, which brings me to my next major takeaway.

Strong LAER adoption

A couple years ago, TSIA defined and recognized the Land, Adopt, Expand, Renew (LAER) model, and now we’re seeing it take hold in the market. LAER helps clients by letting them start by adopting best practices and then later enhance how they run their businesses. It’s also great for professional services teams as they become real client partners instead of just a transition between sales and support. As a result, LAER also gives the services team more responsibility for customer success. Whether through emerging managed services, health checks, customer roadmaps, and other billable activities, professional services helps businesses drive adoption, expansion, and renewals.

More predictability needed

With services making a bigger impact on client satisfaction and revenue, businesses have realized the importance of making that discipline more predictable. It’s no surprise that many visitors to the Certinia booth were curious about how analytics and artificial intelligence can drive predictability. In order to be predictable, however, we need reliable data that starts with the sale, not the services contract. It’s critical to have sales data and visibility into the pipeline in order to accurately forecast what services can deliver.

As it is now, most organizations will build a forecast that looks at the close date of a deal and then spread the revenue evenly over a number of months. But we can do better than that. A services pipeline forecast must mirror how it will actually be delivered and how you are actually going to realize it (e.g. is it a mix of fixed fee, T&M , and ratable, or some other combination?). Additionally, organizations need to effectively manage capacity, backlog, utilization, and billings to achieve predictability. Only a mature integrated PSA with analytics capability can deliver on this, and that’s part of what we announced and demonstrated this year.

Every year, TSW is an essential conference for anyone in the professional services discipline. I love seeing organizations looking to services as a way to strengthen customer relationships and generate more predictable revenue. See you next year!

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