Infrastructure services providers must change. Today’s business models won’t work tomorrow. The transition will be hard. Some will fail. Providers must deliver demonstrable value, prevent operational and business pain and wage a war on waste to survive. If customer’s see no value; there is no value.
Figure 1. The Infrastructure Services Factory of the Future
As labor arbitrage benefits reduce, infrastructure service provider survival depends on their ability to leverage automation, analytics and standardization to overcome price pressures, hyper-competition and legacy account migration issues whilst actively promoting their value and reducing customer pain without the sufficient investment funds or the necessary timeline for change. It is a massive challenge. One that some providers may fail to meet.
Prevention pays. Customer’s know it. Provider’s are learning (but perhaps not quickly enough). Keeping the lights on is “easy”. Ensuring they always come on when you flick the switch (as required by dynamic flexible cloud infrastructures) is much harder. But prevention is not just a technical issue. Operational and business pain minimization is as critical and valuable to customers as technical issue avoidance. However, prevention on its own is still not enough.
Customers want and expect more. Regular demonstrations of tangible and visible service value are necessary to attract and keep customers (“Satisfaction” and “loyalty” are metrics of yesterday). Continuous improvement is table stakes. Giving customers more bang for their pre-existing technology buck is key. “More for less” is a cliché. But clichés work (at least in the minds of customers). Providers must wage a “War on Waste” to wow customers and differentiate themselves and their offerings. Traditional service line silo boundaries are changing. Providers must rationalize their portfolios and enable the delivery of highly configurable granular standardized services to meet the specific needs of individual customers to succeed.
“Cloud” is no longer an “if” but a “when” in the minds of customers and providers alike. Analytics (and the information management processes and big data that underpins it) will be the foundation upon which prevention-based services are built. Social interplay and personal recommendations will drive new business acquisition and customer retention. Referencability is a critical success factor. The true power of the crowd remains untapped. Provider’s that understand and learn to harness the power of the collective effectively will have real advantage.
The above is an extract from “Agenda Overview for Infrastructure Services, 2013” which can be found here. This is the high level story that the Infrastructure Services agenda will be delivering against for the next 12 months. The note goes on to explore the challenges facing providers as they transition from their current business models to flexible efficient next generation service delivery factories. It also outlines, defines and gives examples of research that we will be delivering against the following core topics and key issues:
- Defining the optimum service portfolio strategy:
- How must provider service portfolios and roadmaps evolve in light of market trends, buyer behaviors and corporate objectives?
- Where should providers focus investments to gain market share, improve customer retention and protect margins?
- Improving provider competitiveness:
- Which competitors are most threatening and how can providers position themselves to compete?
- How can providers differentiate their offerings and demonstrate their value most effectively?
- Delivering service excellence and customer value:
- What are the key attributes and characteristics of best-in-class services and the organizations that deliver them?
- How can technology adoption and/or best practices implementation help improve service value and quality while reducing delivery costs?
“Wow! Amazing! That all sounds… err… fab-u-lous… wonderful even perhaps… but I’m a little confused by the cool Escher-esque graphic… Care to expand a little?”
The “Infrastructure Services Factory of the Future” is an aspirational goal for service providers to aim for. It is a symbol of the agile, scalable, flexible, efficient, value-driven service delivery engine that every provider will need to survive and thrive.
The perpetual motion of the waterfall and gravity defying aqua-duct represents the annuity revenue stream that is the life blood of the service provider. Whilst there is some churn (as the falling torrent drives the water wheel) the objective is obviously 100% renewal.
Customer requirements and needs (which arrive periodically are typically loaded / man-handled through a people intensive recording and service initiation processes that may or may not leverage labor arbitrage) are processed by the factory to consistently deliver business focused outcomes. Yes, the man shoveling the inbound stuff is deliberate and reflects the historic “Your mess for less” mindset that still persists in some quarters.
As customer work packages flow through the system they are acted upon by the forces of standardization, analytics and automation. These are the new core competencies of successful service providers. Governance processes underpin and assure service delivery levels. Prevention and value promotion will be critical success factors.
Prevention doesn’t happen on its own. The diligent application of risk management processes are essential to guarantee delivery and service quality. An understanding of potential hazards, their impact and severity, and the likelihood that they may manifest into technical, operational or business impacting incidents is key. Assessing the systemic residual risk based upon a balanced view of known and accepted levels of waste and the controls needed to maintain the system is essential. Balancing risk and cost will be a mandatory skill for all successful providers. Within the graphic it can be seen that the risk management process acts as a governor (or regulator) for the business’s transaction flow just as mechanical regulators performed the same function in early steam locomotives and heavy machinery.
Diligent and competent delivery is for nothing if your customers are unaware of the value they derive from your services. Providers must ensure that the relevant constituencies within their customer organizations are routinely informed of the value delivered. The value bull horns are there to broadcast the context based constituency specific messages and content streams that reinforce the customer experience.
Lastly, the factory sits on a cloud. This is not to say that all services will be cloud based. But it is likely that every service provider will leverage cloud like capabilities to deliver their services irrespective of what they actually end up selling on to their customers…
So that’s it then. Hopefully you see where we are coming from and what we are trying to convey with the graphic. Please please please take a moment to click on the image above and take a quick look at how it all fits together. How does your organization compare? Are you there yet or are you still a work in progress? Do you have all of the bases covered? Where are you strong? More importantly, where are you weak? Which pieces are you doing yourself and which elements are you subcontracting in? We believe that it will act as a catalyst for many interesting discussions – at least that is our hope
Once again, the full version of the “Agenda Overview for Infrastructure Services, 2013” can be found here.
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