A Blueprint For Services Business

Champions

Conference (CCC) 2002 was successful in laying down a blueprint for the services

business. The conference came out with a step-by-step approach that partners

could adopt to enter into services.

First and foremost partners have to identify their core competencies. This is

a task that partners have to accomplish on their own since vendors would not

know what the strengths of partners are.

Once the core competencies are identified, the next step is to acquire the

necessary skill-sets to execute these competencies. Hence, the need for

investing in people becomes very obvious. While capital investment is important

for any business, investment on people is critical for the success of services

business.

Once people with right skill-sets are in place, it is time to build a strong

brand. Usually, brands are associated with products. But, just like a strong

product brand moves fast in the market, a services brand too can be positioned

to bring in customers on its own merit.

A brand can be successfully built only when those in services business remain

close to customers. A customer-first approach has to be vigorously pursued to

understand the market needs and cater to them in a customer-friendly approach.

What are some of the opportunities that exist today in services business?

Starting from the age-old AMCs to the latest facilities management, systems and

network integration, warranty support and upgrades, 7 days x 24 hour call center

support, software services, et al, provide avenues for partners to get into

services.

All this may look hunky-dory and yet partners may still find it difficult to

get into services. So where is the problem? In the mindset really! Those who are

in the trading for a long time and have been facing the onslaught of shrinking

margins, need a fundamental change in their mindset, that services business

means providing value addition, unlike box pushing where a product is sold and

forgotten.

Of course, products created the very need for service in the first place. To

go back into the history a little, when margins in products were as high as

15-20 percent or even more a few years ago, resellers bundled service with

products because the generous margins covered the cost of service. But when

margins began shrinking and services could not be bundled any more, AMCs made

their foray and a new business segment began flourishing.

But where is the guarantee that margins in services will not shrink, the way

they have in products? Margins will indeed shrink as services too gets

commoditized. But it is a long way before this really happens. So, if you think

this is the right time to get into services, don’t hesitate. You already have a blueprint in hand!