SERVICE BUSINESS: HOW ATTRACTIVE IS IT?

Partners feel that vendors restrict themselves to product/technology evangelization and don’t do enough to educate users that service comes at a cost. Vendors, however believe that the ultimate responsibility of changing user mindset about service lies with partners and that they adequately help partners accomplish this task.

Customer mindset prohibits growth of service business...

While everyone, including vendors, are bullish about prospects in the service business, customer mindset is discouraging its growth. The user continues to expect service to be bundled free with the product he buys. This is a fact that even vendors chose to ignore. With margins getting dismal in products, such an attitude from customers, and indifference from vendors is not helping the service business grow as expected.

Vendors need to educate customers...



When it comes to their products and technology, vendors do everything under the sun to lure customers. Whether it is user meets or technology seminars, they restrict their discussions to products only. 

They don’t take that extra effort to make users understand there is a service aspect as well to every product sale. And if during the life-cycle of the product, users want a complete post-sales service assurance, they have to either purchase the SLAs (service level agreements) or pay partners for providing the service to them. 

Service too is getting commoditized...



We are witnessing an increasing trend of vendors trying to commoditize service as well, where they expect partners to sell service as packs, with small margins. Now if services too go the product way, the future looks nothing but bleak. 

Vendors need to ensure that all service opportunities for their products are routed only to appropriately trained and certified partners. Otherwise, how are we ever going to recover the investments that we have made towards imparting technical skills to our staff?

Prevent services from unhealthy competition...



There’s so much unhealthy competition in product-selling that it’s harming everyone in the business. Right now, we hardly see vendors doing much to ensure that the same doesn’t become true for service business too. Even if a partner decides to offer services at unrealistic prices just to steal away the product deal from competition, the principal acts as a mute witness. True, vendors can’t regulate pricing but atleast they can use their authority to prevent partners from resorting to unethical means.

Devise a service roadmap as well...



Like product roadmaps, vendors should be devising some kind of service roadmap too, so that we know what are the few competency areas on which we can focus in the near future. This is something, that we don’t see many vendors actively offering. Besides explaining the product roadmap, vendors should also outline the various service opportunities that they believe will evolve in due course of time.

Post-sales service is not a commoditi-zable business. By offering intensive training and specialization, we ensure that our partners are able to offer customized solutions.

Ultimate responsibility of changing mindset lies with partners...

As a vendor organization, we have never shied away from putting efforts towards influencing user mindset on service. But partners must understand that they have an equal responsibility as far as this task is concerned. Ultimately they are the ones closest to end-users and they can easily leverage their relationships to underline the importance of paying for service.

Highlight the value proposition...



User meets and technology seminars are primarily meant to talk about product/technology. It is not that we don’t talk about service offerings and costs associated with it. But it is the prime responsibility of a partner to approach a client and explain the value proposition that he has to offer. We can’t be doing that for him. Further, we do tell customers which partners he should get his service-related issues resolved from and inform him of the associated costs as well.

Service by nature cannot be commoditized...



We believe that post-sales service is not a commoditizable business. By offering intensive training and specialization we ensure that our partners are able to deliver solutions that are designed to fit into the requirements of every customer. For instance, Cisco´s USP in India - our service and support offering - can be tuned to customers requirements, from four-hour turnaround times to next-business day shipments. Every partner can identify the unique service opportunity that he wishes to address and use that niche to his advantage.

Competent partners can demand premium...



In a rapidly moving world of internetworking, customers are constantly adopting new-world technologies and are willing to pay a premium to ensure optimal uptime of these networks. Hence, partner organizations with greater competence, streamlined delivery modes and people skills can easily demand a premium from their clients. 

We believe that the implementation of intelligent network solutions is only going to drive higher margins into servicing and maintaining these networks - rather than the other way round. 

Product specialization creates service roadmap...



Today customers are looking at deploying not just LAN/WAN solutions but even high-end security solutions like wireless.

They are even looking to drive voice over their enterprise closed user group. This has created the opportunity for our partners to garner service revenues, to ensure optimal maintenance of these networks. Hence identifying a specialization in a specific product/technology area gives partner enough of a direction as to which way his service business too will evolve.