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Febmaty1993 Vol.IV,No.2 INPUT lEU-CSP Routeto: Research Bulletin APublicationfromINPUT'SCustomerServicesProgramme—Europe Developing an Open Support Culture Thisarticleanalysesanotheroftheimportant Exhibit1illustratestherelationshipofthese implicationsforsupportservicesstemming cultures,andassociatesthemwiththesystem fromthegrowthofopenandnetworked life-cycleconcept. systems. 1. TheProductCulture TheDifferentITCultures — Theproductcultureisprincipallyfoundinthe Creatinganopensupportcapability whichis equipmentandsoftwareproductvendors. The theseamlesssupplyofsupportservices organisations'energies arefocusedupon delivereddirectlytotheuserortohisendusers, developingproductsthatmeetandanticipate andembracingh—ardware,softwareand theneedsofthemarketplace,andthesales communications demandsabroadspreadof channelthatistrainedtointerprettheneedsof skills. Oneofthechallengesthatservice itscustomersandprospectsintermsofthe suppliersfaceindevelopingthiskindofopen productsavailable. Insuchcompanies,any supportisthedifficultyinbringingthevarious servicesofferedhavetypicallybeenstreamed culturestogetherthatthesedifferentskillsmay behindtheproducts,andpricedrelativeto bringwiththem. them. Intheireffortstomovemorefirmlyinto theservicesbusiness,manyequipmentvendors Supportserviceshavetraditionallybeen havecompiled'productcatalogues'fortheir segmentedintothoseassociatedwithhardware, portfoliosofdiscreteservices. software,systemsdevelopmentandoperations, withusersoftenemployingadifferent 2. TheProjectCulture supplyingcompanyforeachtypeofservice. Thesedifferentoriginshaveresultedindistinct Thiscultureislargelytheterrainofthe businesscultures,ofwhichINPUThas consultancies,softwarehousesandprofessional identifiedthreetypes: servicescompanies,whoarecalledinbychents toscopeortodesignanddevelopparticular • Theproductculture systemssolutions. Thecompany'sresources • Theprojectculture andinternalsystemsarethereforefocused • Thecontractculture aroundthenotionoftheproject,whichispriced ©1993byINPUT.Reproductionprohibited. RESEARCHBULLETIN Exhibit1 BusinessCulturesintheLifeCycle Implement ? accordingtotheresourcesneededtodeliverthe • Accurateimpactassessmentsofongoing requiredsolution. Theroleofthesaleschannel clientrequestsforchangestospecification istopromotethecompany'srelevant competenceandtoensurethatthecustomer's 3. TheContractCulture needsareproperlyunderstood. Thecontractcultureistypicalofthethird-party Stronganaloguesofthistypeofbusinesscanbe maintenancecompanies,theFMcompaniesand foundintheconstructionanddefence theircustomerservicedivisions(inthecaseof industries. Keytoprofitabilityarethe thelargersystemsvendors). Theservices following: providedaredefinedbythecontractunder whichtheyaresupplied,andmuchenergyis • Earlyassessment(i.e.duringthebidstage)of devotedtoensurethatthecontractboundaries majorriskareas areadheredtoandwellunderstood. Pricingis 2 ©1993bylNPLn".Reproductionprohibited. INPUT RESEARCHBULLETIN typicallybaseduponanassessmentofthe Predominantculturesalsovarybycountry resourcelevelsneededtomeetthetermsofthe market. Forexample,inthoseEuropean contract,oftenwithelaboratemechanismsfor marketssuchasSpainandGreecewhereIT measuringvariationaroundthepre-agreed servicesarerelativelypoorlydeveloped,a ' norm. Theconceptofthecontractasanaidto productculturetendstodominatesuppliersand servicedeliveryisoftensoldasheavilyasthe customersalike. servicesthemselves. Lookingatthedifferentskillsrequiredin Ofcourse,thisisanoversimplification,andall providingopensupport,itbecomesapparent tlieseculturescanberepresented whyculturecanbecomeabarriertoeffective simultaneouslyinasingleorganisation. For CO-working. Exhibit2correlatesdifferent example,newbusinesssalesteamsinall groupsofprofessionalswiththeirtypical companytypeswilltendtohaveaproject culturalbackground. cultureregardingeachnewbidasaprojectin itsownright. Accountmanagers,conversely, OpenSupportDemands tendtothecontractcultureregardingthe Co-Workmg relationshipwiththecustomerasanongoing concern. However,opensupportdemandsthatallthree cultureshavethefollowing: Accountmanagementisessentially . managementofthecustomer'sperceptionof • Productskillsthatarevitalinensuringthat theservicelevelsbeingreceived. thetechnicalcomplexityimplicitinopenand networkedsystemsremainstransparenttothe Keycharacteristicsofeachculturearethe user. following: • Projectskillsthatareneededtoensurethat • Product: hinovationthroughleadingedge systemsevolveinlinewithchanging R&D;withsellingthroughclassical customerneeds. marketingtechniques. * • Contractskillsthatunderpinthecustomer • Project: Projectmanagementandaccount relationshipandtheachievementofagreed managementarethekeystoprofitabilityand servicelevels. continuingrevenuesrespectively. Clearly,theglueholdingthedifferentservice • Contract: Resourceutilisationandniche elementstogethershouldbeastrongfocuson marketingaretheequivalentkeysuccess thecustomercoupledwithflexibleattitudes. factorsinthistypeofbusinessculture. Howcompanieschosetostructuretheir resourceteamsinprovidingopensupportwill DifferentCulturescanClash alsohaveastrongbearingonwhethercultural differencesbecomeastrengthoraweakness. ManyofthedifficultiesexperiencedbyIT companiesinachievingasmoothinterface betweentheirsalesanddehverychannelscan beattributedtoculturaldifferences. 1993byINPLTT.Reproductionprohibited. 3 INPUT- RESEARCHBULLETIN Exhibit2 ProfessionalsandtheirNaturalCultures ResourceGroups TypicalCulture HardwareEngineers ProductorContract SoftwareSupport Product HelpDesk Contract ProductDesigners Product SystemsDesigners Project SoftwareTeams Project NetworkEngineers ProductorContract SalesTeams Project AccountManagers Contract OperationsManagers Contract Source: INPUT HOpoewnDSeulipvpeorrytStructureImpacts eaapcphr.eciTahtiisonwiolfltbheepoavretriaclullacrhlayramcaterrkiesdticifstohfe resourcegroupsareprofitcentresorindividual Takethecaseofatotalsiteservicecontract If companies. resourcesbelowthehelpdesklevelremain streamedbyfunction,withtheoverallsupport Ifontheotherhand,resourcesarebrought contractonlyactingasamechanismforgiving togetherinthecontextofeitherindividual accesstoandchargingforthediscreteservice contractsortoservicegroupsofsimilar elements,thenseamlesssupportisunlikelyto contracts,thentheprospectsforsmooth beachieved. integrationofactivitiesareimproved. For example,agroupofsmallsoftwarecompanies Customerfocusmaybelackingandindividual eachsupplyingUNIXapplicationstoIBM, contractswillbejustoneofmanyservicedby worktogethertoensurethatenhancementof theresourcegroups,withperhapslittle onecompany'sproductdoesnotadversely e1993byINPUT.Reprcxiuctionprohibited. INPUT RESEARCHBULLETIN impactanother's. Fromthecustomer's managementandmarketingteamstowork perspective,thesesoftwareproducts,although togetherfizzleoutassoonasresponsibilityfor independentlysourced,canbeconfidently actionpassestotheoperationallevel. Yetthis integratedattheuserlevel. companyownsmany—oftheresourcesneededto OpenSupport—Packagedor plarcokviodfewoilplenthsatupipsoirnthibi^ittiinsgthaenycommopvaenyt'oswaorwdns Customised? accompUshingthis. Thedegreeofserviceintegrationrequired Thecompaniesthatrecogniseandaddressthe variesbycustomertype: culturalissuesimplicitinopenandintegrated support,thatensurethatalltheiractivitiesare • Largecorporateorganisationspursuingan focusedonthecustomerandthattheirdelivery outsourcingphilosophywillseektominimise chaimelsdonotexacerbateculturaldifferences, thenumberofsuppliersandmaximise arethosethathavethebestchanceofwinning servicemanagement. theservicesbattle. • Smalltomedium-sizedcompanieswilllook ProfessionalServicesProfileof forpackagedsolutionsandpackagedservices BullintheU.K. thatareheavilydependentuponremote support. BullInformationSystemsLimited(Bull)isthe U.K.subsidiaryofGroupeBull,themajor Therefore,thesemarketsarelikelytobefor Europeancomputermanufacturerand highlycustomisedand'shrink-wrapped'open- informationprocessingequipmentandservices supportservices. Customisedcontractswill supplierlargelyownedbytheFrench involveelementsofthelargeprojectculture. government. Afterveryheavylossesin1990, Package—dserviceshavetheflavoursoftwo GroupeBulldevelopedaTransformationPlan cultures aretheyproductsorstandard designedtorestoreittoprofitability,which contracts? involvesmassiverestructuringandaccelerated productdevelopment. Theimpactofthisplan TacklingCulturalIssuesIsVital hasseenstaffnumbersintheU.K.fallfrom 4,000to1,800,with600joblossescoming Itiseasytounderestimatetheeffectthatfailing fromtheclosureofBull'sU.K.manufacturing totackleculttiraldifferencescanhave. One plant. well-knownITservicescompanyintheU.K. hastwodivisions: oneprovidingsystems Positioning designanddevelopmentservices,andtheother providingthird-partymaintenance. Despitea Bullispositionedasafullrangeequipmentand markeddeclineinthecompany'sperformance servicessupplier. TheTransformationPlan inrecentyears,ithasnotbeensuccessfulin focuseduponthreestrategicdirections:Bull's bringingthetwodivisionstogether. Each long-standingcommitmenttodistributedand continuestomaintainseparatesaleschannels, open-informationsystems(particularlyinthe quitedistinctcustomerbases,andtodevelop desktopandmidrangeareas);thedevelopment newserviceproductsinsplendidisolationfrom ofsolutionscombininghardware,softwareand eachother. Attemptsbytherespective services;andtheestablishmentofcooperative ©1993byINPUT.Reproductionprohibited. 5 INPUT RESEARCHBULLETINl^^^^^^^^^^^^^^^^^H^HI^^^^^^H agreementswithothercompanies. Amajor WhenBullcannotsupplyskillsfromwithinits initiativeisthecreationofSystemsIntegration ownresourcepools,itwillprocuretheseforthe BusinessUnits(SIUs)inprincipalmarkets customeronanagencybasis. (includingtheU.K.). Thesewillprovidea focusforthecompany'snetworkandtechnical Bull'sserviceofferingsareprincipallytargeted systemsintegrationskills. TheU.K.SIUis atitsowncustomerandprospectbase,buteach alreadygeneratingrevenuesof$50million. lineofbusinessisfreetopursueother opportunities,providedthattheseareprofitable Historically,professionalservicesactivityinthe anddonotdefractfromcoreactivities. U.K.hasbeenfragmentedacrossproductlines. Bullhasnowadoptedathree-waymatrixin FutureDirections whichmarket-facingsalesandmarketingunits warheicshupbpuoyrtreedsbouyrcseersvficreomdefluinvcetriyonsatlre(aamnsd,P& uBunldlerinttheendthsrteoeddeevlievleorpyistsfrseearmvsicmeeancttiivointieeds L)resourcegroups. Exhibit3illustratesthe above:systemsintegration,systemsoperations principle. (facilitiesmanagement)anddesktopservices. Itssystemsoperations(SO)capabilitythatwill Itistheresponsibilityoftheindividualaccount besfrengthenedshortlybytheannouncementof managertoaccessandmanageresourcesonthe apartnershipwithanexistingSOsupplier. Bull customer'sbehalf. isalsoanalysingthegapsinitsservice offeringsanddevelopingplanstofillthese. BullisusingaUfe-cyclemodeltopositionits services"upsfream"and"downsfream"in Initsproprietaryenvironments.Bullis systemsinstallation,asshowninExhibit4 packagingitsservicesintoportfoliosof ' 1^ ^ Exhibit3 ProfessionalServicesMatrix » t' SalesandMarketing ServiceDelivery Resource BusinessUnits Streams Units PublicSector SystemsIntegration Consulting PrivateSector SystemsOperations SoftwareServices OpenSystems DesktopServices Maintenance PC's Products Cabling Source: INPUT '6 ' ©1993byINPLTT.Reproductionprohibited. - INPUT J RESEARCHBULLETIN Exhibit4 ServicesModel UpstreamServices DownstreamServices BusinessandITConsultancy Implementation PlanningandDesign SupportandMaintenance Development Operations ——— 1^^^^— ^^"g—HWIIIIIIIIIIIIIIPMW— Source: INPUT consultancy,trainingandsupportunderbrand ThisstrategyisaimedtotakeBullintothe namessuchasGoldServiceandPlatinum positioninwhichitisperceivedasthenatural Service. Thesepackagesallowcustomersto providerofvalue-addedservicestoitsown drawfreelyupontheserviceuptoapreviously base. Forexample,onlyatinyproportionof agreedceiling, hiitsopenenvhonments,by maintenanceofBullequipmentiscarriedout contrast,Bullisofferingitsservicesonafully bythirdparties,andtheclosertothemachine unbundledbasis. Thisisbecausethedemandis theservicestobeprovided,thestrongerBull's muchmoreakintothatinthesmallsystems positionbecomes. marketinwhichservicesareboughtonan'as andwhen'orad-hocbasis. AnadditionalstrengthisBull'swillingnessto developandretrainitsownresourcestomatch Bullbelievesthatnetworkedenvironments shiftsincustomerdemand. presentthebestopportunityforittodevelopits serviceactivitiesoutsideitsowncustomerand Bycontrast.Bullfeelsexposedinareassuchas prospectbase. Forexample,intheUnited SOinwhichusershavenottraditionallysought StatestheSystemsIntegrationUnitistrading supportfromtheequipmentsupplier. With independentlyunderaseparatename. abouthalfitsU.K.businessinthepublicsector. BullisconsciousthatSOmustb—etackled StrengthsandWeaknesses proactivelyandnotdefensively Whencecomes thepartnershiparrangementshortlytobe Bullseesasitskeystrengths: announced. • Thequalityofitsrelationshipwithits Bullacknowledgesthatthe"upstream"partof customers itsservicesmodel,andparticularlybusiness levelconsulting,willalsoproveharderto • Itsrecognisedtechnicalskillsinthekey crack. technologies,forwhichitisknown ©1993byINPUT.Reproductionprohibited. 7 INPUT RESEARCHBULLETIN Pricing Competitive Positioning Servicesaretypicallyfixedonpriceperservice Competitionintheprofessionalservicesarea moduleorfixedpriceperassignmentbasis, comesprincipallyfromservicessuppliersand withservicesbecomingmorefirmlypricedthe fromthein-houseactivitiesofBull's closertothemachinetheyget. Discountsare customers'ownsystemsteams. Competition availableonavolumebasisorthroughservice fromotherhardwarevendorsislesscommon packagessuchastheGoldandPlatinum becausemostareconcentratingtheirservices schemespreviouslydiscussed. Premiumrates activitiesupontheirowncustomerbase. In applytospecialisedservices. areassuchasmaintenance,Bullexperiences somecompetitionfromtheindependent Organisation maintenancecompaniesinnon-proprietary areasandfromitsownformeremployees. Bull Exhibit3(page6)showstheoverallmatrix feelsmostexposedtocompetitioninareassuch structureoftheprofessionalservicesarm. Each aseducationandtraininginwhichbarriersto oftheresource-basedlinesofbusinesshasits entryarelowandalternativesuppliersare ownsalesandmarketingbudgetandcanbuy plentiful. supportfromtheservicesmarketingteam. Servicessalesarepresentlyconductedthrough Competitivenessisbasedupondifferentiation thenormalvertically-orientedsaleschannels, byvalueandthroughfocusinguponspecific althoughBullisconsideringdedicatedservice technologyareassuchasnetworkingandopen salesactivityasservicesrevenuevolumes systems. Bullisalsopreparedtoshowmuch buildup. greaterflexibilityinrespondingtocustomer demandsandcompetitivepressures. Customerserviceengineersarealsotaskedwith identifyingservicesalesopportunitiesasaway Bull'sViewontheMarketplace ' ofsupportingtheirowncostbaseandwith deliveringservicessuchasequipment Bullbelievesthatitisvitaltobeinvolvedinthe installationandbasictraining. provisionofnetworkedsystemsandnetworking servicesbecausecontrolofthenetworkgives Professionalservicesrevenuesaremonitoredat muchgreaterinsightintothewholeinstallation. thelevelofthelineofbusiness. Bullanticipatesgreatercompetitionfrom telecomsuppliersinfuture. Therefore,Bull Resourcing ^ expectstodeveloprealdifferentiationinthe networkedsystemsareathroughthe Giventhesharpreductioninpersonnelthathas developmentofremoteservicesdelivered takenplace,recruitmentisusedonlyforthe throughthenetworksuchashelpdesks, graduateentryprogrammeandasameanto disasterrecovery,subscriptionservicesand acquirekeyskills. Theprincipalfocuswithin evenremoteSO. theCustomerServicesDivisionisonretraining stafftomeetchangedservicedemands. OpenSystemsofcoursenowunderlieBull's wholemarketethos,anditishopedthatthis Somesub-contractingtakesplace,and bannerwillprovidetheplatformthroughwhich parmeringispractisedonaprojectbyproject Bull'sserviceofferingscanbetransferredtothe basisaswellasonmajornewinitiativessuchas broadermarketplace. Outsourcing. Twosmallacquisitionshavebeen madeinrecentmonths. © ©1993byINPUT.Reproductionprohibited. - INPUT INPUT'SAssessment CompanyInformation Bullhasexperiencedevengreaterrestructuring BULLInformationSystemsLimitedhasits thanmanyofitscompetitors,andhasachieved headquartersatthefollowingaddress: commensuratelyhigherproductivitygains. The decisiontocreateprofitandlossbasedresource U.K.Headquarters upnairttsicaulnadrltyoiunsethuendbeusnkdtloepdapnrdicUinNgImXecahraeansi,sms, GCroemaptuWteesrtHRoouasde 1: •I''lIij^'-^ meansthattheoldcross-subsidiesare Brentford disappearingandamorecompetitiveservices MiddlesexTW89DH = -:^^'f^ '' activityisemerging. UnitedKingdom ' Byseparatingitsservicedeliverychannels Tel: 44815689191 fberommoorwenfelresxhibilpeoifntrheespreosnoduirncgest,oBtuhlelviasryaiblnegto Fax: -^44815681581 . ' demandsofitscustomers,andthroughthe ProfessionalServicesProvided ^ SystemsIntegrationUnits,Bullisaddressing thequestionofhowtobringculturallydistinct ThefollowingisalistoftheProfessional ' hardwareandsoftwaresupportactivities ServicesBullprovides: together. • BusinessandITConsultancy ThequestiontowhichBullhasyettoansweris whetheritcanuseitsfocusonnetworkedand - BusinessandITStrategyReviews opensystemstomoveoutofthenicheposition - EffectivenessReviews ionfwthhiiscwhoiutlhdasbetetnhdeeldoctaoloacncdupcye.ntAranlexample -- RSeeqmuiinraermseanntdsWDoefriknsihtoiopns • , governmentapplicationareas,whichhave movedintothebroadergeneralsystems • PlanningandDesign marketplaceandthenintoservice—s. The conflict—thatINPUTdetectshere asisoften - BidandProjectManagement thecase isbetweenbroadeningasasystems (butproduct-based)companyanddiversifying - StrategicUseofTechnology asaservicescompany. Oneofthereasonswhy - RequirementsAnalysis thisgroupofsuppliersiscurrentlyinsuch terriblefinancialstraitsisthatthisdilemmahas - Product/Application/Database/Network notyetbeenresolvedformanyofthecases. Design TimeisrunningoutforvendorslikeBull. They - ITTProduction mustdecidewhattypeofvendorthattheyare nowandinthelongterm;otherwise,themarket - ProductEvaluation/Selection willgoonbeingconfusedandleadtothe - ImplementationProgrammeDirection detrimentofBull'sfortunes. ©1993byINPUT.Reproductionprohibited. 9 INPUT RESEARCHBULLETIN • Development ; • Alldocumentationhasthecapabilityofbeing madeavailableon-line,andthisisclaimedto - ProductSpecification beafirstintheX-terminalmarket. - SolutionScoping - Product/System/ApplicationDevelopment • DECnetsupport,whichisprovidedfreeof - Prototyping chargeaspartofthisrelease. -- TSeyssttienmgs&InDtoecgruamteinotnati,on INPUTcomment: DigitalistargetingtheX- terminalsectoraspartofitsdriveintothe • Implementation networkedintelligentbusinessmarket. Oneof theaimsoftheVXTfamilyistoeasethe - MigrationServices housekeepingburdenontheuserof: - Pre-shipmentTesting - InstallationandConfiguration • Systeminstallation - SiteStandardsandProcedures - Training • Termmalcustomisation • -. • SupportandMaintenance • First-linemaintenanceoflargegroupsofX terminals - HardwareMaintenance - ASpopfltiwcaarteioSnuspport—Operatingand Twhoirskiwnilglebneviarnoinnmcernetasoifnginnteeleldigienntthbeuiflldeixnigbsl.e - "HowtoUse"Services OlivettiNotYetAbletoReport Profits • Operation WhenOlivettidecidedtoascribeallthelosses - SystemsManagement associatedwithredundanciesandclosuresto - SystemsOperation the1991accounts,itwashopingtopreparethe - PerformanceMonito—ringandOptimisation wayforareturntoprofitabilityin1993by - OperationalReview ITandBusiness breakingevenin1992. However,thegroupis beingwarnedoflargeoperatinglossesin1992 DigitalAddsSoftwareFeaturesto duetothefallingpriceofthelow-end FitasmMiuliyt—itwhiendVoXwTX2-0Te0r0minal p'rciocmemsohdaivtey'faillteenmsbyinaibtosuptro4d0u%ctppeorrtafnolniuo.miPnC eachofthelasttwoyears. AnewreleaseofsoftwarefortheVXT2000 hasbeendirectedatimprovingtheeaseofuse Softwareandservicesnowaccountforabout ofthisX-terminalfamilyinitsnatural one-thirdofOlivetti'srevenues,andsomelarge environmentoftheenterprisenetwork. New dealshavebeenreportedinitshardware featuresincludethefollowing: maintenanceandservicingarmin1992,for example: • Printqueuecapabilitythatallowsotherusers onthenetworktoaccessaprinterattachedto • Therenewalofitscontracttoservicethe aVXT2000. equipmentinthebranchnetworkofBarclay's BankintheU.K. ©1993byINPUT.Reproductionprohibiled. - INPUT