new service development process
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New Service Development Process. A Report to GreatWhite Technology Group New York, NY October 23, 2005. GWTG Background. US$100M IT services business Core Competency – Application Integration Financial Management Regulatory Compliance Challenges Low margins Commoditization - PowerPoint PPT PresentationTRANSCRIPT
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New Service Development ProcessNew Service Development Process
A Report to GreatWhite Technology GroupNew York, NY
October 23, 2005
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GWTG BackgroundGWTG Background
US$100M IT services business Core Competency – Application Integration
Financial Management Regulatory Compliance
Challenges Low margins Commoditization Independent contractors Offshore threat
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RecommendationsRecommendations
Move up the value pyramid Develop new offerings in the areas of:
architecture and design services for software strategic advisory in compliance areas (SOX, Basel II, etc.)
StrategyStrategy
ImplementationImplementation
Architecture & Design Architecture & Design
StrategicStrategic
TacticalTactical
OperationsOperations
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The Development ProcessThe Development Process
First step – Create the Development Process Why a Development Process?
Higher probability of success Reduces risks of “bad bets” Brings discipline into the process Better teamwork Consistency
Just having a process is not enough High correlation between quality of process and
profitability*
*Cooper, R.G., “Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition” (New York: Basic Books, 2001)
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The Development Process – A High Level ViewThe Development Process – A High Level View
Stage 0
The Idea Factory
Initial Scope Business Case
Service Development
Market Test & Validation
11 22 33
4455
Stage 1
Stage 3
Stage 2
Launch
Stage 5
Review
Stage 4
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Critical Success FactorsCritical Success Factors
Differentiation & superiority Market orientation in the process Define offering in maximum detail Marketing plan is part of the process – not the
end Create the right org structure
Participation by all stakeholders throughout the process
Executive sponsorship throughout the process Stay within core competencies Stick to the process – no shortcuts
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Cross-Functional Development TeamCross-Functional Development Team
CEO – Executive Sponsor Marketing – Program Manager Delivery Management/PMO Sales Channel Partner Management Recruiting/HR
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Stage 0 – The Idea FactoryStage 0 – The Idea Factory
Sources Top down
• From Marketing & Senior Executives Bottom up
• From consultants and sales in the field Client projects (replicate) Informal client discussions Partners Industry events Professional associations Competitive analysis
Marketing is the idea collection point
“Nothing is more dangerous than an idea when it is the only one you have”– Emile Chartier, Propos sur la religion, 1938
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Gate 1Gate 1
In our competency set? Technology Industry Business process
Active and growing market? Technology is legacy or leading-edge? Many or few competitors? Approve resources for initial scoping
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Stage 1 – Initial ScopeStage 1 – Initial Scope
Talk to some clients informally Determine ability to deliver with existing
skills/resources Determine current market rate for similar
services Growing vs. shrinking market Determine client buying habits in this space
Software vendors vs. service providers Look at competitor’s marketing messages SWOT analysis
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Gate 2Gate 2
Review by sales management Sufficient market rates Technology is feasible Potential IP issues (esp. if replicating a
client project) Approve resources for business case Primary gate for portfolio management
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Stage 2 – Business CaseStage 2 – Business Case
Target market Industry Size Geography
In-depth market research Industry analysts Client surveys Partner surveys Growth projections
Value proposition Development plan &
budget
Delivery model Full-time staff /
subcontractors Skill development plan
Engagement model Resources – type &
number Rates
Distribution Strategy Partners
Choose partner(s) Create joint benefit
proposition
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Gate 3Gate 3
Unique in Entire market Geography Industry
Minimum projected project GM% Approve development plan & budget Is business case thorough? Approve resources for development
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Stage 3 – Service DevelopmentStage 3 – Service Development
Build delivery capability Technical / business training Recruiting
Create delivery methodology Phases and deliverables
Create marcom plan Create sales forecast Create sales comp plan Setup partner rules of engagement Sales training – internal & partner Create customer service plan
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Gate 4Gate 4
What’s our ability to execute? Technical delivery Work with partner
Is it easy to buy (not necessarily easy to sell*)? Review minimum projected project GM% Approve resources for testing
*Moore, G., “Crossing the Chasm: Marketing and Selling High Tech Products to Mainstream Customers” (New York: HarperCollins, 2002)
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Stage 4 – Market Test & ValidationStage 4 – Market Test & Validation
Pilot at “friendly” client Offer reduced rate for test clients Execute with partner at their existing
clients
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Gate 5Gate 5
Evaluate ability to execute Technical Project Management
Analyze test project metrics Duration Resourcing Quality of deliverable GM% Client & partner satisfaction
Was testing thorough? Approve resources for launch
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Stage 5 – LaunchStage 5 – Launch
Marketing / Demand Generation PR & media Events Partner co-marketing
Lead generation Relationship mining Events
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ReviewReview
Total revenue against plan GM% against plan Client satisfaction Partner satisfaction Adjust revenue & resource forecast
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Process Rollout Plan – Next StepsProcess Rollout Plan – Next Steps
Gain support of senior management Identify current practices Created detailed process design with input from cross-
functional teams Management approval Evangelize – need to build mindshare up and down the
organization Create support materials – guides, etc. IT support for collaboration, project tracking, financial
modeling, etc. Training Migrate current projects to the new process
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Roadblocks to SuccessRoadblocks to Success
Ignorance – “What should we do?” Lack of skills – “How do we do it?” Underestimate the tasks in the process Faulty process “We already know the answers” No leadership In a rush – cut corners Too many projects, not enough resources
Cooper, R.G., “The Invisible Success Factors in Product Innovation,” Journal of Product Innovation Management, 16, 2, April 1999
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Managing the Services PortfolioManaging the Services Portfolio
Goals Maximize value Balance Strategic alignment Allocate scarce resources
Score and rank projects according to: Strategic fit Market attractiveness Feasibility etc.
Compare scores across projects with the goals in mind Implement at Gate 2 (after the initial scoping)
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Thank You!Thank You!