Leveraging a Solutions Approach to Guarantee Product Impact June 19, 2009

1. Leveraging a Solutions Approach to Guarantee Product Impact June 19, 2009 Presented at: Art & Science of Services Conference Bentley College Presented by: Stephen Hurley Managing Director Solutions Insights, Inc.

2. Solutions What is it??!!

4. Even Dilbert is talking about solutions!

5. Even Dilbert is talking about solutions!

6. Even Dilbert is talking about solutions!

7. These are more typical of the solutions that exist in the B2B world.

8. Much of the breakthrough research on technology-based solutions has been developed by ITSMA... ITSMA provides research and consulting insights on how to sell and market services to the world’s leading technology companies.

9. Solutions are real—at least in the eyes of the technology vendors. Q. How important is the solutions business to your company? % of Respondents (N=41) Extremely Important Mean Rating = 4.6 Not at All Important Source: ITSMA

10. So…what is a solution? ITSMA’s Solutions Council came together and agreed upon the following definition. A solution is a combination of products and/or services with intellectual capital, focused on a particular customer problem, which drives measurable business value. DEFINITION Source: ITSMA Solutions Council 2006 Source: ITSMA

11. A Solution is… Technology Process Resources Here’s another way to look at it… The Solution Understanding Customer Needs Delivering Measurable Business Value Source: ITSMA

12. Solutions-related terms are hierarchical and discrete. A Particular Customer Customers with Common Problems Targeted Segments Targeted Functions Generic Customers Source: ITSMA

13. Solutions appear to be an important part of a company’s overall portfolio. Q: What percentage of your company’s total revenue would you attribute to your solutions business, or to integrated business solutions, vs. discrete products or services? Mean % of Total Revenue (N=31) Discrete product and services revenue (59.4%) Solutions revenue (40.6%) Median: 30% Range: 0-100% Source: Solutions Insights/ITSMA Survey: Selling Solutions, March 2009

14. We noticed a significant shiftin how ITSMA’s members were marketing shortly after “The Great Bust” in 2000… Reasons for the shift: Dissatisfied customers Continuation of product commoditization and margin squeeze A screeching halt to industry growth; a scramble for a more meaningful value equation Let’s give this a bit of a historical perspective…

15. So ITSMA’s members definitely made the move, and cited the following reasons… Others Mentioned The Big Three Increase company revenue (net new) • Increase value delivered to the customer • Increase product or services revenue (pull-through) • Increase share of wallet • Increase customer loyalty • Increase sales productivity • Increase control over customer satisfaction Increase overall profitability Respond to customer demand Source: ITSMA

16. Let’s look at solutions in the context of other strategic planning models.

17. Here are some examples of companies that have moved from products to solutions.

18. ITSMA developed a Solutions Roadmap in collaboration with its Solutions Council. Starting Point Phase 2 Phase 3 Phase 4 Phase 5 Pilot and Test Building the Foundation Organizational Execution The Push and Pull Solutions Mastery Sell OnlyDiscrete Offerings Leverage OpportunisticSolution Successes Enable the Organization Operationalize the Plan Sustain Momentumand Growth FiveCoreElements Organization MarketingActivities Portfolio Management Salesand Sales Enablement Culture andBehavior Source: ITSMA

19. Each Element must be managed as a company moves to a new Phase.Portfolio Management Starting Point Phase 2 Phase 3 Phase 4 Phase 5 Pilot and Test Building the Foundation Organizational Execution The Push and Pull Solutions Mastery Source: ITSMA

20. Member companies have made the changes required to move into the next phases of ITSMA’s Solutions Roadmap. Starting Point Phase 2 Phase 3 Phase 4 Phase 5 Pilot and Test Building the Foundation Organizational Execution The Push and Pull Solutions Mastery 2002 Sell Only Discrete Offerings Leverage OpportunisticSolution Successes Enable the Organization Operationalize the Plan Sustain Momentumand Growth 2007 Source: ITSMA

21. Be careful about your strategy and tolerance for pain! The Evolution of a Solutions Company—From Discovery to Commitment “Wait a minute —What is a solution?” “Hey!! Look! Everyone’s pushing solutions…we better do it, too!!” “Hooray! We’ve done it!Our website says we’reselling solutions…that meanswe are a solutions company!” Technology-Based Solutions “We’re making progress...and it’s worth it!” “Do we really want to sell solutions?” “Hey…this is a lot of hard work.”

22. There are a number of considerations as you develop your solutions strategy. Source: ITSMA

23. The trend appears to be towards “productizing” solutions. Q: Solutions can range from highly customized one-off deployments to highly packaged offers combining many “fixed” elements such as products or implementation services. Some firms strive for mass-customization—the right mix of off-the-shelf products/services with strong market or customer customization. In response to the current economic climate is your firm planning to: % of Respondents (N=31) Build and deliver more customized solutions (16%) Build and deliver more mass-customizable solutions (48%) Build and deliver more highly-packaged solutions (36%) Source: Solutions Insights/ITSMA Survey: Selling Solutions, March 2009

24. So…what are your 3 takeaways? • Complex products require services in order to realize their benefits—the question is who will provide these services? • Product enablement into the customer’s business environment needs to be designed into the product from the beginning • Product enablement requires that you transform your entire value chain—not just your marketing messages

25. Go Forth and Solve

26. Questions