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  1. M&TS Selling the Stack – Storage IBM Services Beyond Base Hardware and Software Presented by:

  2. What are your client’s primary IT Challenges?Balancing IT Availability vs. Operational Costs • Maximize IT Availability • Increasing complexity of the IT environment • Complex Storage solution • Multiple platform types • Middleware SW • Virtualization • 24 x 7 availability demands from the business • Stressed in-house resources • resource limitations (numbers and skills) • Minimize IT Operational Costs • Increasing pressure to ‘do more with less’ How can they achieve these 2 apparently incompatible objectives?

  3. What are the current challenges for the seller? • Maximize future sales potential • Requires that you not only have the products that a client will want to buy but that they are happy with what you sold them in the past • Having the correct level of support in effect will increase customer satisfaction with past purchases and significantly increase propensity to buy additional products from the same manufacturer and seller • Reduce Post Sales Costs • Majority of customer sat issues with Storage products result from client skill & resource gaps and lack of robust internal processes • It is very common for the Client expectation to be that the manufacturer and seller will resolve these issues at no additional cost to the client • Maximize Sales Resource Utilization • Cannot afford to tie up limited sales resources on post sales product issues

  4. Base Support for Storage • What is Base Hardware Support? • If the machine breaks, IBM will fix it • Warranty or Hardware MA (Warranty extended into additional years) • Upgrades available to SSR response times, parts availability, etc. • What is Base Software/Product Usage Support? • Base service is available under 3 different contract types but the actual service is the same • SWMA for Storage products with proprietary IBM SW content • Support Line for Products with no SW (contract provides product usage support) • ServicePac is Support Line sold as a part number under eConfig • All contracts provide a client with access to IBM product Support experts who will provide problem resolution for product defects and answer basic product usage questions • Customer can contact these product support experts electronically or via phone. • Calls are placed to the standard 1-800-IBM-SERV, an Admin representative will perform the following • Ensure service entitlement • Have the customer describe the problem • Select key words in the problem description and use these to determine appropriate specialist support team • Create and route an electronic problem record to the specialist support team • Advise client that they will receive a Call Back from a product support specialist within 2 hours Prime Shift and 4 Hours off shift (Off shift coverage may be limited to Sev 1 if SWMA or Base Support Line with Sev 2, 3 and 4 being next business day). • Key points to remember about Base Support • Base support is designed for those clients that want and the ability to own the majority of the responsibility for managing complex Storage environments at peak efficiency • There are separate paths for reporting Hardware and Software problems under Base Support • SWMA is mandatory for SWMA products but Support Line is optional for Support Line products • SWMA for Storage does provide Off Shift coverage for Sev 1 problems • There is an option to extend Off shift coverage to Sev 2, 3 and 4 problems under Support Line but not SWMA • SWMA and Support Line problems are subject to Call Back i.e. no potential for live call with a Product Support Expert

  5. $ Impact of reduced IT availability due to a problem • Proactive Support • Designed to reduce the number of events. Prevention is ALWAYS better than a cure • CTS provides increasing levels of account management and comprehensive/timely advice designed to reduce the number of incidents • Each event avoided = $517,000 foran average customer • Enhanced Problem Resolution • Designed to reduce the time per business interruption event beyond that of Base Support • Account Advocate and Custom Technical Support provide increasing amounts of infrastructure designed to ensure fast/efficient problem reporting and managed, expedited resolution • Each hour that the impact of an event is shortened = $110,000 for an average customer Note: your potential $ savings increase with the number of Proactive/Enhanced Resolution service elements you have

  6. Enhanced Remote Support Services: Summary • Enhanced Service Options • Optional add-ons to Base Support • Client selects the level of enhancement they need based on balancing service need with available IT budget • All Enhanced Services make remote support highly personal, differentiate IBM from the competition and drive higher customer sat • The following services are core service enhancement options. There are additional options available • Account Advocate (AA): Enhanced Problem Resolution • minimize costs/business impact of a problem • Available for Storage as well as Power Systems, System p, System i, System x & x86 OEM • Enhanced Problem Resolution: Provides fast, efficient problem resolution (unique direct access code, single point of entry for HW & SW, dedicated technical team, 30 min response) • AA Off Shift coverage maps to that provided by Base support contract that is in effect • Custom Technical Support (CTS): Proactive Support & Enhanced Problem Resolution • avoid/minimize costs/business impact of a problem • Available for Storage as well as Power systems, System p, System i, System x & x86 OEM • Provides all elements of AA + provided by senior product support experts + exclusive access to Proweb + contributions by Level 2 Product development/PFE resources to problem prevention + full CTS level support for reported Sev 1 HW problems + easy to customize • ‘Best of the Best’ • Enterprise Support Option (ESO) expands full CTS level support to all reported Sev HW problems and integrates Level 2 skills into day to day CTS support • CTS Off Shift coverage maps to that provided by Base support contract that is in effect • Specialist Support Days: Proactive Support & Enhanced Problem Resolution • Access IBM level 2 experts on demand • Blocks of up to 8 hours of assistance from IBM experts on tasks outside the scope of day to day support • Standard SSD provides assistance that is planned (10 business days notice), remote and during prime shift • Can be purchased as needed or sold with new machines • Non standard usage (any combination of unplanned, on-site, off shift) available an additional fee • What else can I sell for Storage? • WSU (warranty Service Upgrades, Hard Drive Retention, Total Microcode Support

  7. Potential IT Availability $ Impact of Enhanced Services The table below provides examples of how the various enhanced service offerings could impact the number and duration of Business interruptions for an average customer due to the various levels of assistance that each provides. • Account Advocate • This example estimates that the standard interruption will be reduced to 3 from 4.7 because of SPOE, DAC, 30 min response from a dedicated team & managed problem resolution. No waiting up to 4 hours for a callback • Custom Technical Support • This example estimates that the number of interruptions will be reduced to 1 because of the more extensive proactive support provided by CTS and that the hours associated with the 1 problem that still occurs will be 2 due to the higher skills of the CTS team • Custom Technical Support with Enterprise Support option • This example estimates that the number of interruptions will be reduced to 1 because of the more extensive proactive support provided by CTS & ESO and that the hours associated with the 1 problem that still occurs will be 1.5 due to the higher skills of the CTS team which will be also be supplemented by Level 2 skills Note: these are not guarantees of actual savings

  8. How can enhanced services reduce IT Operational Costs? Time = $ • Proactive Support • Maintenance • Without CTS, the client’s own in-house staff are 100% responsible for researching the latest maintenance, determining what’s appropriate for their environment and then implementation. • Information overload can make this a very long, time consuming task • An expert who already knows the client’s environment and has the skills, resources and daily familiarity with this task can reduce what could take days to minutes. • Awareness of the IT Environment • Comprehensive reports detailing all aspects of the environment status and current service issues reduces the time required by in-house resources to maintain this view on their own. • Enhanced Problem resolution • AA and CTS are time savers • Direct access means you only have to explain the problem once • Potential for live call means you may not have to wait around for a call back • Max 30 min contact time vs. 2 hours prime shift or 4 hours off shift • Single point of entry for all hardware and software problems means client doesn’t have to navigate their way through IBM’s contact system • Pre-positioned knowledge of the IT environment reduces the explanation time • Client doesn’t have to use up their own time/resources because IBM Manages problem resolution and the various resources engaged to make it happen

  9. What should you be selling? • Starting Point • Always start by ensuring Base HW (inc. WSU) and SW (SWMA or Support Line) services are already in effect or are being proposed. • Always propose CTS as it provides comprehensive support for both Proactive & Enhanced problem resolution at a very attractive price. Don’t propose ETS because it is a lower service at a minimal price differential with CTS ($100 per year list delta between ETS and CTS for most storage devices) • Upsell from CTS • If the customer service needs or the overall deal will sustain it, propose SSD and/or ESO in addition to CTS • Downsell from CTS • If price is an issue, propose AA which is approx 22% (approx $1k per year per device) of standard CTS list price • Try to add 1 or SSD in addition to AA

  10. AA/CTS and Technical Advisor • What is Technical Advisor? • A customer care centric level of enhanced support included under warranty for select products e.g. XIV, SoNAS, ProtecTIER • All day to day technical support for TA Warranty products is via standard Base support i.e. Warranty/HWMA and SWMA contracts and delivery teams • An assigned, named Technical Advisor (TA) representative provides the following additional services • Coordination / management of IBM support resources for reported Sev 1 /critical problems • Escalation path for client concerns on non-Sev 1 reported problems • Advice on problem avoidance • Facilitation of access to Lab resources for strategic planning • Is there a fee version of Technical Advisor for non-Warranty years? • There is no current fee based version of TA • A fee based version is currently being developed with a special bid version availability in 1Q 2012 and full ISAT implementation in 2Q 2012. • How does TA compare to AA and CTS? • AA and CTS are technical support centric service enhancements • As a result, AA and CTS include comprehensive Enhanced problem Resolution (unique direct access code, potential for live call, 30 min response times, dedicated technical team, single point of entry for HW & SW, managed/coordinated resolution of all reported SW and Sev 1 HW problems). TA has very limited enhanced problem resolution components • CTS includes more comprehensive problem prevention assistance: reports, Proweb, etc. • AA and CTS are consistent with enhanced services available for Power Systems and System x. • When should I sell CTS and/or Fee based TA (when it becomes available) • During Warranty years: Fee based TA can only be sold in non-warranty years while CTS is available at any time. CTS provides a number of service elements not included in TA and so is a very valid and useful support solution during warranty • After Warranty YearsCTS and TA can coexist but if client has the budget for only one, determine if your client wants a Technical Support or Customer care centric approach to enhanced level of support and how much they are willing to pay for it

  11. Maximize Your Earnings Opportunity - Storage Example: • Mid size 7.2TB • Tivoli Storage FlashCopy Manager • Storwize V7000 Software • San Switch • 3 Year Recommended Support HW and SW total price: $112,126 Recommended support price: $36,849 Consideration: • 3 Yr solution reduces renewal cost & maximizes customer sat • Competition • TCO • Availability needs • IT support staff

  12. What are we doing to help you sell these services? • Magnolia Reports • All the data you ever needed to have re: a target client’s inventory, current service status and 12 month service history • Sales Assistant Tool • Designed to provide guidance on which enhanced service to sell based on Magnolia data for an existing client, the needs of a new server/storage device sale. • Also includes services education, links to additional sources of information and suggestions for additional services sales. • Videos • Range of Videos summarizing the various enhanced services in terms of what they are and the value they represent • Proweb Demo at http://www.ibm.com/services/us/its/video/mts_proweb.swf • Default attach in eConfig • Recommendation for enhanced services on new machine sales are now integrated into eConfig • Enterprise Support Options in ISAT • Add on option for CTS is now available to BP’s and can be sold directly out of ISAT • AA, CTS, ESO & CTS/ESO Incentive Program • Program from Jan 15 through June 30 provides additional pricing delegations • AA = 3% off first year • CTS and ESO = 8.3% off first year

  13. Incentive Program Overview & Eligibility Criteria: • Program Overview: • Additional delegations are available for AA, CTS and ESO. • Delegations increase based on level of Enhanced Support purchased and are designed to encourage a potential client to move further up the enhanced services stack • Delegations are also available for AA, ETS, CTS and ESO on Power Systems and System x • Eligibility Criteria: • Client must be net new to the level of enhanced service being proposed or net new to the level of enhanced service being proposed on a particular platform • Valid examples: • Client is purchasing CTS for the first time • Client has AA on i and P platforms but is purchasing CTS for the Storage platform for the first time • Invalid examples (Ineligible) • Client has CTS for Storage and wants to add additional servers • Client has AA for Storage and wants to add additional storage devices • Client wants to cancel current CTS contract and get a replacement CTS contract on same platform with discount • Client must execute the proposed Enhanced Services contract between 1/16/2012 and 6/30/2011

  14. End to End Process for Business Partners Additional Delegated Discount Process • BP to provide a proposal request to IBM via COL with the RTS Request form • BP should put the following in the SWS request form at the top:“Enhanced services Growth Program Additional Request” • IBM (Cathy Glenn) will review and ensure the client is eligible • If client is eligible, IBM (Cathy / SCF) will apply the appropriate discounts and send the schedule back to the BP via COL • BP will execute the agreement with their end user client • BP will submit completed contract package in Contracts ON Line (COL) and include, in addition to the standard contractual requirements: • IBM’s (Cathy) approval • Place the following comments“Enhanced Services Growth Program Additional Discount” in COL comments field

  15. Q & A for Enhanced Services Incentive Program • How Long will this Program run? • Jan 1, 2012 through June 30, 2012 • Why is IBM offering this limited time Enhanced Services Growth Program? • Net new enhanced services growth offers an ongoing revenue opportunity for IBM and our Business Partners. Enhanced services provide an opportunity to maintain long-term customer satisfaction by providing critical services tor our client’s for their mission critical environments • I have several outstanding proposals for Enhanced Services that occurred between Oct 1, 2011 and Jan 15, 2012. Do these proposals qualify for this program? • Yes, if the client meets the eligibility criteria and you want to re-price • Where can I obtain a list of qualifying or approved Enhanced Services eligible products for this program? • Refer to the ETS section of the Supported Products List http://www-03.ibm.com/services/supline/products/javaETS.html • AA, CTS and ESO are eligible for the same products as those listed for ETS • What happens if my end-user customer does not respond by the Campaign end date of June 30 2012? • Customers must execute contract on or before 6/30/2012

  16. Sales Considerations for Profitable Growth • Treat MTS as a line of business • It’s not just HW MA with a new box or managing renewals • Incorporate this into cadence at the account exec level • Invest in resource(s) with quotas to focus on this services stream • Build up subject matter expertise that can optimize what account execs and hardware sellers are doing • Take advantage of available MTS resources • Bring GTS channel reps, BDMs, etc. in to work with your leadership teams AND local offices • Deep dives (example below), education, sws magnolia reports

  17. Account Advocate (AA) Definition • Personalized, fast/efficient enhanced problem resolution for Power Systems, p, i, x, x86 OEM and storage • Primary focus is on ensuring easy problem reporting, fast access to experts and managed/coordinated problem resolution for eligible products such as Operating Systems and Storage SW/product usage • Secondary focus is on providing a single point of entry for other IBM product issues associated with an eligible server/storage device to ensure an overall support view of the IT environment • Ideal for Clients with IT skill gaps, with high %’s of Sev 1 & 2 issues, running mission critical applications in complex IT environments, who want or need to know that they have all IBM’s resources available to them if they encounter a problem Features • Priority Access • Single Point of Entry for all IBM Product problem submissions allows you to report any Hardware/Software (OS, Middleware) product problem to the dedicated team if you have a valid IB support contract for the product • Unique Direct Access Code (DAC) bypasses Admin layer and takes you through to the dedicated technical team • Priority Response • You will be working with a technical expert within 30 mins prime shift (option for 24 x 7) vs. 2 hours for base support • Priority Handling • Dedicated team that already knows you and your environment handles all submitted problems. They will directly resolve problems whenever possible and either engage/coordinate/manage additional resources (eligible products such as OS /Storage SW) or route to specialist support team (HW, Middleware) as necessary • Named Account Advocate is your escalation path for any service issues. Benefits • Designed to meet the rapidly growing need for enhanced IBM assistance on complex/critical parts of the IT environment • Designed to MINIMIZE the costs/business impact of a problem when one has occurred • Lowers overall operational costs by having IBm manage/coordinate the problem resolution process.

  18. Custom Technical Support (CTS) Definition • Personalized, proactive, technical support solution for Power Systems, p, i, x, x86 OEM and storage • Primary focus is on providing comprehensive in-depth technical support for each eligible platform/machine • Secondary focus is platform/technical support centric account management of the support relationship • Ideal for Clients with IT skill gaps, with high %’s of Sev 1 & 2 issues, running mission critical applications in complex IT environments, who want or need the best service available and/or want a service tailored to their needs Features • Assistance with Problem Prevention • Product Support Experts who know your environment and who use that knowledge to provide advice on product optimization, tips/techniques and problem prevention • Proweb: reporting/management tool exclusive to CTS Clientshttp://www.ibm.com/services/us/its/video/mts_proweb.swf • Account Management • Named Senior IBM Support focal point who owns the support relationship and maintains regular contact via electronic reports, status calls, etc. • Acts as an extension of client’s own IT staff within the IBM Support structure • Enhanced problem Prevention • Direct access via a unique code to a senior skill level dedicated team of Product Support Experts that already know your environment and only works with CTS clients for all HW/SW problems associated with an eligible machine. This team either directly resolves or ensures managed/coordinated resolution of all reported problems. • Can be easily customized to meet client specific service needs Benefits • Designed to meet the rapidly growing need for enhanced IBM assistance on complex/critical parts of the IT environment • Designed to greatly enhance a client’s ability to AVOID the costs/business impact of a problem before it has occurred and MINIMIZE it when one has occurred • Lowers overall operational costs by maximizing a client’s ability to leverage the efficiencies gained by utilizing IBM’s skills and resources

  19. Enterprise Support Option (ESO) for CTS Definition • Predefined package of additional service features that expands the range of CTS support level support provided for Server and/or storage Device Hardware & the depth of skills assigned to provide CTS level support on a day to day basis • CTS is a mandatory pre-requisite for each platform that requires ESO and 1 x Specialist Support Day (SSD) purchase is required with every ESO contract • Can be purchased via ISAT without the need for a special bid as of July 27 2011 Features • Integrated Hardware/Software • Standard CTS provides CTS level support for Sev 1 Hardware problems reported directly to the CTS team and which are related to eligible servers and/or Storage Devices • This service feature expands full CTS level support to all Hardware problems (Sev 1, 2, 3 and 4) reported directly to the CTS team & monitoring/engagement as necessary by the CTS team of any Sev 1 Hardware problems reported via other channels (direct to HW Support, electronically, etc.) • Integrated Priority Development Team • Standard CTS Proactive Support provides proactive and enhanced problem resolution by senior Level 1 product support experts • Under this service feature, Level 2 specialists for Software and Hardware (PFE) will contribute to day to day CTS proactive support via Proweb data analysis, product critical issue notification, advice, etc. • Under this service feature, Level 2 specialists for Software and Hardware (PFE) will actively monitor for and prioritize requests for assistance from the CTS team on critical problems from ESO level clients Benefits • Expands CTS Hardware coverage to ensure that CTS with ESO is truly a complete HW and SW support solution • Expands the skill levels assigned to CTS day to day support to maximize clients ability to AVOID the costs/business impact of a problem before it has occurred and MINIMIZE it when one has occurred and reduce overall IT Operational costs

  20. Specialist Support Days (SSD) Assistance from IBM Product experts on tasks outside standard support scope Features • Blocks of up to 8 hours of assistance from IBM Product Support Experts • Standard SSD: assistance is provided Planned (10 business days notice), remote from client location and during prime-shift. • Can be pre-sold with new machine sales or support contract renewals. • Client advises IBM at ssdays@us.ibm.com when they have decided how they want to utilize their SSD • Non-standard usage (any combination of Unplanned, Onsite, Off-shift) is available for an additional fee Benefits • Allows clients to access and leverage IBM’s top HW and SW experts for specific tasks outside the scope of standard support e.g. Healthchecks, OEM product issues, education transfer, etc. • Flexibility to leverage IBM resources as and when needed. Ideal for • Clients who need short term ‘heavy hitter’ assistance on unique tasks/requirements • Clients with internal skills/resource gaps • Clients who want to budget ahead to cover such potential needs and pre-buy SSD before they have a definitive decision on how they want to use them.

  21. Hard Drive Retention Allows clients to retain highly sensitive data and help ensure privacy Features • Available for IBM System i, System p, Power, System x and System z or Storage products. • Provides clients with the ability to maintain control of sensitive data based on federal, legal and internal corporate guidelines. • Services are available during the hours defined through the product warranty or maintenance service agreement. Benefits • Helps safeguard the security and privacy of sensitive data • Helps customers comply with Federal Legislation • Integrates data security compliance into system support processes • Transfers accounting of hard drives as an asset to a maintenance support service Ideal for • Clients who need to track and dispose of hard drives that may contain sensitive client, corporate or other security data (i.e. financial services, healthcare, retail)

  22. Total Microcode Support (TMS) Clients can utilize IBM to perform Microcode tasks Features • Maintaining Microcode installed on Server and/or Storage Device at the latest levels is a customer responsibility. • TSM provides 2 levels of optional assistance from IBM on this responsibility. • Basic Level: IBM will analyze installed Microcode and provide advice on any required changes • Advanced Level: IBM will analyze/advise and perform any upgrade the client wishes to perform on their Server and/or Storage devices. Benefits • Lowers Operational costs by reducing the burden on in-house staff to perform tasks related to Microcode • Client can leverage IBM skills & expertise • Avoid the costs/business impact of encountering a problem related to back dated Microcode Ideal for • All Clients who want to ensure their Microcode is at the latest levels in the most cost effective and efficient manner. Not Necessary for • Clients who have CTS in effect. The combination of Proweb, a named IBM TSM and regular status calls provides all the elements of Basic TMS

  23. US MTS Software Services – CTS enhanced with ESO (Dark Green) Note 1: Purchased separately from main service Note 2: Purchased separately, minimum of 1 x SSD per ESO contract

  24. Software Services – Service Deliverables