The B2B/Enterprise Software Professional Services Success Formula – Part I

Welcome to Part I of a series of articles that will examine what it takes for a Professional Services Organization (PSO) that is part of a B2B/Enterprise Software to be successful.

Success is achieved by the relentless execution of a proven, prescribed formula. Yes, it exists and can be learned, applied and repeated just like any formula in the fields of mathematics or physics. This article will introduce this proven formula and its various “components” whereas future articles will focus on each component in detail.

Just like a well cooked meal is the result of applying the right amount of ingredients at the proper time by following the recipe in detail, there is also an art to executing each component effectively and efficiently. Experience is key and should not be underestimated – as many poor performing B2B Software PSO’s can surely attest to.  

Let’s take a look at the formula and the 5 components. ALL 5 have to be in place and operate in harmony for success to occur. Miss just one, and the formula will fall apart. Nobody said this would be easy, right?

S + C + E + P / CIR = PSO Success

Component # 1: S – for Strategy, in this case the Professional Services Strategy. Is the goal of your PSO to be a standalone revenue producing Profit Center? Or is the goal to be an “Enabler” whereas the focus lies on quick go lives in order to take advantage of recurring revenue? Many SaaS companies operate in the latter model. Or is it a hybrid approach to at least cover costs? Once size doesn’t fit all and this Strategy will have major implications on the various other components. More on S in the next article…..

Component #2: C – for Customer, in this case CSAT.  The only reason PSO’s exists is to get customers to successfully utilize your software. Customers need to be front and center – they may not always be right, but they are never wrong! This component is all about delivery and execution while delighting your customers – and if done correctly- is paid back multiple times over in the form of referrals and high NPS (Net Promoter Scores)!

Component #3: E – for Engagement. This component focus on your professional services team members. Without engaged, educated employees with the right skillsets to delight your customers, the best B2B Software company simply will not be successful. How is onboarding and ongoing training handled? How deep and strong is your management talent? This component can often be one of the trickiest to manage.

Component #4: P for Practice. Many subcomponents make up the Practice part of a PSO. Depending on the PSO Strategy there is revenue, cost and margin to manage. Team Utilization is critical to ensure the right capacity exists at the right time. What Delivery Model are you using? Are you organized by region, product or role? Using any implementation partners or near/offshore staffing? Are your products implemented by configuring or customizing? Do you use tools such as Professional Services Automation (PSA)? Do you have a right size, scalable and repeatable implementation methodology that is institutionalized? (Please don’t tell me that Agile alone solves all your problems…..) The Practice component is a critical one to achieve overall success.

Component #5: CIR for Critical Internal Relationships. Divide the first 4 components by CIR and you realize that B2B Software is a team sport which requires you to rely on and work closely with other company functions and departments. Sales is the livelihood and oxygen for each PSO. Customer Success & Support are critical partners in the post sales customer journey. Product Management/Development are key partners along with Finance and last but not least, Human Resources. You won’t be successful without CIR – no matter how solid your other 4 components are.

This formula works when all 5 components are addressed equally and “play well together’”. Look for future articles where I will further examine one component of the formula at a time.

In meantime, I would love to hear your comments, thoughts and questions. Assessments, consultations and workshops are available. How would you grade your PSO?