The growing prevalence of subscription business models and next-generation technologies is fueling large-scale digital transformations to make companies more productive, smarter, and faster. These trends portend a significant change in the way B2B software vendors support newly digital companies.
In the past, the professional-services arms of software companies focused on installing, customizing, and deploying applications for customers. Today, they must help customers to design, implement, and adopt new technologies (for example, machine-learning-based applications and blockchain) and to migrate workloads to the cloud. In short, software companies are now called on to be partners, not just vendors. And this means that the software industry is being challenged to reassess its entire approach to professional services.
We find that many software vendors encounter challenges navigating these shifts. Until now, their primary focus has been research and development, sales, and marketing. For some companies, the professional-services unit was viewed as a cost center or, at most, a low-margin revenue generator. Many professional-services businesses therefore haven’t invested in the new tools and capabilities they need to propel their operations. That’s a mistake. Software vendors must strengthen their professional-services offerings to meet their customers’ new demands and to maintain or increase their market share.
To transform the services business and position it for the future, software companies must act along five dimensions: defining the strategic vision for services, reimagining the services portfolio, investing in skills, adapting the services-sales model, and delivering services more efficiently.
