Extending the Life Cycle Part 1


Extending the Product & Service Life Cycle Part 1

Getting more from your products and services

Set the scene.

In any organisation you have technology, and in with any technology you have an end user.The end user may be an employee, or they may be a client or customer.When aiming for world class product and service delivery it is arguably best to assume that all end users are customers.It doesn’t matter if they are internal or external to the organisation they are always to be valued and the service they require should always be of the highest quality.Customers comprise the heart of any business model. Without (profitable) customers, no company can survive for long, and standardisation of services sometimes does not take this into account.In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviors, or other attributes.A business model that reflects the services and products that you wish to deliver should define ideally, several small Customer Segments.An organisation should really make a conscious decision about which segments to address and which segments to ignore.Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs.Customer groups represent separate segments if:

  • They are reached through different distribution Channels
  • They require different types of relationship management
  • Their needs require and justify a distinct type of offer
  • They have substantially different profitabilities residing from products and services
  • They are willing to pay for different levels and aspects of the offer in different ways

Mass Markets

One of the principal issues with business models focused on mass markets is that they don’t distinguish between different Customer Segments.The Value Propositions, Distribution Channels, and Customer Relationships all focus on one large group of customers with similar business issues that need attention.Commonly found in mass manufacturing with a singular business requirement of “owning the sector”, these types of business models do not ever look at smaller sized markets or customers with niche requirements embedded within a bigger business requirement.

Niche Market customers

Business models targeting niche markets cater to specific, Specialised Customer Segments.Everything connected to this type of Customer segment, Value Propositions, Distribution Channels, etc. are all tailored to the specific requirements of a niche market.Where someone is making something especially for someone else, such as a supplier demand type of business model, like perhaps a flour supplier to a bread making factory, then they are adjudged to be a niche market.

Diversified markets

An organisation that has a diversified customer business model might provide services for two unrelated Customer Segments with very different requirements.Amazon, Apple, and IBM have all moved from originally selling products, to bolt on services, processes and other value add components. This change in service delivery component meant that they were now selling to a completely different Customer Segment.This also means that the value proposition that these companies were proposing when starting out has changed significantly.Evangelize has adapted its business case creation to incorporate 5 different types of approach when designing a business case. The strategic rationale behind this diversification allows companies to ensure that Value Proposition, Delivery of Services and Products, Strategic Planning, and economic output are all catered for within the product life cycle. 

Segmented customer markets

A great example of this would be a cloud storage offering from a third party cloud supplier. Technically speaking similar levels of service could be offered to multiple customers, but customers may want a mix of private, public or hybrid cloud.All options have similar but varying needs and similar types of issues in order to provision properly but the ramifications for other functions within the business model, such as the Value Proposition, Distribution Channels, Customer Relationships, and Revenue all compact into a similar but still effective solution that is offered differently depending on the sector.Key elements also to be taken into advisory when looking at models like this should also reside around how variations of the product or service are going to be supported. It is not going to be a profitable business model if your operational costs are exponentially driven up delivering to multiple user bases and markets.

Final thoughts

When Evangelize was created we wanted to address three key points.

  • Poor Programme and Project Management.
  • Core Deliverables that are not fit for purpose
  • The statement that “Technology is a cost and never a profitable practice” within an organisation.
Treating projects differently for internal users within your organisation than you would external clients and customers is madness.20 years ago you had to decide from a technical perspective how you wanted to provide services and products before you implemented any solution but now you don’t.So why do we still run a majority of projects and programme delivery like we did 20 years ago?Primarily this is because the way that projects are delivered has not changed that much.Don’t be fooled by agile delivery masquerading as something new, it isn’t. The method of how something is created does not affect significantly if someone is going to use it.75% of Digital Transformations fail, how many of those are using agile ?
  • Business cases still only have financials in them for the CFO to sign off on.
  • Plans are still created that do not incorporate business benefits.
  • Tracking still doesn’t exist when deploying solutions to end users.
Obviously some companies are trying to change this and with better PMO capabilities benefits are sometimes tracked better than they were 20 years ago. There are always exceptions to any rule.Extending the life cycle of what you deploy and to whom has to start at the very beginning.
  • Gather information from the user base if you know who they are.
  • Incorporate that information into your planning.
  • Keep those people locked in to the process of delivery by making information transparent and easily accessible.
  • Never close off the marketplace you are aiming at to “change”.
  • Provide a portal so that end users can feedback “change”
  • Identify the marketplace you want to address but be ready to flex or duplicate if necessary.
At Evangelize we try to create multi-sided business models and execute against them.They are platforms that bring together two or more distinct but interdependent groups of customers.They create value by connecting different groups of customers together such as how Credit cards link merchants with cardholders; computer operating systems link hardware manufacturers, application developers, and users; newspapers link readers and advertisers; video gaming consoles link game developers with players.Understanding this concept from the outset will go a long way to extending the life cycle of your products and services, and incorporating your users both internal and external, into the overall ethos of what you are trying to achieve.

What’s next for your business?

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