Jeff,
That’s a really good question and I would invite you to consider it from two different perspectives:
1. Financial/Accounting. In this regard, you’ve hit the nail right on the head: how do you create a short-term, fixed fee SOW that meets SOX
and VSOE criteria. This is a fine line to walk and can be done. We’ve seen some organizations take an approach by eliminating SOW’s for any
project under a certain revenue or timeframe. That approach works in some cases. Alternatively, we’ve seen other situations whereby the
short-term, fixed-fee SOW is exactly the same for every single customer and this gets around some of the legal and accounting issues. In
either case, we find that it’s easiest to work with legal and accounting to help craft these terms for the SOW’s and, hopefully, not
over-engineer it so that the customer experience is tarnished.
2. Which brings us to the more important subject: The Customer Experience. Customers are demanding more and better services from
product companies, especially in the area of short-term, fixed-fee services. The key is to make it easy and simple so that the customers
find it easy to buy and your sales teams find it easy to sell. In this case, adding short-term services enhances the value of the products and
the customer sees more value. Utimately, services becomes a driver of product sales.
That’s a high-level overview. This is a problem that probably deserves more discussion. Feel free to contact me if you want to talk more
about it. 713.344.0050.
Steve
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