Top Professional Services Management Challenges – Part 1

By Rudolf Melik, Chief Executive Officer, Tenrox - September 1, 2010

Perspectives on managing an embedded services team in a high tech company

Managing the professional services team has been and continues to be one of the most demanding positions at any fast growing high tech company with an embedded service team. Our professional services team went through some major organizational changes and process improvements as we transformed our business starting five years ago from on-premise installed software to a cloud based project management solution provider.  I wanted to share some of our hard earned lessons and experiences around professional services management with the PSVillage community. PSVillage offers an excellent peer to peer community for service professionals. I think it will be beneficial to discuss how senior executives outside the PS organization view the professional services function. The top PS challenges discussed here are related primarily to an embedded professional services team focused on the implementation of a company’s high tech (such as a cloud-based solution) offering. Based on our own experience and that of executives in several other companies, these are the types of challenges mid- to large- sized high tech companies are likely to experience with their PS teams.
I do not claim to have all the answers for the issues described here. I wanted to share my perspective and hear from the rest of the PS community. In this article I will lay out the top challenges as I see them without proposing any solutions.
Professional services team is too busy
PS team goes through periods of maximum overload. During these peak times it is hard to communicate with any member of the PS organization. They are so busy that one hesitates before asking a question or inviting senior PS team members to participate in industry related conferences, strategy or product review meetings. PS management in general does not have a good handle on the demand pipeline. They get flooded as soon as a few nice deals are closed and then struggle to reallocate, find or train the required resources. This happens from time to time no matter how good the resource management and scheduling tools are, how great the CRM forecast reports are, how well the sales team collaborates with PS management on sales opportunities, and regardless of how much attention is paid to capacity planning and project pipeline projections. It is sometimes related to overly optimistic or pessimistic forecasts by sales and PS management; of course the overbooking is worst when the sales team closes a lot more business than they forecasted in a short period of time; and at the same time PS resource booking plans were even more pessimistic than that of sales forecasts.
Problems are thrown over “the wall”
The PS team of any growing company is likely to go through a resource crunch from time to time. The tendency during these peak periods is to try and hand off problems to other departments as quickly as possible. Here are some examples:
-          Product issues: if a potential product bug is encountered PS immediately escalates the problem to the product development team. When you look at the frequency and occurrence of such escalations, a majority of the issues are in fact caused by poor diagnosis, bad configuration, or customer- or operating environment- specific issues. This frustrates the product development team who has to spend time chasing product issues that do not exist, creating a “cry wolf” syndrome.
-          Marketing activities: marketing team has a hard time collaborating with PS team members on creating customer content such as press releases, case studies, webinars and testimonials. Various companies have devised incentives programs to try and encourage such cooperation but none of these programs has ultimately resulted in any significant improvements. Assisting the marketing team and creating customer content is never a priority for PS team members, yet their relationship with the customer and knowledge of the account makes them indispensable in the process. PS team members try to do the absolute minimum, forget to follow up, evade the topic, pass the buck over to anyone else they can delegate the task ownership to, or outright say they have no time to do this, leaving marketing frustrated and feeling helpless.
Most PS initiatives are tactical
PS team is focused primarily on the customers and projects of today. It takes considerable effort, follow up and discussion to get PS management to invest in and execute longer term strategic projects that result in improved productivity, increased margins and customer satisfaction rates. When PS is challenged on the status of such projects the feedback is that most resources have been shifted to current implementations, to do billable work or to complete projects already in progress.
On a similar note, PS team members do not sufficiently participate in new product development (NPD) activities such as spec reviews, NPD discussions, product reviews, and new product technology training sessions. PS team starts to learn about some of the new features only after the product is released. For example at Tenrox, we fully appreciate the important contribution PS can make to NPD; therefore, we have targeted 10% of every service team member’s time to be dedicated to contributing to NPD activities. We even emphasize to PS that they will be rewarded for such work and it will count the same as billable time as far their bonuses are concerned. However, when we go back and measure how much our PS team members actually spend on NPD it is consistently in the 3% to 5% range. When asked why the feedback is customer projects always come first; and there were many customer related activities during that period.
Final Thoughts
These are typical challenges I have experienced and have heard others talk about for embedded service teams in growing technology companies. I wanted to share them with the PSVillage community and to see how you have dealt with such issues. I only described the challenges without offering any specific solutions. In part 2 of this article, in addition to my suggestions, I will communicate other PS management challenges the PS Village community members have experienced and any solutions you propose for these issues.