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Service Portfolio Management: A Key to Sustainable Revenue Growth
In this 4-minute video, we cover the importance of service portfolio management in a services business. Watch below or read the transcript below.
Introduction to Service Portfolio Management
A service portfolio manager works with delivery, sales, and marketing to inform your services strategy and plan investments to meet market needs. Here's what they do to sustain revenue growth.
Service Providers Take Pride in Their Work
Service providers pride themselves on the value they provide customers via great service delivery, customer support, and a variety of offerings. However, service pros often lose sight of their portfolio strategy, if they have one, which can have costly consequences due to market shifts and changes in buyer behavior. Service portfolio management is becoming critical to sustainable growth. While service management focuses on delivery, project margins, and customer satisfaction, service portfolio management focuses on your portfolio of services. Its main purpose is to ensure the right services are being delivered to the right customers and they are aligned with the overall business's objectives. The service portfolio manager works with delivery, sales, and marketing to inform their strategy.
There are three key reasons why service portfolio management is important. Keep reading to find out.
Managing to Current Market Needs
Not managing your portfolio with intention can cost you significantly in the future. For example, if one or two large customers drive how you design and package your services and or solutions, you may end up with a disjointed portfolio and find yourself investing time and resources into solutions no one else wants or needs.
Additionally, if you fail to pay attention to market trends, your business will become outdated, making it easier for competitors to move in. Once this occurs, the amount of investment required to update and upgrade your services will be enormous. A service portfolio manager can proactively bring customer and market insights to the delivery team for future investment planning.
Impact on Marketing and Sales
Buyer expectations have shifted and the days of selling based on service, SKU, and price are gone. You must arm your sales and marketing teams with the tools to clearly articulate your value to your ideal customer profile. A service portfolio manager can help identify where sales and marketing should focus to drive greater revenues. Without such input, you may spread yourself across too many go-to-markets and delay or impede your ability to scale. Furthermore, a service portfolio manager can provide buyer and customer insights for ideal customer profile development, buyer personas, messaging, and training. With proper implementation by sales and marketing, you can achieve higher conversions, shorter sales cycles, and more effective onboarding, meaning a greater return on sales and marketing investment.
Aligning to Organizational Goals
The most overlooked benefit is the impact on organizational alignment, even in small organizations. Misalignment is bound to happen through different goals, lack of communication, and corporate politics. A service portfolio manager can keep teams aligned to the overall business objectives to achieve them quicker and more efficiently and help promote an environment of collaboration and accountability.
Establishing a Service Portfolio Management Function
If you don't have a service portfolio manager, here are some of the best practices to consider when establishing the function.
- It can be difficult to hire an experienced service portfolio manager. So look for someone with product management and product marketing experience who can apply the same principles to service businesses or enlist a third party, go-to-market strategy firm, like Alveo, until a full-time resource can be justified.
- Promote and evangelize internal cross-departmental workshops for greater alignment buy-in and accountability. Encouraging this type of culture increases the likelihood of successful service portfolio management.
- Document processes and definitions to help reduce possible misinterpretation or vagueness and create alignment. Documentation can also be leveraged for future training and onboarding.
- Track leading indicators like shorter sales cycles, increased conversion rates, and shorter onboarding to measure the impact of service portfolio management.