Transitioning form Services to Products

Transitioning form Services to Products

The Software Engineer Perspective

In the world of Information Technology, we have for decades have seen the formation of companies by thinking new ideas and bringing about products that untimely make the company revenue. Its simplest form since the introduction of patents is the creation of ideas and just that being the core product a company can simply rely on as a means of revenue. Now and for the past fifteen years we have seen companies change from simply providing a service to selling products. The greatest companies today have leveraged there transition to create something even grater: technologies.

To transition form a service company to Products Company has never been simple. A company whose sole purpose is to provides serves (any service) may have intellectual property of process that can be leveraged  to create products. It’s this bridge that will help ultimately navigate a company forward. Unfortunately not every services company has made this leap. Most CEO’s do not understand this transition. Most CEO’s are trying to catch up to the next buzz word in the technology world. The idea of making the evolution itself goes against what all CEO’s have been thought in there MBA courses or experiences of there career in leadership. The classic definition of business industry and business model simply tells us to focus on and fit into a category. This idea is against the intuition or natural progression of what startups have been exercising for the past decade. It’s that fitting into that differentiates and simply goes against what startups have been doing: redefining the definition of business economics.

The companies who have figured out the transition: Google, Amazon, FaceBook to name a few admired names are destined to rise above services to products and ultimately technologies. We all recall the Warren Buffett rule where he would not invest in Google because they didn’t have a product. Well if we look at Google today they not only have several products in there portfolio, they have become behemoths of services and products which are aligned to there list of technologies.

So how does a services company look into owning what’s rightfully theirs? i.e. how can a company or you the CEO or employee help make the transition and when do you know that’s your product? Ask your self a few questions about your company:

1)      How do we differentiate ourselves from our competitors for the services we specialize on?

2)      Do we have patentable ideas or streamlined processes that are derived from the differentiation?

3)      How can we bring about product(s) from ideas? 

4)     Do any of the products integrate and bring about technologies that provide grater value?

From the above only the first three are the most critical in transforming a company from services to products. The forth question is clearly intended bold as there may be multiple products a company can create therefore forcing to ask the question if all products are aligned to meet the companies services. i.e having a “cup-cake solution in the cloud” as stated by Paega Systems CEO Alan Trefler is not a sustainable solution.

It just may be most of the audience that’s reading this post is not a fortune 1000 CEO, but no matter who you are {Business Analyst, CEO of your startup…} if you are thinking about providing grater value to your customers or transforming your company: making the transition form services to products may just be the conversation to hold with your organization.

Improving processes: from as best as possible to

Most often process that have been changed to bring about a more leaner steps and more importantly savings are ignored after being utilized by the business. This is due to senior managers deeming a solution to be working as best as possible. From than on, the focus for changes is looked about in other places of the business rater than the most utilized business process. In some factors the ignorance is due to the complexity of the process and lack of know lodge from other members of the company. It can also be the idea: if a process has automation which has brought great deal of people savings, it’s also deemed as the standard thus there is no need further change.