Service strategy crucial to software vendors’ survival says IDC

BANGALORE: IDC’s latest analysis on "Services Strategies for Software

Vendors" states, during these tough economic times, there is a select set

of software vendors that are leading the charge in improving the experiences of

their existing customer base to counteract the extended sales cycles through

providing comprehensive service offerings."

"Customers consider services provided ‘after the sale’ just as

important as quality and functionality of the product, because it leads to its

effective use and maturation with the company’s needs," said IDC

Asia/Pacific, market analyst, software research, Grace Lai. "The good news

is that should the software vendor strike the right balance in customer care,

professional services and education, it will see quantifiable benefits in

reputation, ease of on-selling, product improvements as well as staff and

customer loyalty — invaluable during the current economic trends."

By researching on at least 40 independent software vendors (ISVs) around the

region, IDC are able to conceptualize the 7-Steps Services Strategy model. The

model focuses on the importance of working with the customer-facing staff ‘on

the ground’ and reinventing the internal business processes related to

delivering services to the customers. Underpinning efforts is the creation of a

"manifesto" from the service team — what they see customers wanting,

what they would like to improve about their services operation —

externally-facing and internally-facing, systems, skills level and communication

channels.

Whilst the application software market is expected to top $8.5 billion by

2004, IDC predicts that its related services will be almost twice the size at

$16.3 billion worldwide in the same time period. "This represents some

significant gains for vendors, particularly those in the enterprise applications

market, to expand their revenue streams. However, any change should be conducted

in consultation with internal front-line service staff, partners, and customers

with executive sponsorship," added Lai.