Business Strategy for Software Executives
July 30, 2007
Killer KPIs to Drive Your Services Business
Here’s a look at which Key Performance Indicators are the “gotta measures” for building the bottom line of your services organization.
By Jeanne Urich, Adexta Strategy Consulting
As the technology market has matured, there has been a dramatic shift in overall revenue and margin contribution derived from Services. According to a recent Association of Support Professionals survey of the Top 100 publicly traded software companies, Services (PS and maintenance) now represent from 50 to 80% of overall revenue. Service margins have also dramatically improved, propelled primarily by healthy support margins (exceeding 80%), Service margin contribution is now 45 to 80% of total Service revenue. Seemingly overnight, Services have become quite respectable sources of revenue and margin.
With the growing contribution and significance of Services to the bottom line, it’s never been more important for software companies to effectively monitor, measure, and manage their Services businesses.
Running a Professional Services business is very complex – and it’s a game which must be won with “singles and doubles”, not homeruns; so it is imperative to know which KPI’s are “essential”, what the right targets are for each KPI and how improvement of specific KPIs can improve the bottom line.
Software Gets SaaS-y
This week, three SandHill.com Blog posts describe evidence of the strength of the SaaS model.
Publish Your Perspective!
The SandHill.com Blog wants your opinions. Send your thoughts on the enterprise software industry to email@example.com and we’ll publish them in our blog.
Focus on the Customer: Merrill Lynch
Merrill Lynch has combined operations with IT in a single unit. Diane Schueneman, the head of the company’s Global Infrastructure Solutions, explains how she is changing both to focus on the customer in this article from The McKinsey Quarterly.
News Update: Moving On Up
Vendors move up the value chain; plus, evidence of SaaS success, HP's big deals, and the threat of "Summer Solstice" and "Pinch." Read these stories and more software news of the week in the latest SandHill.com Software News Summary.
Poll: Services’ Impact?
In the next three years, how will the impact of services revenues on software vendor performance evolve?
Last week, readers gave their opinions as to whether Microsoft posed an on-demand CRM market share threat to Salesforce.com.
More at SandHill.com:
How Microsoft bought China.
Achieve3000 receives $9 million from Insight Venture Partners.
RH Donnelley buys Business.com.
Art Technology Group names Drew Reynolds as SVP of corporate development.
Send us your feedback on this newsletter and the SandHill.com site.
"The penalty of success is to be bored by people who used to snub you."
Courtesy of Malcolm Kusher, The Kushner Group
THIS WEEK'S SPONSOR
Founded in 1994, The Devon Group delivers quantifiable public relations results. Our full range of services helps organizations build credibility for new products and ventures, influence customer-buying decisions, and claim new markets.
Software Pulse is a publication of SandHill.com, the online resource for software business strategy.
To unsubscribe, see the bottom of this email.
Send us your feedback,
SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.