Re-imagine the Traditional Channels of Outsourcing

By Robbie Kellman Baxter, President, Peninsula Strategies

It’s about access over ownership, ongoing relationships over anonymous transactions and about opening up the conversation so it’s not just from the organization to customers, but back and forth and even among customers themselves. The Membership Economy starts when the organization establishes a long-term, formal relationship with customers, and requires a new perspective, one in which the customer’s mission as at the center of the organization. Companies need to be customer-centric, not product centric.

The implications for outsourcing are significant. Enterprise services companies have an opportunity to rethink their offering as a membership. Instead of selling hours, or fixed price projects, or cost-plus services, they can move to a membership model. Start by understanding the value that customers hope to get—something like “Peace of mind that our technology is current and works”. If that’s what you’re selling, the delivery may change over time—different technologies, different support services, but the goal stays constant. Perhaps customers will pay an annual fee to have that need met, and they won’t have to consider each new project separately. The organizations that hire enterprise services companies actually have the opportunity to increase usage of SaaS companies, which provides them with many of the benefits of membership—the software is always “current” and the costs to buy, implement and maintain their solution declines. Organizations can access the services that they need without the disadvantages of ownership.

Many EO organizations have resisted the move to SaaS, but they shouldn’t. Instead they should pick and choose and experiment with the many SaaS products. One of the greatest advantages of SaaS is that it allows the business user to take a greater role in the evaluation, purchase and implementation of their technology solutions, freeing up the more technical team members for more sophisticated research and development projects.

Enterprise services companies that focus on improving the condition of their customers embrace SaaS, as it has some distinct advantages v/s premise solutions. And in the Membership Economy, organizations need to evolve offerings based on what’s best for the customer.

Finally, Enterprise services organizations have an opportunity to create community among their members. They can open up lines of communication so members with similar challenges can share ideas and support. They can provide thought leadership for a whole segment of customers, and engage the members in discussion. They can provide opportunities for members to develop and distribute user-generated content that might prove useful for the whole community. Marketo and Salesforce have done a great job at building community around their products. There’s room for the services firms to do the same.

Disruption is all around us, but organizations that stay close to their customers can stay ahead of the curve. By building a “forever transaction” they can build loyalty that is hard to break through. Why Now? Implications for Tech

1.Everyone in the organization will be increasingly involved in the tech buying decision (I am advising marketers, sales people, ops people, to do their own due diligence etc)

2.More of farming approach than a hunt and kill—ongoing iterations rather than a big reveal (leverage the power of agile)

Quote: Disruption is all around us, but organizations that stay close to their customers can stay ahead of the curve