May 23, 2012

Services companies need products - as much as product companies embrace “as-a-service”

May 23, 2012 - I run new products for a services company. This is what my organization does, every day, every week, and every month. We have no other job. Designing, building, launching, and supporting "products" in a company that offers services - that's what we do. And we love it. And if it sounds like my group and I are in wrong place - and the decision to build this unit made by our former CEO, and restated by our current one, was odd - think again, and think about…SAP.

History makes strange bedfellows look oddly similar.

My former employer, SAP, that in 2004 hired me as part of a team reporting to the CEO dedicated to creating platforms to give clients access to our software "as a service". That is, the software giant had realized that its clients started tiring of the usual pay-licenses-pay-system-integrator-pay-tribute-to-god-of-good-luck process. But at that time, selling software as an annuity stream to clients was anathema, and we weren't that good at it anyway. Hence our strategy was simple and elegant: embed our technology into service providers of business services, so that they could deliver "platform based BPO". Reliably. Quickly. Inexpensively.

This is where the platform BPO stuff started. By the way, we didn't call this stuff BPaaS in those days. In those days software as a service was still relatively nascent, the only cloud people were talking about was the one that makes you bump when landing into London Heathrow, and Genpact was still called GECIS - and counted only about 10,000 employees.

Ah, and back then nobody knew what an iPhone would be. Do you remember those days?

The reason why a product company wants to make its products "as a service", and a service company wants to have more "products" is simple. Because this is what the market wants. Creating repeatable solutions helps building better mousetraps, because you share the investment across a number of clients - that is, you can invest more. It helps our company better harness new trends like cloud computing, because we learn once and deploy that learning multiple times… embedded into a service that includes reusable assets - from very robust operating procedures to multi-tenant technologies. Ultimately, new products help our client base leverage the initial investment in the relationship with us and get additional value by relying on a more extensive portfolio of services.

Simple, but not easy. Services companies don't grow product innovation capabilities by mistake. Consultative, domain led sales of services is a very complicated art (or science, when you add SEP) but it doesn't develop the skills of great product companies. One needs to read into markets, not deals; test increasingly finalized solutions iteratively with multiple clients before building the real thing; and sell systematically what you have, as opposed to what the next conversation might lead to.

That's why Genpact has built a significant advantage through the work we have done in the last two years, and even the work that SAP did since 2004. We have learnt, rewired our company, spread new practices and injected a new genome. And in the process, we have launched a raft of very interesting products - from a business process platform enabling investment banks to comply with Dodd-Frank act on swap derivatives, to a framework helping our clients' shared services to run better; from an analytics-based optimizer of inventory, to analytics that help heavy equipment OEM's maximize the profit from their maintenance service portfolio.

And the next steps are going to alter even more radically the way we look at our industry, and the way work is delivered globally. Stay tuned. You might even get to do something useful with your iPad….

About the author

Gianni Giacomelli

Gianni Giacomelli

Chief Innovation Leader

Gianni serves as Chief Innovation Leader where he drives and sponsors Genpact’s strategic initiatives aimed at sustaining clients’ transformation into digitally-enabled companies. He also co-leads the Massachusetts Institute of Technology (MIT) efforts to set up a Collective Intelligence Design Lab.