I have had great discussions with peers in different companies related to service offering portfolios, and I have noticed there are truly many viewpoints to offering portfolios.
Teams focusing on development usually think more about the New Offering Development Portfolio – what are the new offering development initiatives teams are focusing on? Also there are brilliant development ideas from many different sources in the Idea pipeline to develop new service concepts or to further improve current offering with new features. When discussing with the sales and operations people, focus is naturally on available customer offering portfolio: what can we sell for different customers segments and in different geographical areas? How do we bundle offering – what to sell together?
Here is how I have structured this portfolio funnel based on the literature, but also based on practical experience:
Service Idea Pipeline
Service innovation space was already covered in detail in the previous blog post: Exploring Service Innovation Space.
Based on the studies, the ideas for new service offerings may be originated form many different sources: from customer co-creation and feedbacks, from the sales teams actively meeting the customers, from the operations delivering the service, or any other internal stakeholder groups, partners or even from regulation or legislation. To capture systematically these ideas is critical – otherwise your next 1 billion opportunity may be lost.
Capturing the idea into innovation tool or backlog is not enough – the idea requires analysis – do we have be business case, is the idea aligned with the strategy, and how the idea could potentially be implemented? Here are few good practices, which are
- Collect actively development ideas from many different sources: customers, partners, service delivery organization and operations, sales, R&D and other stakeholder groups.
- Consider both incremental development ideas of existing services, but also new innovative ideas which could lead to new service concepts within your organization.
- Create a funnel for development ideas to see in which phase idea is – this is really important to manage the expectations – you don’t one anyone to start to sell something, when idea is still just an idea.
- Be willing to kill your darlings – one easily falls in love with the idea team has worked hard on – however, if you cannot find business case or strategy fit – idea should be killed or parked to be consider in the future.
New Service Development Portfolio
Within New Service Development Portfolio, we should see all service development initiatives, which are under development. There may be large development initiatives, such as development programs requiring work from many different teams and units, but also smaller incremental development activities to improve the existing services.
Good practices:
- Create transparency on service development activities. Projectize the service development, as you would do for new product development. In many organizations, service development is incremental and not fully visible in development portfolios. Projectized approach helps to create transparency within the organization on status and readiness of service development. If you develop services via continuous development teams, that is equally ok – create transparency via portfolio epics or other means.
- Also services require systematical productization and commercialization – in order to develop a scalable service, one needs to carefully understand customer value proposition, define the processes and way of working for the service, train the organization, and often also develop supporting IT tooling. Usually this is more work than anyone anticipated, when kick starting the project!
- New Service Development differs from the New product development – fine tune your service development process to enable iterative learning, customer engagement and flexibility in decision making. Read more here: Developing new products and services – are there differences?
- Don’t forget deployment – when you have invested so much on service development, make sure you pay enough attention on engaging the whole organization, so that the sales is capable to sell new services, delivery organizations knows how to manage delivery and commissioning and operations have smooth processes for running the services. Create feedback loops to improve the services based on the learnings!
- Check out also tips for go-to-market: 5 ways to improve go-to-market of new offering.
Customer offering portfolio
In customer offering portfolio, we may have a wide range of available offerings towards customers, depending on the size of your portfolio.
Here are few topics to consider for the existing offering portfolio:
- Creating clarity towards customers and sales on available offering is critical. There are many ways for creating the transparency, and sometimes also multiple viewpoints may be need. Read more of offering portfolio dimensions in a previous blog post: Ideas To Build Offering Portfolio – Which Offering Portfolio Dimensions Are Relevant For Your Organization?
- Do you have offerings you are still scaling up within the organization? Systematic post-launch follow up is absolutely critical. And not only to passively follow up, but gather feedback from customers, own organization, partners and competition to truly optimize your results.
- Can you create transparency on performance of the offering portfolio? Do you get easily numbers, or would you need to take some actions to improve the performance management across all offerings?
- Do you have retiring offerings in your portfolio? Make also bold decisions to retire offerings, which are not performing as expected or are replaced by a new offering. Maintaining too many services simultaneously requires a lot from the whole organization.
Do you manage a funnel or a tunnel?
One of my most read blog posts has been about managing the portfolio funnel (Do you manage a Portfolio funnel, or Portfolio tunnel?). The same principles apply to the service offering portfolio as for any other portfolio – it is important to look into the different phases of the portfolio funnel, prioritize and create transparency, and not to just focus on one specific part. For me this illustration has helped a lot when we have had a confusion offerings in different phases of the funnel:
As always, I hope this helps! And happy to hear your reflections, both if you agree or disagree on certain parts!
Strategic Portfolio Management 