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February 1, 2003

Success Through Service

Vendors need to understand how their technologies can address a vertical industry's specific service needs

by Barry Grushkin

Continued from Page 1

Thinking in terms of the services and subservices that a technology can address has many advantages. This approach is the service equivalent of interchangeable parts. The idea of component-based methods for business service modeling and deployment belongs to Neil Wasserman at Adaptive Service Engineering. His idea for planning service delivery can be illustrated, for example, by an analogy with PC manufacturing.

A PC needs RAM, disk drives, and so forth. RAM can be supplied by any number of sources. If you have a technology that delivers RAM capabilities, perhaps better, cheaper, or faster than the competition, you can plug it into a wide range of machines sold to a wide range of manufacturers. Similarly, if you can identify services or subservices (that your technology can generate) that you can plug into a wide range of service solution needs, you gain great flexibility and adaptability in addressing new markets. You also then know which potential partners you should be talking to.

As an example, I've written many times about decision algorithms. These powerful but complex mathematical algorithms have widely diverse applications: Remote sensing, image tracking, customer purchase prediction, product pricing optimization, financial market prediction, search engine improvement, and face, voice, or handwriting identification are just a few examples.

But all too often creators of strong, new approaches to decision algorithms — in spite of their wide applicability — end up with a business model that's little more than specialized niche consulting. An alternative approach to a business plan is to list the capabilities these technologies can enable and then list the many complete services they can help round out.

As an example, if you choose just one capability of these algorithms such as voice identification, you can find many potential service opportunities for it, in the same way a new type of RAM can be a part of many types of computers and computing systems.

A voice identification algorithm combined with the necessary sensing pieces can be used to confirm a user's identity. This subservice can contribute to a wide array of service solutions in which ID confirmation has value, such as corporate proprietary information access; secured building access; phone, credit card, or other billing fraud detection; caller identification; and so forth. By thinking about your technology in terms of the multipurpose building blocks of service capabilities, you can produce a business road map for turning technological value into actual revenue that's highly adaptive to changing market conditions and new business opportunities. (Figure 1 summarizes these issues.)

The Market Attack Strategy

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After you know the markets you can approach, the next step is to choose specific vertical industry problems and create sample solutions that work with the language, metadata, and approach of that given industry. You need to work with people in or close to that industry so that your product package looks like a turnkey solution that addresses a well-understood need or an easy-to-conceptualize management improvement. People working on day-to-day operations expect you to be the visionary.

In order to build a solid strategy, your solution must complement the technology and the company that makes it. The objective is a business plan in which a reasonable part of the value you add to the client's success returns as revenue to your company. With these combined assessments, you're ready to create your market attack strategy.

Barry Grushkin [blg23@cornell.edu] is CTO of the Machine Intelligence Co., which implements and analyzes vertical solutions and technologies in CRM, business process optimization, and knowledge management using next-generation approaches. Machine Intelligence Co. also advises BI startups as to how their technologies can be part of innovative business solutions.

RESOURCES

Adaptive Service Engineering: www.adaptiveservices.com