How to succeed with Cloud Computing
There is a difference between selling a software product and a providing a software service. When a product fails, it stops working and customer can show it to developer. What happens when a services fails? How do you know that it fails? In software as a services (SaaS) or Cloud Computing, this happens all the time. For example, a customer calls and says "Your software is not working". The service manager may not know what the customer means. Did the software not work properly? Is it crashes? Or it could mean the customer have an outdated computer systems or different configuration settings that are causing the error? What do you think will happen if service manager tells the customer that the company has tested their software and everything work fine. Whatever happen is customer's fault? What do you think the customer will think about the service of the company? Whose fault is it? What will happen next? There are thousands of such scenarios that can make providing a software service extremely difficult.
Many Cloud Computing companies put a lot of efforts in its work but not much in the interactions with customers. Many customer find it hard to reach the people they need. Many service managers are too busy with daily activities and not responsive to answer customers' requests. If the company gets a reputation for not having good service, it will be harder to get new business. How many service company understand that instead of focusing on capabilities, they must focus on its service reputation. Even if the company are successful in sign up customers but if they are not careful about customer services then it would not last long in this competitive market. That is why having skilled service managers to work with customers is essential but many companies do not understand it. Most companies know how to build software products but do NOT understand how to provide software services. Some assign product managers to service managers without any trainings. A person trained and have experience in develop software may not do well in providing services since the skill and mind set are very different. Many executives assume that since a person know something about software, he can do service too. This is a fatal mistake and it may cost the company the business. On the contrary, if a company known not only for good works, but also has responsible service managers who are pleasant to talk to and work with. They will build a reputation and a solid base of customers. Not only do they get frequent referrals, they can get more business easily, because they already have the reference and reputation. To succeed in Cloud Computing a company must analyze and improving the service to customers because customers' satisfaction is priority number one.
The key problem in providing software service is companies are often unaware of the service problems. Many are under the illusion that their service is good enough. Few executives understand that customer satisfaction is the only rule in this service business. Customers never tolerate bad service. It is very easy for them to switch service company if they are not happy of what they have received. This is different from software product as there is no choice. Customer must accept what product they get because there are only few to chose. They can chose Window or Unix; they may chose Microsoft or Google, they may select Oracle or IBM but that is all they have. However, in services they have many choices. They can decide which service company or internet service provider to hire because there are many of them. Today with powerful internet technology, customers can select company from another cities or in another countries. Many Cloud Computing companies are now expanding their service globally so the competition is already available all over the world. What I have seen is many small to mid-size local service companies struggle to maintain adequate levels of service. They do not have the skills, they do not understand the business so they rarely give intensive thought into how they can improve services. The owners are often too busy to build the company, hire people, set up infrastructures, buy more servers and usually do not pay attention to service. That is why over 90% of them failed in the first year. They do NOT know that to succeed in Cloud Computing they must focus on services, understand service management, having skilled service managers, and achieve customer satisfaction.
In services industry, the company is NOT selling the products. Customers cannot tell you whether Microsoft is better than Google or IBM is better than Oracle. Basically they do not care, all they want is something that they can use. That is why they hire service company. So the only thing to sell them is a relationship. Executive must know that if you are selling a service, you are selling a relationship. When a customer hires your company for a service it is usually because they do not have the expertise to do it themselves. However, they can see the work you have done for others. They might fear that they would not get the same quality for their project, or that they could not afford the level of quality they might see in your service offering. They might fear that they will not get the best service manager assigned to their project. So to succeed in Cloud Computing is to focus on the customer, provide them the best services possible, and have the best service managers assigned to them, of course to start the company must have skilled service managers available.
This is where many executive failed to understand the important of services. Basically, customers do not care how your company develop software. The hard work that your company does is invisible to them but the only thing they care is everything that your company provides to them must work smoothly and meet their demand. It may seem unfair, but hours of hard work in coding, testing will never make up for one incident of failure, or make customer feel unhappy. If a customer does not feel like they are being listened to, or the company are not working hard enough to meet their needs, they will switch to another service company. I have seen many service companies executives complain that customers do not know how to recognize their capabilities or how hard they work. They must realize that selling a service is really selling a relationship, and relationships are based on building trust. How can you trust a company that fail you? How can you trust a company that do not listen to you? How could they do business with a company that make them unhappy? If an executive do not understand relationship, they should never get into service business. If manager is not properly trained in providing service, he should never allow to manage services.
Basically, there are three phases of a service industry. First, is creates a service that the market needs. Second is improves the service to meet what the market wants and expand it to have more customers. This is usually the time where most service companies assume they have reached the goal. But the best companies move beyond phase two, they create services that would never even occur to a customer to ask for. They create "the best possible service." Because effective is never effective enough; quality is never good enough; performance is never fast enough so instead of meeting customer needs they exceed it. This kind of service cannot be created by asking the question "what do customer's want?" but rather "what would they love to achieve?" and “What can we make them better, more efficient and increase their business and profit to higher level?” To answer this question require service company to keep improving because the best service managers never think their service is good enough when they provide what customers want. In this highly competitive world, every company need to make it better. There is always room for improvement. They can always make their service better than anybody and that is why the skilled service management will be the most sought after people today and in the future.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
