Mastering A Winning Service Portfolio – Part 2

In part 1 of my blog, mastering a winning service portfolio, I shared about how do you determine your target market. In Part 2, I would like to talk about the next 2 variables of a winning service portfolio which are Service Offerings and Channels.

Service Offerings                                                                                                                           

When attempting to define what services your company should focus on.  It is wise, to start with a generic service stack which typically comprises of maintenance & support services, integration services, consulting and managed services.

From these broad services , you should work in tandem with your management to further define which are the specific service offerings which are critical to your business.  The following define a step by step approach to create a first cut service portfolio:

Step 1:  Take Stock of Your Current Services

Take a hard look what are the services which are now offered by the company. Don`t just scan at your corporate overall portfolio but the ones that  are offered in your backyard. Many a times, many companies have one hundred and one services listed on their global corporate websites, but what are feasible and deployable in terms of skill set  capabilities, regulatory requirement and legal and geographical restriction  usually tell a different story.

Step 2: Inventory Your Wish List

Regularly communicate with your management to fine tune which type of services that the organisation believe must be offered to be successful in the target markets. Reason being that  your service portfolio strategy must in the end aligned back to your overall corporate strategy to be effective and efficient from the grand scheme of things.

Step 3: Forecasting

Forecasting  revenue potential of service offerings has always been a dicey business. You will be challenged numerous times on the confidence of the forecasted revenue numbers.  Fortunately, you could leverage on the below data points to you help to remove most of the ambiguity and provide a more realistic forecast numbers that stand up to scrutiny.

a)      Market Data – Sources from commissioned market studies, Gartner, IDC etc

b)      Install Data – Sources from existing customer database, historical numbers

c)       Deal Data  – Sources from project review reports, Customer SAT surveys

Step 4 – Validation

Coming up with the concepts is the easy part, making sure that it stick in the marketplace is the hard part.  Target services must be validated against the actual needs of the target market.  It is your onus to make sure that the service portfolio being developed is relevant to the marketplace.

As part of the service development process, you must studiously  gather empirical data of service performance, responsiveness of customer support, effectiveness of media campaign and financial performance of the new service to perform the validation step.


Channel represents the final parameter to be considered in the services portfolio strategy. Now that we have define the target markets and target service offerings, the last piece of the puzzle is to determine which channels should we leverage to drive our target service offerings to the target markets.

Channel options 

When selling services, there are multitude of channels to choose from.  Bearing in mind, that different channels do come with different amount of investment in terms of real money, resources and time to make it effective. This is another topic of channel management that I would  address in my future blogs. In this section, I will only list those channels that are relevant to a service company discarding the typical telesales, internet, distributor, value add reseller that are critical channels for a product company.

a)      Direct – The direct service sales force or an overlay sales force

b)      Value add Partners – A value added partner that bundle their products and your services to go to market.

 Channel Mix                                                                                                                                                 

To determine which channel mix is optimal for your business in order to meet your financial objectives is crucial.  For a services companies, the options are usually limited to the above 2 whereas a product company could leverage on much more channels such as distributors, value added resellers etc.


To create a winning service portfolio strategy, we should have a clear understanding of what drive the service revenues.  I have discussed on the 3 variables that are paramount to achieve this :

Market  – What markets will your service business be asked to pursue? Existing base? New vertical markets? Bear in mind that the further your service portfolio strays from existing markets of the company, the more investment will be required. This will translate into slower revenue ramp up in the beginning of your financial quarter.

Service Offerings – Once we have determined which markets we will be pursuing. In tandem, we should have already selected the target service offerings that are in tune with the demands of the target market.

Channels – Finally, with the target markets and target services defined, you must make sure there are  sales channel to reach the target customers.

By assigning real dollar values to the target mixes in all these three areas, we will be able to get a realistic market-mix picture. This will tell us if there are any deficiencies in opportunity or sales reach.  By making sure there are enough well-defined opportunities to support the revenue objectives of the services business,  the chances for success is increased which in turns making sure that your revenue targets are met and better still , outperformed!