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Digg It - Five Strategies for Profitable Services Growth
In today’s era of Professional and IT Services competition and consolidation, some small to medium-sized companies are proudly delivering 20%-50% annual growth.
Unfortunately, the vast majority of firms have experienced two consecutive years of fee erosion, commoditization, client defecti
Unfortunately, the vast majority of firms have experienced two consecutive years of fee erosion, commoditization, client defecti
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
on, and company identity crises. We set out to discover where the growth opportunities exist in today’s economy, and to share our findings.
The Study
Our ten-month study uncovered the major gaps between the top performing and bottom performing companies. Our interviews with 53 CEOs acr
The Study
Our ten-month study uncovered the major gaps between the top performing and bottom performing companies. Our interviews with 53 CEOs acr
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ss North America were designed to help leaders in this industry achieve three goals:
1. Identify the most common barriers to company expansion;
2. Learn what investments will positively affect their 2004-2005 growth;
3. Compare their operating model and areas of focus against their peer
1. Identify the most common barriers to company expansion;
2. Learn what investments will positively affect their 2004-2005 growth;
3. Compare their operating model and areas of focus against their peer
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
s.
We spoke with companies across six major sectors of the IT and Services market, including hardware and software support, business and process consultants, IT outsourcing firms, integrators, and BPO’s (business process outsourcing). BPOs had, by far, the most rapid growth rates of any
We spoke with companies across six major sectors of the IT and Services market, including hardware and software support, business and process consultants, IT outsourcing firms, integrators, and BPO’s (business process outsourcing). BPOs had, by far, the most rapid growth rates of any
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
ther sector.
More than three-fourths of our interviews focused on understanding the dynamics within the small to medium sized organizations (50-500 employees).
We compared and integrated our findings with IT research firms and trade groups. These included ITSMA, AFSMI, Gartner Group, Cu
More than three-fourths of our interviews focused on understanding the dynamics within the small to medium sized organizations (50-500 employees).
We compared and integrated our findings with IT research firms and trade groups. These included ITSMA, AFSMI, Gartner Group, Cu
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
lpepper and Associates, and the New Client Marketing Institute.
The Top Frustrations—and Hype
When we spoke with CEO’s, three common frustrations surfaced:
· “Our target market does not understand what we do.” (1/3 of respondents)
· Today’s economic downturn is creating fewer inbound l
The Top Frustrations—and Hype
When we spoke with CEO’s, three common frustrations surfaced:
· “Our target market does not understand what we do.” (1/3 of respondents)
· Today’s economic downturn is creating fewer inbound l
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ads and longer sales cycles. Several CEO’s in the bottom performing category mentioned that their companies are experiencing 18-24 month selling cycles.
· Profitability is eroding due to the commoditization of IT services. Although we asked whether they attributed the erosion to offshor
· Profitability is eroding due to the commoditization of IT services. Although we asked whether they attributed the erosion to offshor
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
e development, only two respondents concurred.
In spite of the media focus on outsourcing, only two of the CEOs we interviewed mentioned concern with offshore development. We also learned that only 7% of all outsourcing revenues are generated by offshore firms, according to Joe Blumberg,
In spite of the media focus on outsourcing, only two of the CEOs we interviewed mentioned concern with offshore development. We also learned that only 7% of all outsourcing revenues are generated by offshore firms, according to Joe Blumberg,
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
CEO of Specifics Inc. (www.specifics.com). As of this writing, we can infer that offshore development may be worth watching, is more hype than a present threat to successful services firms.
The Impact
From a marketing awareness standpoint, we found that the 80/20 rule applies. IBM Glo
The Impact
From a marketing awareness standpoint, we found that the 80/20 rule applies. IBM Glo
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
bal Services has become the “Kleenex brand” in IT Services. ITSMA’s most recent branding study claims that IBM GS now has a threefold brand equity lead over other firms. This makes it increasingly more critical for small to medium sized firms to create and communicate unique positioning
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
statements.
We also learned that the companies who designed their business around a time and materials model are experiencing the greatest profit erosion. The time and materials- based firms told us that billing rates have declined by 15%-20%. Companies who position themselves as proble
We also learned that the companies who designed their business around a time and materials model are experiencing the greatest profit erosion. The time and materials- based firms told us that billing rates have declined by 15%-20%. Companies who position themselves as proble
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
m-solvers, trusted advisors or BPOs did not report any concern with their profitability.
Four of the key areas where bottom performers struggled included market positioning, staff attrition, long sales cycles, and poor self-management. CEOs with flat or declining revenues consistently ex
Four of the key areas where bottom performers struggled included market positioning, staff attrition, long sales cycles, and poor self-management. CEOs with flat or declining revenues consistently ex
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ressed concern with balancing their own personal and professional lives.
The Top Performers’ Five Common Strategies
How can you best capitalize on the lessons we learned from the successful companies? First, consider how to invest your 2005 budget. The top performers who participated i
The Top Performers’ Five Common Strategies
How can you best capitalize on the lessons we learned from the successful companies? First, consider how to invest your 2005 budget. The top performers who participated i
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
n our study typically invest at least 2%- 3% of gross revenues in five areas:
· Attracting, hiring, and retaining great people. These companies ensure that leadership development and self-management are part of the fabric of their company.
· Positioning their company clearly within a sp
· Attracting, hiring, and retaining great people. These companies ensure that leadership development and self-management are part of the fabric of their company.
· Positioning their company clearly within a sp
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
cific, well-defined niche
· Creating a lead generation machine, and experimenting with new lead generation approaches. One company sponsors small-scale CIO breakfasts with great success and has scaled back on printing brochures.
· Creating a world-class sales process and scalable sales
· Creating a lead generation machine, and experimenting with new lead generation approaches. One company sponsors small-scale CIO breakfasts with great success and has scaled back on printing brochures.
· Creating a world-class sales process and scalable sales
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
“machine.” Top performing CEO’s knew they were on the right path when they found themselves less involved in closing sales, and more time using their CRM automation tools to coach team members from the sidelines.
· Invest in client account management models. One of our participants saw
· Invest in client account management models. One of our participants saw
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
heir services revenue from Microsoft grow from $2M to $11M within two years and attribute their success to their commitment to formal account planning.
Scott Testa, CEO of MindBridge in Norristown, PA, has the commitment to building a winning team. “We have become part of the ‘200 rule’
Scott Testa, CEO of MindBridge in Norristown, PA, has the commitment to building a winning team. “We have become part of the ‘200 rule’
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
with CIOs. On the average, CIOs receive 200 email, direct mail and phone messages each day.” He continues, “This is the time to grow and invest in sales and hiring—when we come out of this economy, we can turn on the light bulb again.”
We also learned that the bottom performing compani
We also learned that the bottom performing compani
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
s are over-investing in three areas:
· Replacing sales and marketing talent due to high attrition
· Software and hardware training for their technical staff
· Participation in technology trade groups (e.g. Java and Internet standards)
You don’t need to be an IT Services firm to learn f
· Replacing sales and marketing talent due to high attrition
· Software and hardware training for their technical staff
· Participation in technology trade groups (e.g. Java and Internet standards)
You don’t need to be an IT Services firm to learn f
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
rom these secrets. In light of these findings, ask yourself these questions. Is your company ready to be a “top performer” in 2005? What initiatives will your company be willing to let go? How will you surround yourself, and your key executive team, with a top performer operating model
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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