My First PS Village Boston Executive Breakfast

I had a chance to attend my first PSVillage Boston Executive breakfast last week. This session, so I have been told, is the groups fifth session since its inception. Approximately 25 directors and VPs of PS from the Boston area attended.

I have to admit, I wasn't sure of what to expect. I hoped that a lot of smart PS managers would attend and that we'd have a lot of dynamic discussions. Frankly, though, I have been to other sessions like these that turned out to be more like sales and marketing pitches than discussion groups and netowrking sessions. So I was very please to find that the session was what I hoped it would be.

The agenda called for discussions of two topics: SaaS and Agile Development Models. As a whole, SaaS was the topic most top of mind for the group. Some of the participants were, like me, individuals managing a SaaS-based PSO, while others managed Enterprise-based PSOs in companies moving to (or adding) a SaaS model.

As I conduct my research pertaining to the similarities and differences of Saas-based PSOs versus non-SaaS-based PSO, the one consistent theme that I encounter is that everyone is struggling with the same questions. This is true of my fellow PS Village members as well as the many non-PS Village members with whom I have talked as part of my research. The big questions we struggle with are:

1. How do we measure our success and contribution to our customers and company?
2. How do we deliver services to customers who need them while remaining small in the eyes of executive management?
3. How do we scale our practice profitably, and what role can contractors and partners play?
4. How do we address revenue recognition concerns?
5. How do we support the custom applications we build for our customers when we do not have the "service desk" type people and systems needed? What role can the service desk play?

As I said, the Boston PS Village session was attended by managers of SaaS businesses and non-SaaS business alike. The five questions listed above were asked as often and as loudly by the non-SaaS managers as they were by the SaaS managers. In a nutshell, we are all asking the same questions. However, the answers aren't always the same. For instance, enterprise software companies expect that the PSO revenue will be much smaller than product revenue (30% of the total revenues, for instance). This allows those managers a much greater ability to grow the practice and service more customers than those of us who are managing PSOs within a SaaS company, where non-recurring revenue (i.e., PS revenue) is expected to be between 3-10% of total revenues.

Additionally, while both groups (SaaS and non-SaaS) seem to rely heavily on the traditional, operational metrics (see previous posts), the SaaS managers seem more inclined to believe that those metrics provide limited insight into the success of the practice from a corporate-contribution and customer-value perspective. Revenue growth, profit margin, and utilization still seems to be where it's at for non-SaaS companies, while SaaS-based PSO are questioning the value of those metrics for much other than capacity planning and resourcing.

I look forward to more discussions with the members of PS Village and other PSO managers.