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Everything-as-a-Service Creates Product Catalog Blues | Part 2

Embracing the inherent flexibility of services means using tools that are inherently flexible enough to do the job

In my last post, we learned that services are only like products if you are willing to oversimplify them. And if you oversimplify them, you can miss out on business opportunities.

Services (actions supported by things) differ in several important ways from products (things supported by actions). While product options are generally well defined up front by the manufacturer, customers for services want to mix and match pieces of different services and essentially create their own new service. The definition of the service can easily become fuzzier and fuzzier as you serve more customers. Customers know that customizing a mass-produced product is a challenge, but they think, surely it's easy to fine-tune a service. It doesn't come pre-formed in a box, after all.

Unlike products, services tend to be fuzzy around the edges, and they can be shape-shifters. The world of everything-as-a-service (XaaS) is going to enable a lot of shape-shifting through customization, bundling and mash-ups. Some service providers will embrace this, while others will struggle to keep up.

Embracing the inherent flexibility of services means using tools that are inherently flexible enough to do the job. Take the product catalog example. Do you handle services just like products, in an enterprise-resource-planning (ERP)-oriented way? Does your way of working demand that every service have a SKU or other unique identifier? Does every service option need a separate SKU? How do you handle one-off variants? Do those also need SKUs, or do they become out-of-catalog exceptions? Either way may cause a problem.

SKUs are fine, provided your products are in boxes. But services don't come in boxes. Already, some service providers find that the total number of basic services, including variants and options, exceeds the number of customers. This is not about to change. In fact, we can expect to see steady increases across the board in the number of basic services, service variants, options and bundles. The universe of possible services may be, in practice, almost infinite.

Numbers are cheap, but a traditional customer relationship management (CRM) or ERP-based approach that depends on SKUs will, eventually, become unmanageable. Sometime soon, product catalogs in their traditional SKU-based form will revert to being used only for products, which is what they were designed to do. Service providers who want to offer anything more complex will need something more flexible and scalable.

A good rule of thumb is if your service offering is such that you can't stick a barcode on it, then maybe using a SKU-based system is not a good idea.

What else is there? How can we manage this proliferation of service entities? How can we make this scalable? I don't think anyone has succeeded in adapting a traditional SKU-based system to be scalable and flexible enough to track the characteristics and pricing for a large and growing portfolio of dynamically created and adapted services.

Fortunately, at MetraTech we did not have to adapt a traditional product catalog. For our billing system, we designed an approach to products and services management from the ground up, on the assumption that whatever we might predict as the future for complex services, reality would turn out even more complex. By design, our approach to building the service portfolio is infinitely scalable with no constraints imposed by a pre-set numbering system. The rules for calculating prices can be as complex or as simple as needed, with a different formula for every customer, if needed. All services and service variants and options can be captured in the system, so nothing is off the record, but at the same time each service can be made available globally, just to specific customers or even just to one individual procurement person in one company. We know that services are not always going to be defined by human beings working in an office, so our architecture permits us to set up secure and controlled interactions with all types of Web-enabled applications. Call them agents if you like. In the frenetic new world of the Internet of Agents and XaaS, we're ready for business already.

More Stories By Esmeralda Swartz

Esmeralda Swartz is CMO of MetraTech. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda is responsible for go-to-market strategy and execution, product marketing, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. Esmeralda was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of OSS software, now part of Extreme Networks (Nasdaq:EXTR). At Avici Systems (Nasdaq:AVCI), Esmeralda was Vice President of Marketing for the networking pioneer from startup through its successful IPO. Early in her career, she was a Director at IDC, where she led the network consulting practice and worked with startup and leading software and hardware companies, and Wall Street clients on product and market strategies. Esmeralda holds a Bachelor of Science with a concentration in Marketing and International Business from Northeastern University.

You can view her other blogs at www.metratech.com/blog.

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