Creating Solutions vs Products

Something I came up with when working on how to transform the company from one that builds products to one that sells solutions. Based on an interesting book "The Innovator's Dilemma" by Christensen.

View more presentations from Siddhesh Bhobe.

Products typically bundle a set of functionalities, are expected to work seamlessly in multiple installations with minimal customizations, and can typically be installed and configured by the customer himself. Products are packaged in a way that they can be marketed and sold by a sales team, and typically come with support and future roadmap by the company that built them.

Solutions have all the characteristics of a product. In addition, solutions are dynamic and very customer focused, and are managed through a continuous improvement cycle. A solutions manager needs to define and productize the offering and then deliver it through an ever changing combination of hardware, software and services.

Why Solutions?
1.Solutions provide much higher ROI through non-linear and recurring revenues compared to traditional T&M and FP models
2.Solutions help in building value-added partnerships with your customers, preventing commoditization
3.Solutions also create long term relationships with customer, allowing repeat business
4.Solutions, being so customer-focused and dynamic, differentiate you from competition and prevent a direct price comparison with you

There can be two kinds of solutions, based on whether we are focusing on the product aspects or the service aspects.

Service-centric
1.Here, the solution is based on our expertise in delivering projects in a specific technology area like analytics, data or application migration or security, and supported by multiple, integrated products and components through which this service is delivered efficiently
2.Typically need heavy involvement of professional services and onsite resources, which is a factor to bear in mind when pricing and delivering the offering
3.Solves a business-level problem, and is often customized for specific verticals. Hence, this service is typically sold to business stakeholders and not to IT
4.Could be product/platform specific or product/platform-agnostic
5.Tagline: “Here’s what we can DO for you”

Product-centric
1.The solution is based on a reusable component, framework, or product that can be customized/integrated through services
2.By virtue of being a product, it will typically be platform-specific, but the solution can be offered in multiple platforms
3.Sometimes, the solution might be specific for a partner, but involve multiple license sales to different customers of the partner
4.Like a product, the solution is expected to work in multiple installations, can be sold by sales team, will be supported by the company, and can typically be installed and configured by customer
5.Will involve some, but not much, deployment of professional services or onsite resources
6.Tagline: “Here’s what we can BUILD for you”

For more, wait for my whitepaper on the topic :)