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ing the creation of service offerings. The second section discusses the various
types of intellectual property and its protection once it has been created.



Service Line/Service Offering
Creation and Development
Each firm has differing needs both for the outcomes and associated processes
for new service creation. The level of process formalization is largely depend-
ent on the intended outcomes. In keeping with general management princi-
ples, large intended outcomes tend to require more formal processes. Process
formalization has two primary benefits. First, it is useful for helping ensure
successful outcomes. Second, formalization may be used as evidence to assert
the firm™s ownership rights over its intellectual property.
This section provides a discussion of several interrelated topics”benefits,
definitions, expectations, processes, and roles. Benefits associated with for-
mality in the service offering creation are presented followed by a distinc-
tion among three terms (service lines, service offerings, and capabilities).
Setting expectations for the firm™s service offering creation effort is then
discussed. Finally, a proposed process to support the creation of new service
offerings and the associated roles needed to support the creation process are
discussed.


Benefits
Focusing the firm™s attention and resources on the underlying development
process for the creation of new service offerings may provide some of the
following benefits:
148 The Front Office: Driving Sales and Growth

• Improves the likelihood of successfully launching new ideas
• Formalizes and rewards the generation of and competition between
new ideas
• Reduces wasteful spending on unprofitable ideas
• Improves time-to-market response for new ideas
• Integrates new idea generation with the firm™s financial targets
• Provides a differentiating advantage as a given services market be-
comes more crowded and thus more competitive


The Cost of Ignoring Service Offering Development

In addition to potentially foregoing the preceding benefits, the firm that
elects to underemphasize its service creation process may incur negative
consequences. The application of investment dollars toward new service
offerings, like all firm assets, can be an indication of a firm™s priorities,
values, and outlook for the future. Even those firms that do make signif-
icant investments toward new service offerings take a risk if a struc-
tured process is not utilized. Without a consistently understood and
applied process, the firm™s investment-allocation practices may be inter-
nally viewed as a form of selective favoritism between competing busi-
ness units.

Defining the Terms
One of the first issues with adopting any process is the difficulty in reaching
agreement on terminology. Though reaching this agreement may seem tedious
and somewhat unfulfilling, it is recommended that a firm endeavoring to for-
malize its new service creation process make the effort to agree on the mean-
ing of key terms. For purposes of this discussion, three terms are defined:

• Service line: A combination of multiple offerings to improve organiza-
tional efficiency in sales and delivery and demonstrate comprehensive-
ness of services to the marketplace.
• Service offering: The specific service that is marketed by the firm.
Generally, clients buy the firm™s services at this level.
• Capability: A skill possessed by individual members of the firm.
Clients may elect to engage the firm for individual capabilities, but
these resources tend to be viewed as staff augmentation.

In the context of these definitions, capabilities are combined with soft-
ware, knowledge repositories, and other elements to create service offerings,
and these service offerings are combined to create service lines.
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Service Line and Intellectual Property Creation

Setting Expectations
Before adopting a service creation process, the firm should endeavor to iden-
tify its goals for new service creation. Goal setting in the following areas will
increase shared perspectives among interested parties and help ensure
agreement on the desired end state:


• Level of desired (optimal) formalization such as investment perfor-
mance hurdles and management reviews
• Financial strategy (growth versus maintaining market share)
• Market positioning strategy (boutique/niche services versus all purpose)
• Organizational strategy (trendsetting versus following, first-in versus
reactive approach to service development)


In addition to goal setting, design considerations should be evaluated, for
example: (1) the preferred use of a dedicated lab for research and develop-
ment versus a field-based client-engagement approach, (2) the need for evo-
lution versus innovation of new services, (3) the firm™s ability to build versus
buy its position, (4) the balancing of the firm™s delivery structure with its
service creation process, and (5) whether local business unit discretionary
funding of a given idea is encouraged /permitted.


The Service Creation Process
Regardless of the level of formality introduced into the creative process,
four basic steps are involved: propose an idea, commit support, develop and
test the market, and launch and grow. Each of these steps is described here
followed by Key Deliverables and Key Questions for each step. In addition,
an itemized list of suggested work steps is provided on the accompanying
CD-ROM.

PROPOSE IDEA. The objective of this step is to encourage the firm to
seek market-oriented information to support its idea generation, surface the
largest number of ideas from across as many areas of the firm as possible,
and then identify and focus on those ideas with the most perceived potential.
An essential ingredient for choosing between two or more ideas is gathering
information that supports a comparison. Emphasis should be placed on three
elements of this step:

1. Using a standardized format to capture proposed ideas
2. Making the idea submission process as straightforward as possible
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3. Adjusting the idea selection criteria (including financial aspects and
strategic value) as the firm™s need for new service offerings changes

Key Deliverables
• Market information
• Ideas documented in a standardized and comparable format
• Work plan for commit support step

Key Questions
• What client need does the proposed service offering address?
• How does this offering meet the client need?
• What is the current status of the service offering? (Existing intellectual
property and client(s) versus green field)
• How well does this service offering idea match the firm™s current
capabilities?
• Does the firm need to acquire internally unavailable capabilities using
an alliance or through other means?

COMMIT SUPPORT. The objective of this step is to commit resources to
those ideas that are most likely to succeed. This step begins the conversion of
an idea to service offering and will likely be the most difficult to complete ad-
equately. Competing demands between (1) profit-seeking motives to show im-
mediate results and (2) the analyst™s tendency to remain in the research stage
indefinitely must be balanced. This is a challenge in professional services
firms that tend to emphasize current billability above investment. A real
commitment by the firm partnership or management, as well as a culture shift
toward investment in future services, will be required in such firms.
Although it often will prove difficult, it is essential that each proposed ser-
vice offering be detailed with a sufficient level of specification. This includes
elements such as individual skills and capabilities, knowledge repositories,
and support from software and hardware. Ideas that are elusive to sufficient
specification may entail risk that the firm is not willing to accept. Along with
each service offering™s proposed contents, a full understanding of the finan-
cial aspects (anticipated revenue, cost of service) and strategic benefit of the
envisioned service offering is needed to ensure that a comparative analysis is
possible.

Key Deliverables
• Service offering specifications
• Initial version of business plan with financial and strategic objectives
• Initial market research to support investment case
• Work plan for develop and test market step
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Service Line and Intellectual Property Creation

Key Questions
• How will competing offerings be evaluated and compared?
”Client value proposition
”Fit with existing”firm™s direction, offerings, sales, and delivery
channels
”Prospective market value (required investment)
”Perceived sustainability and expandability
• At what level in the firm should development of a given offering be
funded?
• How much of the service offering can be developed internally? What
elements of the service offering need to be acquired from outside
resources?

DEVELOP AND TEST MARKET. The objectives of this step are to develop
the service offering, perform trial engagements with receptive clients, and
determine whether rollout of the service offering is desirable. A develop-
ment team is organized and is tasked with building the service offering
based on the specifications created during the previous step. Depending on
the complexity of and cost associated with developing the envisioned service
offering, it may be desirable to create a prototype. The completed service of-
fering is then test-delivered to a trial client under the auspices of a trial en-
gagement. Trial clients should be chosen carefully. Selection criteria should
include the client™s willingness to participate in and provide support for the
firm™s efforts. Trial clients should also be willing to provide feedback and
ideally possess size, industry, and other attributes that are ref lective of the
intended market. Client feedback serves two purposes. First, it provides
input about weaknesses in the proposed service offering that can be cor-
rected. Second, feedback provides the basis for documenting prospective
clients™ business benefits. Multiple trial engagements may be used to provide
useful input such as the realized benefits and associated monetary value of
the service offering, sales and marketing requirements for the next step of
rollout, and the amount of training and type of support needed to deliver the
service offering.

Key Deliverables
• Service offering solution or reasonable facsimile via prototype
• Completed trial engagements
• Client feedback
• Financial and other considerations for rollout
• Sales and marketing materials
• Work plan for launch and grow step
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Key Questions
• What level of completion is required for the proposed service offering
so that a target client can effectively evaluate it?
• What criteria should be used for target client selection? How will
prospective clients be approached?
• What is this service offering™s value proposition for prospective clients?
Why should a client buy this service? Who in the client™s organization
will likely make the buying decision?
• How will the firm ensure that the client™s expectations are met?
• How much and what type of sales and marketing material and support
will this service offering require?
• What will be the attributes of a typical client engagement (duration,
staffing, revenue)?

LAUNCH AND GROW. The objective of this step is to begin sales and de-
livery of the service offering to the market. Early client engagements should
be viewed as extensions of the trials conducted in the previous step with
client feedback actively pursued and acted on. As sales and delivery are op-
timized, engagement profitability receives added emphasis and attention.
Long-term plans, including enhancement objectives, sales and marketing ap-
proaches, and ongoing management structure and responsibility, are devel-
oped for service offerings that attain projected growth and profitability
targets.

Key Deliverables
• Service offering refinement
• Various plans and deliverables to support marketing, sales, delivery, and
training
• Transition of service delivery responsibilities to designated unit

Key Questions
• What steps are needed to ensure adequate deployment of the service
offering?
• Are elements of the service offering suitable for intellectual property
protection?


Roles to Support the Process
As the firm defines and adjusts its process for new service creation, it is es-
sential to clearly delineate roles. Regardless of the level of formality intro-
duced, accommodation for sponsor and director roles is recommended. The
sponsor role is tasked with establishing the firm™s strategy for developing
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Service Line and Intellectual Property Creation

new service offerings, laying a foundation with clearly defined responsibili-
ties, providing oversight, and allocating resources. The director role as-
sumes responsibility for the effective execution of the service creation
process and oversees financial accountability. In addition to these roles, de-
pending on the formality of the process, provision should be made for men-
toring, coaching, and marketing support for those individuals tasked with
new service development along with resources to enable the associated de-
velopment effort.


Intellectual Capital/Property
Development and Protection
As service lines and offerings are created, it is inevitable that intellectual
property will be developed. Once developed, each firm should evaluate
whether this property needs to be protected by addressing one key question:
Does this property warrant the effort required to protect it, or does change
occur so rapidly that the need to protect is ameliorated? This section pro-
vides a synopsis of other authors™ insights into the fundamental elements of

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