Service contracts are a critical part of the OEM sales process, but all too often, they are not given the attention they deserve. This can lead to missed opportunities and lower revenue. In this blog post, we will discuss how you can maximize revenue with effective OEM service contract management.
As IT solutions for customers continue to proliferate (cloud, mobility, big data analytics), so does the management of their information technology assets. And as the number of installed solutions rises, so does the demands of customer service teams. When it comes to service agreements—maintenance contracts, support agreements, and service level agreements—customers are looking for more than just the best price and reasonability. To truly differentiate themselves, IT solution providers must deliver a streamlined renewal process.
What's causing this?
IT asset management (ITAM) is an evolving market, with few standards and multiple vendors. This is coupled with a growing number of solutions being offered to customers. Currently, the industry is seeing a departure from hardware and data center type assets to cloud-based software and subscriptions. These technologies quickly increase the complexity of a customer’s network.
What does the ideal ITAM solution look like?
Solutions range from custom deployments to turnkey off-the-shelf packages that provide basic inventory and configuration data, up to full-service suites including IT asset renewal dashboards. Providers can differentiate themselves by offering enhanced services based on their understanding of their customers' needs.
It has an actionable dashboard.
Providers need to manage these assets in a way that is easy for customers to understand and that allows team members to fulfill customer requests on demand. The uptick in installed assets increases support requirements, and it becomes imperative to have a solution that manages all the various systems from a single interface.
It is a proactive service.
IT asset and annuity management solutions are strategically positioned to capitalize on the opportunity lifecycle and deliver greater value beyond their technology solutions.
Keep in mind that the delivery of an IT solution represents only 40-60% of the total potential value. Effectively managing customers renewal portfolio and capitalizing on the post-delivery renewal transactions allows sales executives to recognize 100% of the true opportunity value.
These services can include everything from automating maintenance renewals, identifying customer needs, and managing upgrade rights. Avoid unforeseen expenses and help uncover new opportunities, keeping customers happy along the way.
A solution utilizing ITAM can help providers identify which customers are primed for a sale, so they can proactively capture renewals. Customers value proactive engagement from their vendors, which is critical since up-front costs for initial asset acquisition are high.
It is mutually transparent.
As each customer's IT environment changes, a comprehensive view of that environment is necessary. ITAM solutions can provide optimal visibility into the customer's technology environment, allowing providers to recognize what changes need to be made and when the best time to execute is. For example, if a system is failing or the end-of-service-life (EOSL) nears, this information would be visible in the asset management solution. The visibility incites action allowing solution providers to make proactive recommendations and capitalize on the opportunity to sell a profitable replacement.
It has a built-in workflow for annuity revenue.
Using a single view of customer assets simplifies the sales process and makes it easier to identify up-sell opportunities and cross-sell. For example, if customers have licenses that are about to expire or hardware nearing EOSL, the ITAM solution will make this information available to sales and service managers who can offer to renew or offer upgrades to new models. This not only benefits customers but can reduce costs for providers because it creates a self-service opportunity for customers to manage their own software renewals.
This leads to opportunities to uncover other customer challenges, which can then be addressed with complementary services that will increase mutual trust and satisfaction.
It benefits the entire organization.
ITAM allows solution providers to provide comprehensive yield management services, an area of growing importance in the technology industry. By increasing visibility over customers' assets, providers can proactively monitor asset value. This allows customers to plan upgrades and purchases at optimal times in order to avoid costly excess inventories or the need for additional financing. Individuals won’t miss the value in staying in the good grace of their accounting department and CFO.
It is manufacturer-agnostic.
The ideal ITAM solution manages all assets across multiple vendors to provide a complete view of future revenue that is based on customer contracts with their solution provider or integrator. Data is entitled and normalized regardless of how many manufacturers and distributors’ hands have touched it.
How do I employ an ideal ITAM solution?
Solution providers who combine their technology expertise with effective business acumen reap the benefits of this growing market opportunity. In sum, ITAM solutions provide proactive revenue management that increase customer retention and intimacy. ServTrax offers a comprehensive suite of IT asset and annuity management solutions that will help providers realize the full revenue potential provided by their technology relationship with customers.