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Achieving Profitability for PS in a SaaS Company

Amber Milks | Okta

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This is a very expensive meeting...

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Objectives

How to initiate conversations at the executive level to set expectations for PS

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Build Services offerings to meet market demands and satisfy your partner strategy

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Structure variable compensation plans & teams to both produce revenue and build happy teams

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Setting Up For Success

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It starts at the top…

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It starts at the top

  • What does the company want from the PS organization?
  • What leverage do you need to meet expectations?
  • Are there activities happening that are counter to your success?

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Executive Checklist

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Do we have a desired margin target?

What is more important, margin or top line growth?

Are there long term vs short term strategies to evaluate their impact on our goals?

How will we work with the Sales team to ensure alignment?

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So your CEO says ‘don’t lose me money’…

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What Do You Need From Sales?

  • The License Sales team needs to position the value of services
  • PS needs to own the services sales cycle and the conversation with the customer
  • Set expectations on profitability for services with the entire Sales org
  • The Services Sales team needs to own the conversation around scoping, pricing, etc to deliver value
  • Create swim lanes for AEs & SEMs

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But what about partners?

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Distinguish Your PS Partner Strategy

  • How ready is the partner ecosystem to deliver your product?
    • Technical expertise
    • Size maturity
    • Market interest
  • How much are you relying on partners to deliver your product success?
  • Are you subcontracting or going it alone?
  • Timing is everything

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A note on planning...

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Supply & Demand

  • Sales & Partner strategy will predict your Demand
  • Build your Supply (people) just in time to meet your demand
    • You can’t manufacture demand by overhiring resources
  • Plan for investment to support the Product

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Building Services Offerings

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Services Offerings are Products

  • What does your market demand?
  • How does your customer want to transact with you?
  • What are your partners already offering?
  • Stay focused on the Product

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Example Service Portfolio

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Post-Implementation Managed Services

New Product Implementation

Management Consulting

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Compensation

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Pillars of PS Compensation

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Revenue

Productivity

Transparency

Simplicity

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Example PS Compensation Plan

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Role

   Variable Compensation Components

Engagement Managers

  • 0.5% of Booking at the time of closure
  • 1% of PS Billings generated from bookings

Delivery Roles

  • 10% of Billable & Investment Hours

Project Managers

  • 2% of Portfolio Billings

Management

  • Profitability Pool paid quarterly

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Comp Plans Do Not Replace Good Management

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Takeaways

  • You need Executive buy in
  • Assess your Partner ecosystem
  • Build your services offerings like a Product company builds Products
  • Structure your comp plans for profitability and employee retention

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Thank you.

© Technology Services Industry Association

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© Technology Services Industry Association

Questions?

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Contact Information

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