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RAGS SRINIVASAN
BUILDING TEAMS,
PRODUCTS AND
BUSINESS
Copyright © 2015 info@iterativepath.com
ADOPTING BUSINESS MODEL
INNO...
Rags Srinivasan Leading Product Strategy
Executive Summary
Urgency
Customers and
Competition is
changing – need
new Busine...
Rags Srinivasan Leading Product Strategy
Why Change is Needed
Trends at Work
• Customers want alignment of their costs wit...
Rags Srinivasan Leading Product Strategy
What Needs to Change
Implementation
• Touches every part of the organization – Pr...
Rags Srinivasan Leading Product Strategy
Traditional Vendors are Moving to
Subscription Model
100% growth in subscription ...
Rags Srinivasan Leading Product Strategy
Subscription Increases Total Value Pie
for All
Total Value
Customers: Affordabili...
Rags Srinivasan Leading Product Strategy
It is Already Here …
It's a subscription
economy, and you're just
living in it
Rags Srinivasan Leading Product Strategy
But It Poses Significant Challenges
People Process Systems
CultureMetrics Uncerta...
Rags Srinivasan Leading Product Strategy
Specifically Calling out People and
Systems
• Sales team compensation model
requi...
Rags Srinivasan Leading Product Strategy
What Businesses Say on
Challenges
Our processes were set up to support selling in...
Rags Srinivasan Leading Product Strategy
Why Business Model Innovations Fail or
Succeed
• Fitting the model to preserve cu...
Rags Srinivasan Leading Product Strategy
Approaches to Driving Change
Finance Model
• Leverage partners to carry financing...
Rags Srinivasan Leading Product Strategy
How Finance Model Will Work
Sales
- Partner may not
be involved
Quote Fulfillment...
Rags Srinivasan Leading Product Strategy
How Incubator Model will Work
Product Sales
FinanceSupport
• Product only transac...
Rags Srinivasan Leading Product Strategy
Comparison of Implementations
Finance Model Incubator
Model
Minimal change Broad ...
Rags Srinivasan Leading Product Strategy
Comparison of Benefits
Finance Model Incubator Model
Org Learning Experience None...
Rags Srinivasan Leading Product Strategy
What is Needed for Incubator to
Work
Communication • Extensive and repeated, acro...
Rags Srinivasan Leading Product Strategy
Recommendation
1. If the priority is – Customer experience, Growth,
Disruption an...
Rags Srinivasan Leading Product Strategy
Select Articles and Links
1. Active Archive Pitch at NAB Show
https://www.youtube...
Prochain SlideShare
Chargement dans…5
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Biz model adoption_v2

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Publié le

Adopting new business model in an established enterprise.
It is a subscription world. Businesses have a need to align their value share model with customers' value realization. Changes are not easy, it touches almost every part of the organization.
What are the benefits?
What are the challenges?
Where the options?

Publié dans : Business
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Biz model adoption_v2

  1. 1. RAGS SRINIVASAN BUILDING TEAMS, PRODUCTS AND BUSINESS Copyright © 2015 info@iterativepath.com ADOPTING BUSINESS MODEL INNOVATION
  2. 2. Rags Srinivasan Leading Product Strategy Executive Summary Urgency Customers and Competition is changing – need new Business Model changes What Propose subscription model Benefits are high but poses challenges Recommendat ion Discuss two options, compare and recommend one
  3. 3. Rags Srinivasan Leading Product Strategy Why Change is Needed Trends at Work • Customers want alignment of their costs with revenue • Consumerization of enterprises – On demand everything • Born in the cloud companies moving ahead of incumbents Imperatives • Business model is value creation and value capture • Both need to be aligned for a growth business • In new markets there is misalignment of value capture with value created Implications • Risk being left out of customer consideration set • Failure to capture new markets • Facing disruption to core business
  4. 4. Rags Srinivasan Leading Product Strategy What Needs to Change Implementation • Touches every part of the organization – Products, Sales, Marketing, Finance, Accounting, Compliance, HR • Touches every system – Quote to Cash to Reporting Innovation • Subscription model • Perfect alignment of value capture with value creation • It is already happening everywhere Benefits • Attach to a growing customer meter drives revenue growth • More predictable smooth revenue curve for the Street • Paradoxically keeps customers longer despite pay-as-you-go
  5. 5. Rags Srinivasan Leading Product Strategy Traditional Vendors are Moving to Subscription Model 100% growth in subscription revenue while core business shrinking Completed transition started in 2011to subscription model – posting double digit revenue gains Seeing revenue growth only with subscription mode while traditional business is slowing
  6. 6. Rags Srinivasan Leading Product Strategy Subscription Increases Total Value Pie for All Total Value Customers: Affordability Business: Increased TAM Customers: Faster refresh cycles Business: Faster innovations Customers: Aligned with costs Business: Predictable growth
  7. 7. Rags Srinivasan Leading Product Strategy It is Already Here … It's a subscription economy, and you're just living in it
  8. 8. Rags Srinivasan Leading Product Strategy But It Poses Significant Challenges People Process Systems CultureMetrics Uncertainty Almost everyone is impacted Traditional workflow and process not setup for new model Every data, every system needs overhaul How and what is measured and reported is different Norms and values – Especially for Sales team What else is lurking around the corner?
  9. 9. Rags Srinivasan Leading Product Strategy Specifically Calling out People and Systems • Sales team compensation model requires adaptation • Finance team needs to get comfortable with gross margin and Rev-Rec changes • Product team get ready for continuous delivery • Support team adapt to a more self service model • Sales quoting process changes from MSRP, EA to simpler model • Finance systems need to support deferred revenue and the rest • Product SKUs must become ridiculously simple to transact and renew • Support needs knowledgebase and community platforms
  10. 10. Rags Srinivasan Leading Product Strategy What Businesses Say on Challenges Our processes were set up to support selling instruments. Mark Field CTO LifeTech it’s important to set up an infrastructure in the beginning that can manage the complexity and evolve Ron Gill, CFO NetSuite We set sales quota and compensation based on unit sales, how do I do that now? Unnamed Executive, Redacted Company Name
  11. 11. Rags Srinivasan Leading Product Strategy Why Business Model Innovations Fail or Succeed • Fitting the model to preserve current gross margins • Not recognizing customer alternatives • Not experimenting enough • Led by individuals • Start with customer value – focus on driving growth • Understand customer alternatives • Willing to fail and adapt • People first
  12. 12. Rags Srinivasan Leading Product Strategy Approaches to Driving Change Finance Model • Leverage partners to carry financing (e.g., Apple) - Inorganic • Customers get affordability and subscription model • Business as usual for all transactions • No product, process and people changes Limited Incubator • Scope precisely for specific set of NEW products • Start with separation of sales, systems and processes - Inorganic • Bring ownership across multiple stakeholders • Integrate with rest of system and org
  13. 13. Rags Srinivasan Leading Product Strategy How Finance Model Will Work Sales - Partner may not be involved Quote Fulfillment - Partner carries in books - May add finance charges - Delivers and collects BusinessPartner - Sales team hunts and moves deal to quote - Aligned with customer processes - Standard quote - Partner treated as end customer - Immediate Rev Rec Comp - No impact to partner - No changes
  14. 14. Rags Srinivasan Leading Product Strategy How Incubator Model will Work Product Sales FinanceSupport • Product only transacted as subscription • Positioned against similar competition vs. core products • Sales team measured on number of subscriptions • Compensated on 3y term • Leverage subscription platform like Zuora – avoid internal system changes • Report as “Other” until traction • Support included with subscription • Leverage ServiceCloud
  15. 15. Rags Srinivasan Leading Product Strategy Comparison of Implementations Finance Model Incubator Model Minimal change Broad impact Minimal change Scoped change No changes External systems No changes Limited change No changes Needs nurturing Customer impact Predictable change People Process System Metrics Culture Uncertaint y
  16. 16. Rags Srinivasan Leading Product Strategy Comparison of Benefits Finance Model Incubator Model Org Learning Experience None Tremendous opportunity to lean, pivot and optimize Customers Miss out on customer experience End to end seamless frictionless customer experience Sales Team Performance No impact Sets them up to compete in the subscription world Growth Marginal impact on growth Significant upside to align with growth metric and scale Innovation Financial innovation End to end innovation
  17. 17. Rags Srinivasan Leading Product Strategy What is Needed for Incubator to Work Communication • Extensive and repeated, across the org on WHYs Ownership • Specific function leads own their part of transformation • Not the sole ownership of BU Incentives • Shared goal and alignment of incentives of non-sales functions Faster Pace • Be ready to make decisions with limited data and pivot when needed • A culture adapted to accept pivots and not punish failures
  18. 18. Rags Srinivasan Leading Product Strategy Recommendation 1. If the priority is – Customer experience, Growth, Disruption and Transformation • Incubator Model 2. If the priority is – Limited change, risk aversion, time to market, reduce uncertainty • Finance model
  19. 19. Rags Srinivasan Leading Product Strategy Select Articles and Links 1. Active Archive Pitch at NAB Show https://www.youtube.com/watch?v=KSnfM2_o5Mc 2. Product Management Principles https://goo.gl/FtzexP 3. Infographic on Converged Infrastructure for Cloud https://goo.gl/mh4IgW 4. LinkedIn http://www.linkedin.com/in/ragsvasan 5. Product Strategy Blog http://iterativepath.wordpress.com

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