Focus Is Critical to Solution ProvidersBy Channel Insider Staff | Posted 2005-10-18 Email Print
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Opinion: It takes discipline to be a focused company and may even involve turning down projects, but focus is a good thing.Personal effectiveness experts such as Robbins, Covey and Peters have made careers out of helping professionals achieve a sense of personal focus. Unfortunately, there is little in the literature concerning business focus.
Focus for both professionals and businesses, including solution providers, is the art of identifying what is important and directing the majority of your effort to attaining it.
While this ensures that you will concentrate on high-value activities, at least for professionals, it can also lead to a kind of myopia, causing missed opportunities in the dogged pursuit of predefined goals.
Can a business become myopic and limit its potential opportunities for expansion and revenue growth?
Is there a downside to business focus? I reasoned that, if it were possible for a business to be too focused, that would be a greater problem for service-oriented businesses than other kinds of business.
To explore this, I talked with two executives from highly focused service providers: Rick Hayes, president and CEO of Ingenuity Inc., and Stuart Itkin, vice president of marketing at Kronos Inc.
The strengths and weaknesses.
Ingenuity helps its corporate, governmental and educational clients optimize telecommunications, utilities and information technology--all areas that experience extensive budget creep if not monitored and contained.
Kronos is a workforce management solutions firm that uses Web-based software to support all of the components of workforce management, from the hiring process to performance reviews, employee development and goals metric definitions.
Young: Why did your firm specialize rather than develop a broad services offering?
Hayes: Ingenuity does provide a broad service offering, with everything we do focused on helping our customers optimize their telecommunications, utilities and information technology. We provide everything from process evaluation and contract negotiation to ongoing expense management and new technology implementation. After everything has been optimized, we continue to support our customers with ongoing expense management programs that include invoice reviews and audits for service level compliance. With our industry experts, advanced technology enablers, and knowledge of customers' environments, we are able to help customers make sure they continue to minimize their costs, while operating as efficiently as possible.
Itkin: Kronos has the broadest service offering in the workforce management arena. We believe employees are the greatest assets of a firm. In a global economy, where employees can work virtual for most any company, supporting and taking care of this asset is crucial to the ongoing success of the firm. The demand for quality employees is not limited to the high-technology industry. There is a strong demand across all vertical markets to find and retain quality talent.
Young: How would you compare your pricing models to other companies that offer a broad range of services including some similar to yours?
Hayes: Ingenuity usually offers its optimization services on a contingency-basis. This means there is no risk for our customers to bring us in to see how much we can help. Since we only get paid based on the savings we generate, we don't get paid until we help our customers save money. We extend our shared-savings approach to other technology projects within an account that helps customers optimize their processes and take better advantage of technology. Since our customers don't always have the budget to complete these kinds of projects, we will complete them for a small additional percentage of what we saved them on their telecommunications, utilities, or IT expenses. If we don't save them any money on the additional projects, we don't get paid for them either.
Itkin: Kronos' pricing and billing models are flexible, supporting the most common ways our clients prefer to operate. Some of our clients are most comfortable licensing our software, others prefer to rent it. Some clients like to operate on a per-drink model, yet others take advantage of our suite of tools under the software-as-a-utility model. Kronos prefers to spend its time emphasizing the depth and breadth of our workforce management suite, not explaining a billing model. We'll offer our solutions in the manners our customers generally prefer.
Young: Have you considered broadening your service offerings beyond your areas of specialization? Why?
Hayes: Ingenuity is always considering opportunities to expand our services, but we believe that everything we do has to fit together well. We evaluate new opportunities on whether they would provide intelligent growth for Ingenuity and keep us focused on our core objective to help customers optimize their organizations and minimize their costs.
Itkin: Kronos' business is workforce management. Any expanded services are directly related to our core expertise. We have developed specialization within several vertical markets incorporating specific skill sets necessary for an employee to be successful. It is best for Kronos' growth, stakeholders and customer satisfaction to stay focused on its core business.
Young: Has your specialization limited your growth in any way?
Hayes: Ingenuity's specialization in optimization has allowed us to grow, but our philosophy has also limited our growth in some ways. Even if we see a great opportunity, we will not add a new line of business or open a new location until we have the necessary experts who share our focus on delivery and customer satisfaction. We could add people and projects at a much faster pace, but we do not believe that this would be in our customers' or the company's best long-term interests.
Itkin: Kronos' workforce management specialization has not limited growth, but instead has boosted its growth. We are a publicly traded company with operations in North America, Mexico, Great Britain, and Australia. We support companies of all sizes including small-to-medium businesses and 70 of the Fortune 100.
Points to keep in mind.
If your firm is seeking to be a highly focused, crème-de-la-crème service provider, here are a few points to keep in mind:
Based on these interviews, being a focused service provider should not be a limitation.
Ingenuity and Kronos have clearly articulated their value proposition. By aiming to be the best in class of their market, they have developed reputations as the go-to firm for solid process execution while experiencing no limitations.
A focused company develops a depth of expertise not readily available through broad, sweeping service providers.
Martha Young is co-founder of Nova Amber LLC, a business-consulting firm based in Golden, Colo. She co-authored "The Case for Virtual Business Processes," published by Cisco Press. She has extensive global expertise in the outsourcing and managed services arena. Young can be reached at email@example.com, or (303) 642-0941.