For well over a decade, TSIA has been helping our members improve and optimize their Professional Services organizations. In this time, we’ve noticed one persistent consistent obstacle: a lack of alignment. Misalignment can come in many forms, but it is a pervasive and harmful problem.

That’s why we’ve devoted countless hours to create aids, frameworks, and thought leadership to help our Professional Services members gain and maintain alignment. In this post, I’m going to share how you can tell if your Professional Services organization is suffering from misalignment and provide some ways to get started in fixing the problem.

Telltale Signs Your Professional Services Organization is Misaligned

Does your Professional Services organization (PSO) currently experience any of these issues?

• Difficulty developing a clear strategy
• Can’t get budget for the investments you need
• Supply and demand are way out of whack
• No clear financial targets
• Crazy financial targets you can’t meet
• Sales is frustrated that teams take too long to assemble
• Professional Services thinks Sales discounts too much
• You can’t seem to make stakeholders happy no matter what you do

If you’re dealing with any one, but especially a combination of any of these issues, you almost certainly have an alignment problem. The good news is, it’s fixable! But it can be difficult, and isn’t a one-time event but an ongoing process. Here are some recommendations for how you should get started in this alignment process, which begins with understanding what alignment actually means.

Aligning Your Professional Services Organization

Organizational alignment refers to two parts of the same whole: vertical and horizontal alignment.

Vertical Alignment

Vertical alignment refers to alignment between the Professional Services organization and PS leadership and company stakeholders, ensuring that both the company objectives and those of Professional Services are consistent with one another. The key question to ask here is, “Does the Professional Services charter align with company objectives?”

Vertical Alignment Challenges

• There’s a disconnect between Product and Services
• Differing levels/types of services requirement
• Many and varied stakeholders
• Generally poor understanding of Services in the tech world
• Shifting tectonic plates at the industry level (TSIA talks about this with technology industry transformation. The ball is moving, and the goalposts are shifting all across the industry)

Horizontal Alignment

This refers to alignment within the Professional Services function itself. Once you’ve received a clear direction/charter from company stakeholders, Professional Services needs to then align to follow it. Identifying your charter, or priorities, absolutely needs to be the starting point of any alignment strategy, both vertically and horizontally. Since everything else flows from this strategy, it’s important that all stakeholders agree on a charter before setting financial expectations and planning how to meet those financial expectations. Is your function performing in the best possible way to operate on its clearly defined charter?

Horizontal Alignment Challenges

• Pervasiveness of vertical misalignment
• Increasingly complex global practices
• Many professional services stakeholders with different interests
• Rapidly shifting concept of the customer journey
• Rapidly shifting role of Professional Services in the customer journey

For your Professional Services organization to successfully achieve its goals, you need to be both vertically and horizontally aligned. Think about it in terms of the oft-used metaphor about being in a boat and rowing in the same direction. If you’re aligned vertically but not horizontally, it’s the same as rowing poorly, but in the right direction. If you’re aligned horizontally but not vertically, it’s like you’re rowing well in the wrong direction. Here’s a summary of the recipe for successful alignment:

• Get corporate Professional Services alignment
• Define a Professional Services charter to execute against company goals
• Define a Professional Services strategy, operating model, financial model to best fulfill the vertically aligned charter

Simple right? Although simple doesn’t always equal easy, you can start using these 3 steps.

Step 1: Vertical Alignment Check

Here’s an example of a very simple schema that you can use to drive the conversation within your company regarding vertical and horizontal alignment. As you look at the chart, can you identify what your current status is? Is it the Wild West where you have no agreement on anything, or are you at the Nirvana stage where there’s a clear stacking of hands?

‍

Or realistically, are you somewhere in between? If so, you’re not alone. When TSIA conducts benchmarking with our Professional Services members, we find that most professional services organizations score a 2. This basically means that there’s a high level of agreement that professional services is most likely a valuable asset, or should be, or could be, but that’s all. Scoring a 2 is very common, and I will tell you up front that it’s very hard to get to a 4 or 5, but it’s not hard to achieve a score of 3, or “better alignment.”

Step 2: Systematic Charter Exercise

We have some tools available to help you identify your charter, some of which are built into our benchmarking assessment option that comes with membership in TSIA’s Professional Services research practice. We recommend that you take a look at the 4 main Professional Services charter elements, or reasons a tech company would want to maintain a Professional Services function, and stack rank them in order of importance for your company:

• Professional Services Revenue: View of Professional Services as primarily an additional source of top-line revenue
• Professional Services Profitability: View of Professional Services as primarily an additional source of profit margin to supplement product margin and margins from other activities
• Adoption: View of Professional Services as primarily a vehicle to enable and improve the technology adoption of existing customers
• Customer Acquisition: View of Professional Services as primarily a vehicle for expanding product sales

I can tell you from lots of personal experience in doing workshops with members on this topic that forcing people to stack rank these four things and drive that discussion is a really healthy exercise. Once you do that, the next thing you do is plot your responses like this:

This is an example of a result we see when we ask companies, “What’s the most important thing your Professional Services capability is in business to do?” and the response is product adoption being the top priority with driving customer acquisition coming in second. By creating this visualization for your team, you can have a more productive conversation about what it is that you’re in business to do.

Step 3: Let the Charter Be Your Guide

Once you define your Professional Services strategy and operating model (or even portfolio), and the financial model to best fulfill the vertically aligned professional services charter, everything should flow from that strategy. But, that is often easier said than done. As mentioned before, this needs to be viewed as an ongoing process, not one single event. Here’s an example of what alignment might look like at a high level:

Charter: Stakeholders across all functions agree that they want your charter to be about prioritizing professional services profitability. You need a margin gap, the company needs a margin gap filler, and professional services can do that, which is why margin needs to be driven with professional services profitability.

Strategy: From a strategic standpoint, you should focus on current high-margin offers, perhaps even make investments in markets with low commoditization because there are opportunities for premium pricing in those areas.

Financial Model: If you focus on profitability, you should also be scrutinizing field and delivery costs, as well as minimizing redundancies, increasing utilization, minimizing sales costs.

Org/Operating Model In addition to reducing field redundancy, you could also centralize your delivery pool or even shift more delivery to offshore resources (because they tend to be less expensive).

Pricing Model You will need to focus on premium pricing and formalizing process to minimize discounting.

It’s also important that you go into this process with eyes wide open on the impact that each of these steps are having on your other objectives. To reiterate, here’s a summary of how you can get this process rolling:

• Rank your professional services charter statements in terms of their importance to your business
• Ensure alignment with overall company objectives
• Based on this ranking, summarize the charter of the professional services function
• Define strategy, financial model, organization model, and other priorities based on this ranking

‍