Case Study No.

6 – GSV Software
[Discussed on 28th January, 2020 | LMTSM, Derabassi Campus]

Sara Sheppard, ITSMA, Europe

As a global software vendor with a well established range of desktop software products, GSV
Software had developed a largely channel centric model to meet its broad range of customer
technical services requirements. Service and support were allied to specific software products
and were delivered by third parties. GSV put most of its service and support efforts into selecting
the right intermediaries to deal directly with its user base, and also into providing any product
training required to ensure that the intermediaries were effective. The advantage of this approach
was that GSV had a limited number of support relationships to deal with.

This strategy to develop and support the channels to customers was supplemented by the
provision of a limited range of direct technical services targeted at large accounts or provided to
those few customers who wanted to come directly to the GSV for ‘paid for’ support at premium
rates. Individual customers normally dealt with GSV’s accredited agents or other partners such
as value added retailers (VARs) for service and support.

This model worked well: the software applications were relatively simple and there was very
little customisation or integration with other software products. However, as GSV’s target
market was moving towards ‘enterprise class software’, its service and support model needed to
be revisited. Its software offerings were moving from largely standalone products to being part
of a business solution, and enterprise class software implied significant amounts of customisation
for each client. As a consequence, the ultimate support accountability for the performance of the
solution, and type of technical support required, was becoming less clear.

In some cases a client would be acquired by one of GSV’s agents and not unreasonably would
expect a share of revenue. However, the support requirements for these ‘enterprise’ or bespoke
systems could not be fully anticipated at point of sale, though it was recognised that some
elements would be beyond the capability of GSV’s agent. This was not an issue that could be just
fixed behind the scenes as the possibility of ‘flip flop accountability’ (or nobody taking full
responsibility) was becoming a major purchasing concern for major customers. It needed to be
clearly articulated where responsibility lay, not least because these customers represented a
significant part of GSV’s business.

Customers were asking GSV to take ‘more skin in the game’. This is an American term that
means taking more business exposure themselves or shared risk – particularly in innovative
business solutions that were using leading-edge technology. At the same time the GSV knew that
its own business model, with a high commitment to continuing a channel-centric services model,
would not support a heavy investment in a direct services business. There needed to be a hybrid
model between a pure channel-based service and a direct-to-vendor model. It needed to be a way
that improved customer confidence in the more complex solutions world: allowing GSV to
encourage a healthy channel-orientated services business, and at the same time offering a way of
improving customer satisfaction, with the level of responsibility being taken by GSV.

One of the solutions has been with ‘leading edge solutions’ (which are seen to be breaking into
new markets): the software vendor will commit to either taking the lead in the solution
development or playing a significant role, alongside other channel partners. The role of the
vendor is to transfer its superior knowledge of its software product into the solution being
developed, and to pass this intellectual property on to the partners (which could also be the IT
development group within a customer). This defined role then changes once the solution moves
from the development and build stage to roll-out and management. The software vendor then
plays a more ‘behind the scenes’ role, providing a backup and escalation support route to the
chosen third-party IT service provider, with contractually agreed service level agreements.

The customer sees GSV software playing a key role in the solution development, and therefore
ensuring that the long-term supportability of the ultimate business solution is built into the
design. Once the solution moves into roll-out stage, an IT service provider is selected with the
appropriate competencies, but with a clear route back to the software vendor if required.

Questions

1. What are the implications for GSV in scaling this model to fit its large customer base?
2. What needs to be considered by the third-party IT service provider to ensure it can take
accountability for the front-line service to the customer?
3. What does GSV need to provide to the IT service provider to ensure that the ultimate
customer is satisfied with the service being provided?
4. How can GSV influence customer satisfaction with its software, and therefore its
reputation as a global software provider (recognizing that the important role of technical
support is being provided by a third party)?