l DATA POINTS: WHY NEW SERVICES FAIL.

New Service Launches: What Went Wrong?

Percentage of Participants Operational Enhancement Professional

Services

Services Services Sales Force Slow to Get Behind Product 69 78

79 Limited Delivery Skills/Resources 62 67

64 Lack of Funds to Support Introduction 46 44

43 Product Specifications Not Right 23 22

14 Marketing Plan Not Right 15 11 7 Competitive Factors 15 0

7 Slow Ramp Up 15 22

36 Other 8

11 7

Note: Operational' services include product support services related to ongoing product use. `Enhancement' services include training and educational services that add value to product usage. `Professional' services include development and consulting services that create new value.

Source: ITSMA 1998 Best Practices Benchmarking Study

Services can be a lucrative business, but--like products--a good many newly- launched services crash and burn shortly after liftoff. The Information Technology Services Marketing Association (ITSMA) recently polled 36 companies with failed services to find out what went wrong. The surprising answer: Most failures were caused by internal snafus rather than marketplace rejection. Most commonly, the sales force was disinterested, service delivery was poor, or the launch was underfunded. ITSMA vice president Bob Johnson says the results reflect a common problem--too many employees feel they should have veto rights over new service initiatives. `I'd like to outlaw the word `buy-in,' he says. `Everybody thinks they have the right to throw rocks at what you're doing.'

Robert Johnson, vice president of advisory services, ITSMA, One Militia Dr., Lexington, Mass. 02421; 781/862-8500, ext. 17. E-mail: bjohnson@itsma.com.

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