Episode 19: Managing Risk and Enhancing Operational Efficiency in Services

Introductions

00:07
Hello everyone, and welcome to the Services Ops Podcast, the best podcast dedicated to the people, processes, and technologies dedicated to what it means to running a really good services business. We’re happy to be joining you again after our past scary Halloween episode of Spooky Services Stories, and we’ve got two really great guests with us here today. One, you met before, CRO of Provus Technologies, Warren Bernstein. Warren, how are you doing today? I’m doing great, glad to be here and looking forward to our conversation with Laurie.

00:38
Ah, awesome. And a really, really special guest. You know, we talk about people, process and technology of services operations all the time. While we have the embodiment of that here with us today, a really, really great guest, Laurie Hoffer, Senior Director of Professional Services, Global Strategy and Operations at Splunk, a Cisco company. Laurie, thank you so much for joining us today. Thanks. I’m happy to be here. Of course, of course. So what’s really exciting about Laurie is her perspective on services operations.

01:13
She’s in it, she’s in the middle of it every single day. And at scale, something that if you’re not already there, you aspire to be. So I’m excited for a conversation with Laurie. But before we kind of get into the theme of what we’re talking about, Laurie, let’s talk. Just give us a little bit about your background, and what your role is. Sure. Yeah. I didn’t start in a software services capacity or even in a software company. My career actually started in the finance arena in technology. And I was lucky enough to find a software that I was really passionate about and ended up working for that company.

01:52
So I have been in the services org for the most part, for my 10 and a half year tenure with the company now. And I joke that I’ve done really every role in that org. So I’ve kind of seen all the different sides of how the business is delivered and operated. And I’ve seen a lot of growth, obviously, over the last decade. So I think it gives me a really good perspective. Yeah, yeah, absolutely. And as you know, an operations professional in your role today, sort of what’s, what’s the mandate you operate with? What do you, what do you go into work with every single day saying, this is what I need to, this is my mission?

02:33
Yeah, that’s an easy one for me, and I think it has been my mission in previous roles, and more importantly in this one. And I view my job as mitigating risk. Whether that’s risk in revenue, whether that’s contractual risk, whether it’s risk of capacity planning, really just any risk that we’re gonna have, trying to look six miles down the road and see, you know, what’s coming and what do we need to prepare for so that we can be successful in those oncoming quarters. Yeah, I think that’s super interesting. Mitigating risk, right? Your job is to see around corners and you probably have many, many more corners to look around in the majority of your organization, I would think.

03:16
Can you describe a little bit about how you prioritize the risk that you’re going after, right? Because you probably have lots of stakeholders Yeah. You deal with, so maybe describe some of the stakeholders you work with and how you prioritize what mitigating risk means. Yeah, I think like anyone in any role or in any operations capacity can attest to some of that prior prioritization gets decided for me. So you know, there’s things that have deadlines and that you’re working in tandem with other organizations. And then there are things that we have decided are the most important and try to fit those around.

03:56
But it is really a juggling act of deciding which things to work on and getting input from the business and from all the stakeholders on what is the most important. And if other organizations are dependencies, who has the ability to help you execute. You know, it’s interesting Laurie, I really appreciate your background coming from finance because one of the things that we’ve seen at Provus recently is that more and more finance organizations are part of the decision around how to move forward with their services quoting processes. And what we’re seeing is that the finance team is often the first to recognize the gaps between a financial plan, a sales forecast, and that which is delivered by the delivery team.

04:45
And those gaps just start permeating through the business in terms of the business not being able to be agile, make quick decisions, make the right decisions long term for the organization. I’m curious, as you walk through that, especially with your finance background, do you see that coming to fruition even within Splunk? Definitely I’m exposed to what you’re speaking to. And those are conversations I have daily, weekly, with our financial finance organization to ensure that we are all on the same page, we are setting the right expectations and adjusting those expectations based on risks and things that we see going on. That’s super interesting.

Tips to be an effective communicator and strategic partner

05:30
So for our audience, right. I’m gonna jump in, we’re gonna pull out some tips from Laurie here. So as you’re communicating, these risks with finance or whomever, like what are some of the tactics or strategies you might use, some of the language you might use, and what are some of the, the risk points that you’re gonna say, “Hey, finance here, is why we’re having this conversation. Here is why you’re adjusting the plan. Or here’s where the risk is.” Maybe we should, yeah. It’s like how do you communicate, you know, the things that aren’t communicated down to you? How do you communicate things up to sort of be that really strategic partner?

06:15
Yeah. I think the worst financial miss or misalignment is a surprise one. So making sure that we are communicating early and managing those expectations. You know, good news is best delivered swiftly, or good news is best delivered swiftly and bad news is also best delivered swiftly. It does not get better with age. So as you can imagine, and I’m sure you know, in any sort of delivery capacity, there are a litany of things that can affect any of the expected outcomes. One that I find very common over the past few years as we’ve been coming out of the pandemic and doing more in-person meetings that we’ve seen, we will typically bring a large number of people together for training or some sort of yearly meeting.

07:09
And then we will see a fall off of delivery because everyone got sick because they were all together and there is, you know, a flu rips through the delivery field or COVID or something. So there is, you know, a pretty standard trend of large mart, multi-thousand person meetings and a follow on sickness, and obviously not just services to anybody that was at those meetings. So that’s a really common one for us, where people are just taken out of the field. There can be any sort of, you know, account based changes, delays in booking deals, things that like mergers and acquisitions, partner acquisitions, a lot of things that can affect the delivery out in the field that we just have to be very open about those expectations and when those changes happen.

08:06
Yeah, I like that. I mean, some very material risks that you just talked about, right? Some of those, those, those business risks that just come in and yeah. Like throwing things off. But what a, I don’t wanna say it’s funny, but what a fascinating data point where you’re like, Hey, delivery drops off after we don’t see each other in person. I mean, and another one that was really common last year is the impending government shutdowns where if we know something’s gonna happen or a natural disaster is a good example. Those we may see coming, we sort of brace for if we’re going to see a drop off in delivery that you really don’t have any control over those types of things. Yeah.

08:48
Yeah and I think that’s super interesting, like, as an operations professional, right? You’re talking about how you deal with your risk. And I think, you know, we have people, processes, and technologies, and I know we like to focus a lot on, you know, what you can control, right? The technologies and the processes you put in place, and then there’s those things you can’t control if everybody gets sick. Everybody gets sick if the government’s gonna shut down, can’t shut down. So how do you put yourself in a position where you can at least have the data and at least be ready to know that something could happen? Let’s be prepared for it.

09:22
What do you do as an operational or from an operational perspective to have that insight, to have that data. Just keep a close eye on it and try to quantify what the potential impact would be and to be really clear when we’re managing those expectations, I think that’s really the best that we can do. And look at anything, if there is something that we can do to mitigate, let’s say it’s a natural disaster that we’re preparing for, are there resources and other areas that may not be affected that we could switch to? Is there something else that we could do to mitigate, to solve that issue?

10:01
That’s really just creative problem solving in a way. Yeah do you see a gap existing, Laurie, between the data that exists within the sales process and the delivery process? In other words, how are you getting that data to know that there are gaps between what’s being sold and what’s actually being delivered? So one of the things that we’ve heard quite a bit is that our sales forecast may not actually equal what we produce as actuals when we’re actually delivering the services. And often each of those functions are islands of automation, if you will, to themselves. And so I’m curious, from an operations perspective, how do you bring that data together and are you actually going and bringing it together in a real time manner?

10:54
Or is it an after the fact reporting approach and then you’re trying to make predictions based on that? Yeah, so we do predict off backlog and actuals. So we’ve got an idea of where we’re going to be, but obviously we can’t deliver services on something that was never sold. So we do make adjustments. We have educated guesses and use prior year plans to make those guesses of where we’re going to be. And those are also hinged to those sales targets as well. But we can only deliver what was sold, obviously. Well, and the reason I ask that, it’s very interesting. We’ve been talking more and more with our customers about a connected services quoting strategy.

11:39
And that strategy of connected is where we see a lot of the operational inefficiencies bubbling up, because as I said, we’ve got these different islands of automation, but bringing all that information to one place to then be able to make those adjustments when there’s a natural disaster or an impending event, it seems to be the challenge for many organizations. Yeah. And I think it’s also exacerbated by scale as well. So in areas where there is more coverage and there isn’t as many layers of scale where your customer base that you are assigned to work with is much smaller and you are much closer to all of that it seems like there’s a lot less surprises than if you have a very scaled coverage model and that’s globally for us.

Insight on what good scale looks like

12:33
There’s some areas that we just have a much larger scale than others. And we may be closer to what really is expected and can plan better in the areas we have more coverage. Yep. Makes sense. I think that’s a nice little tease into what something else we wanna talk about today, is scale, right? So you recently just got off a world tour, visiting lots of different locations. I’d love it if you can share some insights that you have about what good scale looks like, right?

13:15
People process, and technologies, of a big scaled organization, and what are you seeing from a consistency standpoint, from an operations standpoint. Like what did you learn on this tour and how are you gonna sort of approach your process using new technologies after what you’ve discovered? Yeah. So the tour itself did give me a lot of time to sync with folks that I sync with every day in our global leadership and managing our global business. A lot more face time. That was fantastic. I do come from a technical background. So a lot of the time spent together was a very technical nature with a lot of our delivery consultants out in the field.

14:01
So it was very interesting to see the differences of, sort of the aftermath of how information is disseminated globally and maybe things that I thought that were common knowledge globally going into these other theaters maybe weren’t as common of knowledge and access to things that we maybe take for granted. You know, we are a US North American based company, things that we take for granted, time zone availability of services and departments and different organizations, other areas don’t have that. So until you are having a conversation about that and really realizing how that impacts them in their day-to-day job, I think it’s sometimes easier to forget some of those things.

14:53
And just having that reminder and doing sort of that world tour is a way to keep it top of mind and say, well, we have to make sure that we’ve planned for this and maybe update some of our communication tactics or how we are standardizing across the globe with different things. Yeah, the standardization, right? Any operational professional just wants standards across the board no matter what’s going on. Right. Predictability is paramount. There’s a good takeaway there, Warren, just the idea like, don’t assume everybody’s on the same page, right. Especially as you scale and get larger.

15:35
Warren, you’ve got experience in global massive companies, one, namely IBM. What are some of the things that the IBM team would do to, you know, do their best to make sure there’s consistency even across different regions or different knowledge sets? Make sure everybody’s just working from the same playbook. Yeah. You know, we used to often talk about glocal, right? You do global plays and then you localize them in a region. I think what I’m seeing changing over my career at IBM and now here at Provus is taking these, whether they’re back to my islands, whether they’re regional islands or whether the department islands within an organization.

16:22
Back to my connected strategy is how can I, back to Laurie, your discussion about your interactions with the finance community on a regular basis to make sure there’s no surprises is how can we put guardrails not to impede people from being innovative and making decisions locally, but how can we put guardrails in place so that as a CFO of an organization, I’m not surprised by something that’s done in a local region or our local business unit. And so, I think if you’ve always gonna need that global approach with local nuances, but I think where we can put guardrails that don’t impede innovation and productivity, it gives us, as an organization a lot more comfort in what the future’s going to bring and how we can help affect that.

17:12
I don’t know, Laurie, if that seems true from your perspective. It absolutely does and I love that term, glocal. Going back to people, process and technology, I think the processes and the underlying data, as long as we are trying to do things as much in the same form and format everywhere in the ways we’re reporting, and obviously there are going to be nuances in every different market. And there’s nuances just in how different people work and approach their job. But if there’s a process in place and we’re supposed to all follow the same process, we should be measuring everything in that same way. At least that’s the goal, as close to the pin as we can get.

Challenges of analyzing and collecting the right data

17:59
Absolutely. Yeah. What the challenge of managing all that data, I’m sure is top of mind every single day, right? How are you making sure you’re collecting the right data, organizing it in the right ways, analyzing it in the right ways? What are some approaches you’re taking now that might be different from what you do in a couple years, or a couple years in the past when it comes to identifying the right KPIs and the meaningful data points? A really great example. It seems like you’re really great at collecting and, and understanding your data just by, Hey, we all got in person and there’s a drop off.

18:36
Like that’s a very granular data point, but then there’s also just the big things. How do you sift through what matters? Well, data is what we do. So we’re starting from a pretty good point there. Knowing the different systems and how to cross reference the different pieces of data against each other to give you insights when maybe a data point you’re looking for, isn’t there. That’s some of what we try to do when possible, look for additional data points that we can gather. There’s a dance of asking for the information that you need and not asking for too much, that it’s a completely onerous process. And also designing so that you are getting the right data.

19:24
And there isn’t a workaround or even a race condition. There’s something that we designed in our system that I helped design years ago, and we didn’t realize at the time we implemented it that it wouldn’t always trigger just based on the race condition of when certain things happened in the sales cycle versus our cycle. And there was an aha moment a few years later when we realized, “oh, here’s why we’re missing half of that data.” So hiccups like that and learning from those mistakes, I think helps you think more about how to design things going forward and the ways your data collection could fail.

20:09
Yeah. You know, it’s interesting as you talk through that, Laurie, I was sitting here thinking to myself about, you know, the comment, and I think you kind of hit this earlier about controlling what you can control and managing that which you can’t control. And when I think about it in the services space, you know, what can I control? Well, those guardrails I talked about within my organization, I can put guardrails to manage around rogue discounting, around scope creep. There are things I can do that are in my control. There are other things, uncertainties that I’ve gotta manage. And to manage those, I really need to leverage that real time data.

20:48
I have to have it accessible so that I can manage things as they happen, right? And so I see that balance in my mind that the service organization that is gonna succeed is gonna control what they can control, but be constantly pulling feedback IE data and being able to then manage that which they can’t control. Yeah, I think that’s a great point. One of the things we do more and more is we’re constantly looking for outliers where you may ignore a trigger in the data or you’re not looking at a certain data point because that’s expected. There are things that you know, automatically happen and you expect a certain outcome.

21:30
But there are outliers that maybe you’re not paying attention to that we really just need to inspect. So it’s really important to pay a really close attention to all of that. Yeah and yeah, I think we’re all seeing everybody talk about AI and everything that it can do for you. And spotting outliers right? Is a big potential value proposition for aid. So do you have some form of strategy where you’re laying on AI analysis on top of all the data you’re gathering to help, you know, bring out those meaningful outliers in real time? Yeah, absolutely.

22:11
I think a precursor to employing any of that is ensuring that your processes are documented and in place and your controls are in place, so you know what an outlier is and what it looks like. For sure. And I think everyone can agree there’s always an exception. So, I don’t care how many rules you have, there’s gonna be an exception. There’s gonna be an outlier. We just put a new rule into place, like just very recently, and the first thing that used this applied rule was an exception. So, you know, it takes no time at all.

22:49
It’s interesting as you say that, Laurie, because I was thinking one of the questions I was gonna ask you next was, as you think about that, what you can control and that which you can manage, right? Controls are putting the right processes in place that you just spoke about. Yeah. You know, if you had a bucket, would you error more on the manage side, which is leveraging the data and whatnot. But what I heard you say is, sure, I need to manage that data. I need to know when there’s those outliers. But if I don’t have the processes in place and I don’t have the controls in place then I’m never gonna get that information.

23:23
So I don’t mean it’s not a chicken and egg because I do need to put controls in place, but then I need to acquire that data to then be able to make the right decisions going forward. That’s at least what I took away from what you said, if that’s correct. Yeah and I think that really brings it all together. Like I said, my role is risk mitigation and, you know, we want to have consistency and controls and manage our data. And then on the flip side, as we talked about, make sure that any changes to that we are being very clear on our expectations and how we’re measured and how we might need to change those based on any of that changing. But really we, we are a customer success organization. We are here, in my role, for the success of the customer and to help for the success of the sales organization.

24:16
So we need to be nimble when something is outside of our desire of how we expect to manage our different points that we’re measured on. If we need to adjust that, then we’re gonna be able to explain that and adjust. And that may, it might just be the right thing that we have to do for the best of the customer and sales and for the company. Yeah it’s interesting Chris, you know, we were just talking recently with a group of folks and Laurie, it’s spot on. We were talking about managing risk and we were talking about within the services portfolio, service organizations by managing risk, can ensure profitability, can maintain a competitive advantage, can achieve sustainable growth.

25:06
But once you stop managing that risk or knowing what that risk is, that all falls apart, that the building blocks just start crumbling beneath you. So I appreciate you coming back to risk. because it’s something Chris and I have been talking to a lot of folks about. Again, you’ve got to manage and control that, which you can. And it’s risk. We don’t want the misses to be our fault. If we have to adjust for something we have all decided as a company is better and that changes the finish line and the target, that’s fine. But we don’t want to have any mistakes because we weren’t paying attention or, you know, weren’t measuring things correctly or weren’t following the process. I like that. It’s a very healthy approach to risk. One that probably also helps people sleep better, right. When you know, when you know you’re not making the mistakes and things happen, that you’re able to handle.

Key Takeaways

26:04
Yeah, well great. Hey, this has been absolutely wonderful. We’ve already gone through an entire episode. And so Laurie, I just wanna say thank you so much. One thing, the way we like to wrap these up is give one, maybe two like concrete takeaways, for our audience based off of our conversation. So I’ll go ahead and start. And I’ll start where we just, just ended up, you know, being able to manage that risk sounds super important. And how do you do that? How do you manage that risk? One, you call Laurie and ask, or two, I think Laurie’s gonna say, make sure your controls are in place, that you’re collecting data in a way that you’re going to have as few outliers as possible, right?

26:55
And that’s gonna be your starting point for being able to view and monitor everything. You’re gonna be able to view and monitor that everybody gets sick after they get home and after they see each other in person. You’re gonna be able to view and monitor who’s available should a natural disaster disrupt a delivery team’s ability to deliver because you’ve got those controls in place for your data. So managing risk is wildly important and data is a foundation of that. Is that fair? Yeah, I agree with that. Awesome. Any takeaways for our audience, Laurie? Any advice?

27:29
Yeah, I think you hit the nail on the head. Be nimble, pay attention to your risk measurements, but you also need to be nimble and be able to take inputs from really all sides. The other thing, just as I know in an operations position, things just move really, really quickly and there’s a lot of reaction. One piece of advice I would have is, you know, make sure you are cataloging your wins, writing those down because things can move so fast. I think it’s hard to sort of quantify or even just record where you’ve had wins because you’re just onto the next thing.

28:18
So it’s really important to you know, give that kudos to your team and make sure that you are saying, Hey, here’s what we accomplished. Here’s what we’re gonna accomplish next, and we’re onto these five, ten other things, but we just got through all of this and this has helped to move the business forward and our process forward. I like that. I like that. And that is so fair to say document your wins because it’s not as obvious except the folks like us, but, you know, service operations is not just a cost center, right? It manages risk, but it’s also a growth lever, right?

29:01
Like you are in the middle of it all and you build the levers that you need to be pulled for growth, you gain the insight that needs to be seen for growth. So that is such a fair thing. But also operations people are very humble and don’t raise their hand a lot for credit. So I really like that takeaway as well. Document your wins and be proud of yourselves. Yeah. Warren, anything to take us home with? You know, I’ll just finish with maybe a global statement here. I think, you know, we’re past approaching 2025, and as I look at the market and look specifically at service organizations, we’re gonna see heightened challenges, right?

29:43
Whether it’s globalization, technology driven disruptions, global and local regulations. These are all gonna affect all enterprises and certainly services organizations and those that are able to be agile, as Laurie says, those that are able to adapt are gonna be the winners. And it comes back to Chris, where you started this podcast talking about people, process, and technology. All three have to come together and I’ll finish with control what you control and manage what you can’t. And that’s gonna require data. And I think that’s really gonna be what’s gonna drive success for organizations. I love that.

30:26
I like it. I like it. I really like it too. And I know our audience will appreciate it. And with that, Laurie, thank you very much. You’ve been a fantastic guest. Thank you to our audience for listening. Please don’t forget to like, subscribe, and visit. You can look up Laurie on LinkedIn if you’re interested in any other great insights she has. She’s got a lot. And go out there and enjoy being a courageous, fearless services leader.