Defining Products and Services

What is a product and what is a service?

To begin with, there is no clear answer to this question today, each company will have its own definition of products and services.  However, let’s break down the elements to make sense of this and we will be able to translate this into the modern day.

Traditionally customers purchase products (being tangible components) from the provider and ownership of these products would be transferred to the customer accordingly. In some cases, ownership may be transferred on a temporary arrangement through a lease or hire agreement. In summary, these products are the outputs of the provider which in turn enable the functionality so that the customer can achieve the expected outcomes.

Services however are the actions which the provider carry out and these traditionally are offered as an addition to compliment products, e.g. technical support, installation, delivery and so on. These actions are therefore, the outputs of the provider.

With this in mind it is easy for the customer to separate products from services.

Today however, products can be sold/provided as services, for example cloud computing capabilities enable infrastructure to be provided as a service (IaaS) and not to mention, software as a service (SaaS) and platform as a service (PaaS) etc., which comprise of a configuration of both products and service actions.

So, the customer today can perceive both products and services as one of the same thing.

For these reasons it is essential that service providers think outcomes and not just outputs. I can give a plethora of examples of how services can become outcome oriented through design, transition and operation, right down to how we categorise incidents. 

Today, IT is the business and the business is IT, there is no separation. I hear people say IT should be aligned with the business, well to be honest this is old school, IT needs to move on from alignment to true integration with the business. How does IT help the business become more efficient, whether cost-related, or through quality, value, compliance or performance if IT doesn’t become transparent with customer outcomes?

I hope this makes sense. If you need help with either site implementation or introducing your own in-house training and education framework then just give me a shout.

Trevor (Wilson)

E: [email protected]

W: www.itsmassist.com