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Although the concept of customer solutions is new and unfamiliar in most industries, that hasn't stopped the phrase from becoming one of business's most over-used terms. Sixty-three percent of the Fortune 100 already claim to offer solutions, according to a Booz Allen Hamilton survey of public documents and marketing materials. With the highly visible success of bellwethers like IBM Global Service... More

Although the concept of customer solutions is new and unfamiliar in most industries, that hasn't stopped the phrase from becoming one of business's most over-used terms. Sixty-three percent of the Fortune 100 already claim to offer solutions, according to a Booz Allen Hamilton survey of public documents and marketing materials. With the highly visible success of bellwethers like IBM Global Services and General Electric's Power Systems, solutions are a fast-growing strategy for companies caught up in price competition and confronted by the threat of commoditization. But the term solutions is tossed around carelessly, often unattached to a real solutions strategy. Very frequently, the word solution is merely a costume thrown over a repackaged, existing set of products or services. A real solution, in our view, is a fundamentally different approach that creates additional value for customers and suppliers by meeting five criteria: It is co-created by a customer and a supplier; it integrates products with services to meet essential customer needs; suppliers accept some of the risk, often through performance-based and/or risk-based contracts; relationships between suppliers and customers are unusually intimate, far beyond a traditional buy-sell relationship; solutions, therefore, are tailored to each customer. Applying the five-part test can help customers find real solutions among the welter of sales pitches and proposals crossing their desk - a crucial identification, if lasting, beneficial change is the goal. Similarly, the test can help would-be suppliers distinguish their solutions offerings from the pack, and achieve continuing, profitable relationships with existing and new customers.

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