“Productisation” will drive growth for innovative professional services firms
I believe the next decade will see a shift within professional services firms, where they will transition from a model which is predominantly geared around their processes to one that is geared around customer outcomes.
They will complete their evolution from a bill by the hour service based model to something closer to a product subscription model. They will therefore move from a position where it is about “clients” and service to one where it is about “customers” and products. This shift will deliver growth, sustainable recurring revenues at high margins, and new higher value service opportunities. At the core of this shift is the changing nature of consumption driven by consumer technology and the inexorable drive for base level information to become free. Services firms are sitting on vast quantities of information or data, and yet very few are harnessing this effectively in their offerings.
Customers will expect to consume instantly via technology in self-serve cloud-based models, and will turn to their advisors for higher level expertise in a more collaborative and ongoing manner. Anything that can be commoditised will be, and those that are smart will find ways to turn this to their advantage through subscription-based products. This has been the approach of information-based technology businesses such as LexisNexis and Thomson Reuters for years, as they can achieve high margins and provide an essential source of repeatable business –