Applying a product development strategy to professional services

Traditionally, professional services (such as accountancy, HR, Legal or business advisory consultancies etc) have been able to grow only by selling more services that are billed by the hour. That however means more staff, which adds significant costs and keeps profit growth linear. A feasible strategy is to create a product out of the service, in which the products come about as the service becomes infused with automation, analytics, and a different monetization model. First, discover potential products by identifying opportunities for automation inside the business. Tasks that are performed frequently and require little sophistication are ideal. Next, develop and embed the products (e.g. as a software) to complement the services rendered. Lastly, monetize the products by moving away from billing hours to using a revenue model that captures the benefits through transaction-based pricing or even outcome-based pricing.

SourceHavard Business Review

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