Your clients are becoming more and more demanding, but willing to pay less and less. In addition, your competition has been increasing. On the one hand your competition is the super specialized—often one-person—consultancies, that can deliver specific high quality services at low cost because they have little or no overhead to carry. On the other hand, there are the firms in developing countries, who are moving closer to their customers and delivering higher valued services. To make lemonade out of all these lemons, you may need a new business model.
Traditionally, professional service firms like yours have had longstanding relationships with their customers. Customers reached out to you because of the depth and breadth of your experience and the quality they can expect. Few others can tackle the complex projects you can handle. However, more recently, these same clients are becoming more demanding. They are asking for more at lower cost and require proof of the value of the services that you are going to provide. Proof that is difficult to deliver when each project’s implementation is considered unique.
A change in approach and a new business model are needed to keep afloat in this new reality.
To define your path forward, it helps to start by looking back. In the portfolio of services you’ve delivered to clients in the past two years, which are the projects that really stand out in a positive way? Why?
The most memorable projects are probably the ones where you and the client, or perhaps suppliers, engaged, using a novel approach. You saw that the best way to address the issue at hand was to do it together.
These types of partnerships and the lessons learned from pilots, can be extremely valuable. Especially if they can be replicated for other clients and in different contexts. Pre-formatted solutions relieve clients from having to start from scratch and enable you to offer proven concepts at lower cost.
Such an approach does imply a new business model, however, in which you move from the traditional, rather reactive type of business model—one solution at a time built to customer order—to a proactive business model—consisting of pre-formatted client/business value solutions.
How to deliver more for less?
The following steps are simplified, but should give you an idea of what it takes to explore a new business model:
- Start by identifying the need for a new business model.
- Review remarkable accomplishments of the past, “wow” projects. What made these remarkable and are there distinct elements?
- Identify what it will take to move from one-of-a-kind to replicable solutions. How will doing that impact your business processes? How will it impact your client relationships?
- Find a pilot that you can use to model the new business approach.
- Evaluate the pilot.
What you will probably learn from this exercise is that your novel approach will not only require a new business model, but also a new development process. Is your innovation management infrastructure up to speed to accommodate such changes?
If you are interested in learning more about the development and implementation of a new business model in professional services, please sign up below for our webinar Thursday December 17 at 12.30 pm.
Organizing4Innovation is proud to offer the first innovation management approach that is dedicated exclusively to the professional services. For more information seewww.organizing4innovation.com