How to monetize the insider knowledge of your business
As hyper-focused as professional service firms – such as consulting firms, tax, legal and audit firms, etc. – may be about discovering new sources of value and growth for their clients, it has never been more important for them to do the same in the name of their own bottom line. Because if they don’t, they may well miss opportunities to capitalize on their customers’ growing appetites for results-based digital services that leverage a company’s most valuable asset: its specialist knowledge in-house.
Intellectual property remains one of the most important competitive differentiators of a business. But instead of making this intellectual property available to clients only as part of a formal engagement, companies are finding creative ways to monetize their institutional expertise and service lines with product offerings such as “safe deposit boxes”. knowledge “, as well as new business models built around tax advice. , business analysis, research, etc., delivered digitally as a service, usually by subscription. During the COVID-19 pandemic, we have seen these types of services provide timely and highly resilient income streams. In the longer term, they hold great potential for their ability to provide businesses with diversified, recurring and highly profitable sources of income. The value of the global analytics-as-a-service market alone, for example, is expected to grow from $ 9.62 billion in 2018 to over $ 126 billion by 2026, according to projections by Allied Market Research.
High projections like these reflect an emerging customer preference for digitized services available anytime, anywhere, delivered through e-commerce technology that is both smart and invisible, with the supposed privacy, security and trust. and insured. In the midst of this shifting market dynamics, the edge goes to companies that can afford to reorganize the traditional business model of talent, time, and materials to create the kinds of results-driven digital services and engagements that their customers want. customers are looking for: subscription platforms, over-demand knowledge as a service, etc.
The possibilities offered by results-oriented services are numerous. Deloitte’s Reimagine platform gives customers access to ready-to-deploy business plans, accelerators and SaaS products, for example. CenturyLink’s Lumen Big Data as a Service provides on-demand access to analytics without the initial investment in an on-premise solution. Likewise, a tax or legal firm might develop a knowledge vault from which to draw advice to help clients navigate the laws when opening a new office in a specific country. Instead of committing to a full-fledged engagement, the client gets a small, discreet, and highly specialized service.
What’s particularly interesting about services like these is their potential for non-linear growth – their ability to increase revenue without increasing headcount by monetizing a company’s institutional knowledge and expertise. But they also appeal to their ability to:
- Provide consistent and reliable annuity-type income streams from subscription-based services;
- Open the doors to deeper and broader commitments;
- Extend a company’s access to customer segments that it could not otherwise engage;
- Allow a business to expand its service “storefront” by leveraging its contingent and subcontracted workforce to add skills.
- Reduce overheads due to lower cost of sale and less tactile processes, allowing small businesses to be more cost competitive;
- Allow a company to adapt its subcontractors and occasional labor to meet the demand for certain services, without making these fluctuations visible to customers;
- Drive customer loyalty and trust with a high customer experience.
As valuable as a company’s institutional knowledge is, maximizing the value of this intellectual property – and making new, results-driven revenue streams like these sustainably profitable – requires a certain set of smart digital capabilities. Perhaps more importantly, businesses will need a digital core to manage and support the full lifecycle of these new delivery models, one that allows them to capture, “platform” and “produce” modularly their expertise, and make it available through an e-commerce experience. They will also need to be able to test and implement flexible and sophisticated models of pricing and results-based revenue recognition that reflect the transfer of performance risk from the client to the company providing the service, as there is is of great value to the customer getting one of the more predictable performance of a service. And they will need to be able to connect these services not only to all aspects of the business, from pricing / revenue recognition and personnel to delivery and invoicing, but also to customers and the entire chain. value, creating a closed loop to refine their offerings and create new ones on the fly, based on customer feedback, operational and market realities and changing business priorities.
In the business landscape, all kinds of companies are exploring new business models in response to customer demand for digitized and results-based services. Even the venerable Rolls-Royce, for example, is no longer just a manufacturer of engines and automobiles. It now offers turnkey, performance-based services around its jet engines, creating a new profitable source of revenue while saving customers a significant capital expense. Professional services firms can do the same, with their institutional knowledge and expertise serving as the driving force that allows them to finally break the link between workforce and revenue, and in so doing, position themselves to thrive in a growing market. more focused on results and experience. .