Am I the only one who dreams about being able to offer consultancy services as a SaaS company?
Is this a utopia? Is it possible to develop a consulting firm into a digital delivery machine characterised by scalability and on-demand services?
I believe it is at least possible to get a lot closer to the above situation than where we are at present. By challenging existing models and work methods, we can reach our clients in new ways. Digitalisation facilitates more methods of delivery, and when we develop our deliveries and utilise the technology available, we can update our business models.
Consulting firms are generally fat and happy and are not particularly inclined to update their delivery model or business model. Selling on a per-hour basis is a proven consultancy concept that works, at least for now. The risk, however, is that new concepts, for example readily available and highly competent project resources who work at distance and at a lower price via gig platforms, will begin taking a larger slice of the cake.
When clients realize that they can access awesome resources at a lower price from these gig-platforms, it is likely that certain consulting firms will find it increasingly difficult to compete.
SaaS stands for Software as a Service, and really only refers to companies that sell software. There are, however, many other services that use the same model, in other words delivering a service over the internet (the cloud).
Think about all the apps and services you use on a daily basis for work and in private life. You share documents, manage project plans, pay for train tickets, swish a friend, watch something on Netflix, bill a client, etc.
As consultants who offer and provide our services to other companies (B2B), we focus on these types of SaaS offers. Office 365, Salesforce, Googles G Suite, Hubspot, Workday, Mailchimp and Cinode are all examples of SaaS companies from which we draw inspiration.
At present within the consulting sector, most client acquisition takes place through traditional sales processes. Senior consultants use their contact network and offer the firm’s services as a solution to the prospective client’s problem. When the client changes direction, the consulting firm is able to follow suit.
If we were a SaaS company instead, we would work more with the client’s buyer journey and identify potential new clients during their own online research prior to purchase.
As a SaaS company, we would help them to understand the problem at a more in-depth level, by offering downloadable guides, webinars and microtools. Thereafter, when our marketing automation system indicates that they have read about our solutions and have visited our pricing page three times during the past week, we send them an email and book a meeting (or perhaps we are still a little old school and call them instead!). The client is then delighted to hear that we can help them with their problem, not to mention surprised at how well we already understand them.
The more advanced cloud consulting companies don’t even need to send an email or make a call. They have functions on their site which allow the client to test/purchase the service straight away. It could be an online training module, a digital assessment tool or an executive coaching session online.
The consulting firm works in this manner in order to gain a more in-depth understanding of the client, which then enables additional relevant services to be offered, either digitally or during a meeting.
It is bound to be easier to book a meeting with a new client if the client has already taken part in a valuable training session online. In certain cases, we do actually need to get together face-to-face and talk about the sizeable projects. This also makes the process more pleasant and personal. Not everything should be handled digitally – but a lot could.
These days, consulting firms offer and provide competence, time and human resources. Some of the reasons clients choose to engage our services include the fact that we:
By streamlining and digitalizing projects and the delivery process, consulting firms can emulate cloud services to a greater extent. In many cases the consulting firm’s specialized expertise can be integrated with a digital solution so that at least certain parts are not delivered by the hour. Some areas to begin with include:
Ask yourself these questions: What areas, processes and methods are you mastering as a consultant, but your clients are not? Is it possible to create a service around that, and allow your clients to access that capability digitally? Could it be transfer of skills and knowledge online, or methods built into digital tools, remote coaching sessions or a paywalled expert community? Start small and test something, see if it sticks!
A significant strength of today’s cloud services is the integration possibilities they provide. Different services can be connected together to utilize shared data and functions through APIs (Application Programming Interface).
New payment models
Imagine transitioning from hourly reporting to subscriptions with automatic billing and card payments – my favorite area!
For a long time now, the consultancy sector has charged by the hour, which feels about as exciting as a landline phone!
By digitalizing your offers and delivering online, it is also possible to charge your clients in other ways, for example per user and month. 100 SEK (about 10 Euro) per user and month might not sound a lot, but if you have major clients with thousands of employees it can quickly add up.
The nice thing about scalability is that you can benefit from re-use of your service and can continually add new clients. As long as your service delivers value, your clients will keep using it. After a while you might have ten clients with an average of 1,500 users.
Let us consider a simple equation: (1,500 users * 10 clients * 100 SEK * 12 months) = 18 million SEK per year. How much do you normally bill as a consultant per year? =)
In the online world, card payments rule, and there is a reason for that. With a cloud service you can usually test out the solution by registering your details and your credit card within just a few minutes. Naturally, the chances of becoming a long-term client are increased if it is possible to test out the solution straight away.
This also opens the possibility of bypassing some of the bureaucratic procurement processes. If you sell an online training module within your field to many people, they will then report their participation, which contributes to your brand awareness and increases the likelihood of landing larger deals in the long term.
SaaS companies are an awesome source of inspiration, and even if consulting firms might not be able to directly replicate all of the models they use, there are definitely parts that are worth experimenting with.
I am involved in both external client assignments and internal initiatives where we successfully challenge old work methods and business models. One example is something that we at Centigo call Skills (skills.centigo.se). Skills acts as an umbrella under which we gather several digital initiatives for aspects such as the transfer of skills and knowledge, digitalizing workshop facilitation and more efficient work methods in client projects. It has also paved the way for new business models, new partnerships and new career paths. For you as a consultant, I would highly recommend that you take a closer look at the way we conduct workshops more digitally (read more HERE). It is a quick way of digitalizing some of your operations already today.
Guest blogger – Johan Wallquist, management consultant at Centigo
Guest blogger – Johan Wallquist, management consultant at Centigo
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