Tag Archives: Professional Services

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Has Knowledge become Commoditized?

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It was perhaps one of the more interesting tweets that I’ve seen all year. It was simple in it’s focus and deep in it’s meaning.

It was from a friend of mine, Kari O’Brien (@KariOBrien):

“that’s it i’m in love with #quora. i use it almost as much as google/bing, and it’s not a hassle like blekko.”

I knew immediately that I had to speak with Kari. We did. I then spoke to a few others, and the pattern began to emerge. Sure, each person, from Kari on down, had a different “use case” for Google, Bing & Q&A sites. But what was common between them all was that Q&A sites like Quora and Focus were, in fact, taking mind-share away from the traditional search engines. Not much, but enough to indicate a fundamental shift in the way that people were using the internet for research and information.

[side thought: take a moment to consider what you see as the differences between information and knowledge…]

Go back a year ago – if you wanted information, or knowledge, you went to search engines, typed in a few keywords, or the general subject you were looking for, and 324,541 websites would appear. Best of all, it cost you nothing. That was the age of information as a commodity, and the tools you used to find that information were search engines (like Google and Yahoo-Bing). Yes, the knowledge was there, but you had to dig (often deep) to get it.

But the new use of Quora, Focus and similar sites has changed the way the game can be played. These are Question and Answer sites. You ask a question, and anybody can answer it. In turn, you can answer anybody else’s question. If others like your answer, they can, in a crowd-sourced manner, vote up your answer. Answering a question, and having it voted to the top of the ranks, implies Knowledge of the subject matter of the question.

WHAT ARE KNOWLEDGE AND COMMODITIZATION?

Before I dig any deeper, let’s take a quick look at what Knowledge and Commoditization really represent. According to Wikipedia (which references the Oxford English Dictionary):

Knowledge is “(i) expertise, and skills acquired by a person through experience or education; the theoretical or practical understanding of a subject; (ii) what is known in a particular field or in total; facts AND [my emphasis] information; or (iii) to be absolutely certain or sure about something.”

Wikipedia’s definition for a Commoditization is much simpler, but equally telling:

“Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently. As such, goods that formerly carried premium margins for market participants have become commodities.”

Let’s put these two together in light of Kari’s statement (and my subsequent conversation with her and a few others): When they are looking for information or knowledge, they may still use Google or Bing. But when they are looking for Knowledge, they increasingly go to Q&A sites. Not only do they get to see the top rated answers, but they also get to see differing, alternative answers and viewpoints (and thus can make their own decisions about the value of the answer). And it costs them nothing. Knowledge, like information, has become commoditized.

Q&A SITES AREN’T NEW, BUT THEIR USAGE, AND IMPACT, IS.

Ask.com has been around for years. The same is true for Yahoo Answers. Even LinkedIn Answers and Facebook Questions are jumping onto the Q&A bandwagon (many people already use the social media site Twitter as a Q&A tool). But what has changed is the type of “content” that people are searching for, and the search tools they use to find it. While Google & Bing are great free tools for finding massive amounts of raw information, sites like Quora and Focus have become the free search engines for Knowledge – and the popularity of these Q&A sites is indicating both a shift in the relative value of information vs knowledge, and the commoditzation of both.

HOW DOES “CONTENT OF VALUE” EQUATE TO COMMODITIZED KNOWLEDGE?

I’m not arguing that there still isn’t “content of value” that will always carry a premium price (especially in the upper-end of the analytical and investigative analysis/research), but for the mass market, this is a profound change that certainly has implications for those who previously provided “Knowledge” as part of their business or value proposition. For those in the Professional Services industry, here are some questions to consider:

  • How does the commoditization of knowledge impact your Professional Services business?
  • What if your client already has a pre-conceived notion of the “right” answer that just isn’t “right” for their particular situation?
  • How do you add value – and improve upon – the knowledge that a client may have gathered from a Q&A site?
  • How does commoditized knowledge help you improve your “value-add” services? Can you leverage this same information to improve your own offerings?

For a continuation of this discussion, and a slightly different business perspective, check out “Professional Services: What is your Product?” by my friend Marcio Saito (@Marcio_Saito). He’s got some interesting insights, and questions, from his unique business perspective that are well worth the read.

To keep up with all my posts, you can subscribe to my Email feed or RSS feed.

Thanks for reading – Fred.


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Everybody wants Superman…

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A man runs into Superhero, Inc., charges up to the store owner and says “I’ve got a major problem! Can you help me?” The owner calmly replies “Of course.”

He then goes into the back room and returns with Jimmy Olsen.

The man is immediately suspicious. “That looks like Jimmy Olsen… I was hoping for Superman.”

The owner takes Jimmy back into the back room, puts a Superman suit on him, combs his hair in the other direction and brings him back out front.

“There,” he declares, “Superman.” The man is a bit hesitant, but satisfied and turns to leave the store with Jimmy Olsen in tow. On his way out, the store owner says “Remember to bring him back by 9pm, and don’t let him try to jump off any buildings.”

It’s human nature for people to seek out the Superhero who will save the day. But in the real world, unlike comic books, Superheros only have so many hours in the week, and can only be in one place at a time. Equally important, not all problems require a Superhero, and can easily be handled by a Sidekick (sure, they work as a team, but sometimes Robin, the boy wonder, can match or out-perform his more famous mentor, Batman).

THE PROFESSIONAL SERVICES DILEMMA

In the world of professional services leadership, the “Superhero Syndrome” is a part of everyday business. Clients want the Superhero professional, while professional service providers face the task of balancing out what is really best for the client.

If you are a sole practitioner, this may not be much of a problem – you are your firm and it becomes a matter of time allocation. But as you grow your business (and your partnerships), role players become an increasingly important part of your overall capabilities and offerings. Unfortunately, while you may be growing and expanding, your clients may still view you as the Superhero and pay little or no attention to the excellent staff, and their strengths in various roles, that you have built around you.

As your firm grows, this problem can become a recurring event, as your employees begin to attain their own level of “Superhero” status in the eyes of your clients, many of whom will come to expect that they will always deal with their preferred member of your staff, and the reality that they can’t always have access to that individual can be a harsh pill to swallow. In some cases, the client may be willing to wait until that individual is available, but what if that individual isn’t (in your professional leadership opinion) the best role player to handle the job that the client needs for a particular task? This often occurs when a client’s needs change over time, yet they only feel comfortable dealing with the individual that they have worked with in the past.

THE VALUE OF BEING PROACTIVE

When building out your firm, and dealing with an increasingly large number of clients and employees, the best way to address the “Superhero Syndrome” is often through a proactive approach. While there are always going to be unforeseen issues that you need to deal with on a daily/ongoing basis, here are three proactive-oriented thoughts to consider:

  1. Are you marketing yourself or your firm?
  2. Do you promote a Collaborative Project environment?
  3. Are you unintentionally playing into a Bait and Switch game?

These are merely starting points. Properly managing both staff development and client expectations & satisfaction is an ongoing, evolving task, that may differ given on the type of services being provided or the market that you are servicing.

What are your thoughts? Have you encountered the “Superhero Syndrome” in your business? How have you dealt with it? What strategy worked for you? Add your thoughts below and share it with our community.

To keep up with all my posts, you can subscribe to my Email feed or RSS feed.

Thanks for reading – Fred.

NOTE: We’ll be discussing this topic in more detail on Thursday, March 3rd during the #ProfServ Twitter chat (10pmET). #Provserv is held on alternate Thursdays at 10pm ET. Hosts are Alan Berkson (@berkson0), Kelly Craft (@KRCraft) and Fred McClimans (@fredmcclimans).

Come join us for discussions on the issues facing consulting professionals! Share your insights & experience as: Legal, Analytical, Business Intelligence, Financial Advisors, Accounting & Audit, Public Relations, Sales, Operations, Management, Marketing, Interactive, Entertainment, IT, Social, Software consultants. It’s all about sharing techniques, tactics and building a community of trusted professionals.

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Professional Services: Do you know the difference?

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[Updated 1/21/11] A few weeks back, I was having a great discussion with my friends (and fellow Twitter #ProfServ chat moderators) Alan Berkson (@berkson) and Kelly Craft (@KRCraft) regarding our December 23rd, 2010 #ProfServ chat on Value Pricing.

As we discussed and dissected the Value Pricing chat, and how it had evolved over the course of the hour, two themes kept floating to the top of our discussion: 1) how to deal with Professional Services that had become “productized” (sold on a fixed-price basis in a product-like manner), and 2) at what point does a Professional Service cease to be a Professional Service and become a mere service-related add-on to a product sale.

Why is this important? Because almost every industry, from Hardware to Software to true/pure Service industries, uses the term Professional Services, but in slightly different ways that often result in confusion on the part of many consumers. Clarifying these issues helps both set proper expectations across market sectors and can also be useful for service providers in determine pricing strategies  – especially in situations where services are customized verses productized. More importantly, many enterprise customers (especially in large corporations or government organizations) have different pools of budget money for items such as products, support services and pure consulting or business advice services.

PRODUCTS vs SERVICES

As we worked through this discussion process, we found that defining a product was the easy part – any fixed, material good that is sold on an as-is or semi-configurable basis.

But the definition of a Professional Service, or even a hybrid service/product (and the line where a Professional Service becomes a product) was a bit more difficult, including the debate over similar-but-different services such as a barbershop vs. a hair salon or a neighborhood kid with a lawnmower vs. a professional landscaping firm (outstanding service doesn’t necessarily make it Professional Service).

“Un-professional service is not the opposite of Professional Service,
it’s just poor service.”

Let’s use software as an example:

  • Having a software developer design a custom software application is clearly a Professional Service.
  • Purchasing an off the shelf application is clearly a product sale.
  • But what about when you purchase an application and somebody installs it for you? Professional Service? Not in my opinion. It’s product + install.
  • Does it become more of a Professional Service if you purchase software and somebody customizes it for you? Perhaps that is a bit closer to a Professional Service, but not, in my opinion, if the software costs $50,000 and the customization is included in the price or if the actual customization fee is nominal.

THE ISSUE OF MARKET SECTORS

This issue becomes more complicated (and important) when you consider the definition of Professional Services across different market sectors – especially with firms that offer a combination of products AND services. For example, many product vendors have Professional Service Groups who provide both pre-sale on-site surveys and design services (usually part of a product sales strategy) as well as post-sale configuration and support (usually part of an ongoing customer support/retention strategy). But their overall goal is to sell products – making money on services is a value-add or bonus (although many firms treat their service organizations a independent profit centers). As such, I would consider this to be a product-oriented firm with supplemental services offerings.

In contrast, let’s take a look at the business services sector (I’ll include strategic planning for business operations, marketing, social media and public relations as good examples here) where a service is being offered, but often results in some type of fixed deliverable (a report, a strategic plan, marketing or advertising materials, etc.). In this situation, I’d clearly lean towards describing any material deliverable as being more of a result of the services being provided, and thus treat this business as a more of a services business than a product business.

TOSSING IT INTO THE CROWD

After some good back and forth on this particular subject, we opened it up to the members of  our Professional Services Roundtable group on LinkedIn which generated some additional, valuable discussions. We further discussed the topic on our January 20th #ProfServ chat, which brought out even more opinions -all equally valid but many differing considerably in scope and open to a wide range of interpretation.

“I may not be able to define a Professional Service, but I know one when I see one”

Through all of these discussions, from the original conversation with Alan and Kelly, through the LinkedIn group and into our Twitter chat, there was one constant: while we could all come up with consistent/agreeable answer to the question “What are some examples of Professional Services?” (Attorneys, Civil Engineers, Architects, Consultants, Agencies, Strategic Advisors, etc.), we were unable to agree on a clear-cut definition of just what is a Professional Service and what are the defining criteria.

Even trying to scope the issue through a series of questions was helpful, but didn’t lead to any general agreement:

  • Does the ability to value price contribute to the definition of a Professional Service?
  • Does the way you view your consumer help define a Professional Service (does a “client” denote more of an ongoing Professional Service relationship than a one-shot “customer”)?

TOSSING IT TO THE BIGGER CROWD: YOU

In a way, this entire exercise reminds me of US Supreme Court Justice Potter Stewart’s oft-misquoted statement from his 1964 opinion on an obscenity ruling, paraphrased here as “I may not be able to define a Professional Service, but I know one when I see one”.

Maybe we’re looking at this from the wrong perspective. Instead of trying to come up with a unified description of Professional Services, perhaps it’s more important to answer the question “What is the need for Professional Services?”, a point brought up by Marcio Saito (@Marcio_Saito) during our last #ProfServ chat.

In that regard, I feel confident in the notion that (with a tip of the hat to Geoffrey Moore and his excellent book Crossing the Chasm) Professional Services fill the gap between what a consumer needs and what is available .

So now I’m tossing the question out to you. If you’ve got an opinion or a thought on this issue, please voice it – we’d all welcome your input as we continue to delve into issues of what it means to provide Professional Services.

To keep up with all my posts, you can subscribe to my Email feed or RSS feed.  If you found some value here, or have an opinion, leave me a comment. I appreciate your feedback.

And thanks for reading – Fred.

UPDATE NOTE: This post was originally written, in a shorter format, as a lead-in to the January 20th, 2011 Twitter #ProfServ chat. After the chat, I decided to rework the post a bit to incorporate some of the insights gained from the chat as well as expand upon some of my thoughts that I was only able to briefly address in the original post.