Professional services firms use three primary business models when engaging with clients. The first is project-based which provides expertise unavailable within the client’s company. It has clearly defined objectives and deliverables.
Contract-based engagements are for a specific time to provide identified services for their clients. This allows clients to leverage the professional services firm’s expertise and economies of scale to have work performed typically at a lower overall cost than their employees, especially in areas not core to the clients’ mission.
Combined engagements use elements of project—and contract-based activities. These firms provide outcome-based solutions, often including equipment, software, and maintenance.
Summary
- Business Models: Professional services firms use three primary business models: project-based with clear objectives, contract-based for specific timeframes, and combined engagements offering outcome-based solutions with equipment and maintenance.
- Value Chain: The value chain includes selling services and planning engagements, setting up resources, delivering work and tracking revenue, and billing clients with data management for compliance.
- Leadership Roles: Key leaders include the CEO for overall decision-making, CRO for revenue growth, CHRO for employee management, COO for client engagement success, and CFO for cost control and financial reporting.