Professional service firms are being rocked to the core – they have to change to survive
The business model of professional service firms are being disrupted to the core! It’s foundations are being rocked.
From accounting, legal and advertising agencies…. no-one is sacred.
The digital economy has arrived and one has to adapt to how it operates.
Gartner has written an outstanding white paper on this supported by research contribution and review were provided by David Willis, Saul Brand, Mary Mesaglio, Daryl Plummer, Marcus Blosch, Chris Howard, Bard Papegaaij and Lee Weldon.
Below is my summary of the paper
“In the digital era, the economics of connections describes the creation of value through increased density of interactions between business, people and things. “
You no longer have to own assets to create value. You need to develop and nurture relationships.
Value Will Come From Sharing, Providing and Leveraging Critical Capital Assets .
Airbnb and uber are case in points
Communication and connectedness through distance, based on shared values and interests is available – but there is still nothing like face to face relationships . People are tribal – they like to belong – however, the physical and virtual worlds are blurring
Roles — In the economics of connections, economic agents could take on any role, such as:
- An operator completing a discrete task
- A consumer seeking to acquire information, goods and services
- A provider seeking to offer information, goods and services
- A broker seeking to connect consumers and providers (referron)
- A combination of any of these roles.
Compensation — In the digital era, a different compensation method may accompany each different role. Work can be free, based on an exchange of similarly valued work, plain old currency, a bitcoin, a point system.
Will there be “jobs” (living @just over the breadline”)
Will there be independent operators?
Wil there be a new paradigm?
- How will people interact?
- How will they trade there products or services?
- What currency will they use?
Kpis in the connected ecosystem
- reduced time to complete a process,
- ability to gather and process larger data volumes with higher quality,
- sentiment analysis and net-promotor score.
- Engagement of clients
- Satisfaction of clients
In digital business models, enterprises create an ecosystem of independent parties sharing assets and resources.
In areas ranging from ride sharing and hoteling to funding and development, innovators and entrepreneurs are taking a different approach to how they manage their assets.
They have a sharing mindset.
A mindset of giving. A mindset of generosity. A mindset of working together for the benefit of the client.
We are developing an ecosystem of players and capabilities to deliver an exceptional client experience.
Sharing and giving is not charity – it’s good business. An abundant mindset will grow an ecosystem. It creates leverage and leverage creates growth .
Tesla understands this
Tesla Motors has shared for free its patents on superchargers with the general public.
Elon Musk, Tesla’s CEO, understands that the more others invest in and advance the technology, the stronger the electric car ecosystem grows.
A robust ecosystem, especially one using Tesla standards, makes Tesla cars more valuable. This is not charity but good economics. It was a calculated business decision that builds and leverages the ecosystem. Tesla has shared these patent assets to leverage the future ecosystem assets owned and delivered by others.
Providing these assets free to the “network” multiplies the value of other Tesla assets.
This is a core principle in the new economic model of connections.
Several other principles are needed to make this model work:
Experts and service providers, engineers and professionals can be shared
Allowing customers to rate the quality of the providers increases the transparency of the ecosystem and spurs ecosystem health, continually improving provider quality needed attrition.
In many models, providers also rate customers, creating an open system of value exchange between provider and consumers as peers.
Governance and professional standards
As an ecosystem grows, it often needs more governance or more detailed qualification requirements that go beyond ratings to identify providers that are not behaving appropriately. Trust is a key component of these ecosystem-centric digital business models. Professional associations and educational institutions will still play a massive
Relationships vs transactional – being able to understand customers needs
Economic Agents need to understand the customer needs or “an opportunity” and then identify the best resource in the ecosystem to refer.
Once an opportunity is complete, another opportunity is created providing more opportunities to service.
As long as people are breathing, opportunities will continue to occur!
The transaction / or servicing of the opportunity is a given – the expertise, professionalism,product or machine needs to be available to provide that awesome service.
A transactional mentality must give way to one of relationship , influence and facilitation.
It’s about being able to understand the environment and provide the capability for different process permutations to emerge spontaneously based on the customers needs.
One will need to leverage their connections dynamically to derive the best value in responding to the specifics of the exact situation as it unfolds.
It means understanding the ecosystem and investing to capitalize on unanticipated, serendipitous value.
Invest in technologies that will give them the speed, agility and analytic capabilities to effectively exploit business moments (such as complex-event processing, real-time offer engines and ultra-low-latency middleware). (Referron? )
Be part of an ecosystem of people that you know like and trust, so as to give a brilliant service wowwing the connected customer!