Professional Services

Why innovate in professional services?

Professional services firms can be challenging companies to grow. They can deliver incredible value to clients through their expertise, but that expertise is typically tied to the time and effort of the services team. As the company grows, costs, complexity, and volatility increase as well.

Professional services leaders need ways to unlink the value they deliver from the time, effort, and complexity to deliver it and to create a stable stream of recurring revenue alongside more volatile project-based work.

According to McKinsey research, 9 out of 10 businesses–including professional services companies–are embedding digital technology in their current business model, launching new digital business models, or both. The top economic performers are investing more aggressively than the average firm to differentiate or transform themselves with digital products.

The B2B subscription market will reach over $340 billion in this year, and is growing at 24% year over year. While this market size includes dominant players, there is a massive opportunity for niche digital products that reflect the expertise and capability of specialized professional services companies.

Why Highland?

With over 25 years of experience creating successful digital products for expert firms, we know what it takes to get new ventures to market. We don’t simply build software, we launch products.

Our work lives at the intersection of business outcomes, user value, technical excellence, and a pragmatic approach that starts experimenting from day one and gets to market fast.

We provide a single, multi-disciplinary team customized to the specific needs of our clients, whether strategy, research, design, development, product strategy, or go-to-market.

“The initial product was much more sophisticated than we expected. Our executive team and board were highly impressed.”

Kathrin Munz

Head of Products & Services

The benefits of digital products in professional services

Create Recurring Revenue

Most services businesses move from project to project with little reliable recurring revenue. A digital product can provide stability and predictability, unhooking revenue from linear time and effort either as a stand-alone product or as a subscription embedded within existing services.

Increase Profitability‍

A healthy digital product company has gross margins of 75-80% or more, compared to 50% or less for services companies. Product development does have higher upfront costs, so leaders must understand the path to ROI and revenue of an investment in a digital product.

Differentiation‍

A digital product can create synergies alongside current offerings, helping professional services companies win new business compared to competitors and remain sticky with existing clients over time.

Unlock New Customers‍

Most firms only serve a small percentage of potential customers. Digital products allow a professional services company to serve smaller customers profitably and expand their potential market.

Increase Company Valuation

‍The valuation multiplier for a subscription-based business is much higher than a services company, and that valuation is less dependent on a founder’s or leader’s presence in the business at exit. Over the last 8 years, when digital product companies have been sold, they have sold for five to nine times their annual revenue, compared to one times annual revenue for the average professional services company.