PRODUCT MANAGEMENT IS ONE OF the fastest-growing roles in business, having gained increased scope and importance in Silicon Valley. While product managers used to be hired almost exclusively by technology companies, they are now being recruited in growing numbers by service-oriented businesses as well, with firms such as Accenture, Chase, JPMorgan, Optum, and Vanguard adding product management functions in the past few years. Why are services companies looking to add product capabilities to their organizations?
Professional services firms, which span a wide range of sectors, including IT, legal, marketing, and tax and accounting services, face two major growth challenges. Owing to the significant human involvement in service delivery, their gross margins are low, and their head counts scale linearly with increases in revenue. Product companies enjoy much higher growth margins and revenue per employee. This explains why startups that offer software-as-a-service products are valued at six to eight times their annual revenues, whereas startups that offer project-based services are valued at one to two times their annual revenues.
Recognizing the challenges of margins and scalability, professional services firms are trying to evolve into product-like companies by productizing their services. This involves automating, standardizing, and packaging aspects of a service into a tangible, repeatable, and scalable offering that is efficient to produce and easier to scale.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Ask Sanyin: How Do You Build for an Unpredictable Future?
While the pandemic was a wild ride of uncertainty for me and many of my peers in leadership, it feels like we never regained our footing.
What You Still Can't Say at Work
Most people know what can’t be said in their organization. But leaders can apply these techniques to break through the unwritten rules that make people self-censor.
Make Character Count in Hiring and Promoting
Most managers focus on competencies when evaluating candidates but it’s character that will transform the DNA of the organization. Here’s how to assess it.
Why Influence Is a Two-Way Street
Managers achieve better outcomes when they prioritize collaborative decision-making over powers of persuasion.
Know Your Data to Harness Federated Machine Learning
A collaborative approach to training AI models can yield better results, but it requires finding partners with data that complements your own.
How Integrating DEI Into Strategy Lifts Performance
Incorporating diversity, equity, and inclusion practices into core business planning can provide a competitive edge.
The Myth of the Sustainable Consumer
Companies that understand the different kinds of consumers for sustainable products can market to them more effectively.
A Practical Guide to Gaining Value From LLMs
Getting a return from generative AI investments requires a systematic approach to analyzing appropriate use cases.
Improve Workflows by Managing Bottlenecks
Understand whether process or resource constraints are stalling work.
Craft Schedules That Work for Everyone
Business leaders can improve retention and business performance with schedules that make sense for workers’ lives.
