9 Considerations For Consulting Firms Competing in the New Health Tech Subscription Economy
The traditional consulting business model have typically been based on several key factors. First, employing smart people to deliver on set projects. Second, generally gaining revenue from billable hours. And third, building business through the organic growth of more billable projects/hours.
However, new business models are emerging giving such firms the ability to provide their clients with real-time analytics, dynamic dashboards, and/or tech-enabled applications. Having a digital or tech arm as part of your offering is becoming increasingly essential in today’s subscription economy reality.
Small to mid-size consulting firms and agencies who begin to offer software development, dashboards, and analytics are positioned to generate recurring revenue that not only leverages the strength of their teams, but also helps them stay involved with their clients on a regular basis. In addition, by productizing core services, consulting teams can increase their share of market to more clients while continuing to use their experts for more complex projects.
Here are 9 key considerations for service-focused firms to effectively competing in the new health tech economy:
Understand your existing clients’ needs for real-time insights and analytics. Providing ongoing value through fresh, evergreen insights enables your clients to identify trends and make immediate adjustments to improve decision-making, ensure business agility, and engage their customers at key touchpoints.
Re-engineer your business model and compensation structure. In health tech, it’s essential to shift from project-based billing to ongoing subscription-based relationships that focus on retaining customers for a long time. This creates recurring revenue and enables you to produce a more consistent and predictable cash-flow.
Identify which current projects can be converted from static to real-time. The traditional static approach is linear and doesn’t usually have the scope to address changing requirements. In contrast, real-time projects are by nature iterative, focusing on evolving information to provide results and ongoing value.
Understand your new competitive landscape. It’s important to understand various health tech trends that are changing the competitive landscape. This includes but is not limited to virtual reality, artificial intelligence, augmented reality, and machine learning.
Differentiate beyond your current differentiation. Consulting firms and agencies must differentiate by deeply understanding the business needs of their clients and adapting to align with their business models. This means adding ongoing value—through technology, services, support, and the ability to provide a high-touch user experience.
Make clients aware of what they are missing if they also don’t shift to real-time insights. It’s a fact that by the time a report is delivered, the data is old. In todays’ fast-paced competitive world, it’s vital to make clients understand that they are already behind if they are not asking for real-time data and insights.
Find software development partners rather than building a full team. An experienced team of software designers, like Swift Invention, can help you kick off pilot projects as you enter this new space with tailor-made solutions for your ideas.
Update your positioning and messaging platform. It’s important to not only highlight the foundational strength of your existing work products and team, but also to showcase your ongoing digital deliverables that support urgent client needs.
Support the health tech arm of the business with enough investment. To successfully compete and differentiate, you need to ensure that your product-focused model of innovation, MVPs, and fast fails is not tied to billing hours.
Conclusion: Failure to add real-time analytics, dynamic dashboards, and/or tech-enabled deliverables to the traditional service-based client offerings will ultimately force an erosion of current business, with projects going to firms that have mobilized to address their client’s digital and tech needs. However, offering complete end-to-end deliverables ensures that revenue is not left on the table and can help smooth potential revenue losses during times of recession. But most importantly, these digital health-tech deliverables are not only in your clients’ best interest, they create significant value that helps ensure long-term, ongoing relationships.
