When Your Incompetence Becomes A Revenue Center
Why sometimes "professional services" is a euphemism for not being able to deliver value to your customers.
Over many years, I have worked with many technology vendors. A mix of on-prem software vendors, technology & platform implementation consultants, SaaS platforms, etc.
Sometimes in these engagements, a vendor will offer their Professional Services as an add-on cost service. For context, I define Professional Services as buying a set of hours or specific deliverables such as customization of a product, white-glove build-out of specific features or functionality, or initial implementation of a platform. These services are usually purchased directly from the vendor. When Professional Services work as intended the option has an inherent value for the client.
Often it is more economical to leverage a vendor’s services because their specific domain knowledge will produce faster results that assigning internal technical teams. In other cases the value exists because your internal teams are already tied up on other important work and the opportunity cost of switching them to these tasks would be higher than the cost of the vendor’s services.
In a successful Professional Services engagement, the key concept is that there is some unique value proposition - a specific approach, process, domain knowledge, or simply just availability of time to execute. But what happens when that’s not the case?
Recently I came across a case where professional services were offered as the only way to extract data out of a platform. In fact, the entire pitch for such services had already been calculated as a revenue center. There was even a unit cost! In this particular case, the need was for extracting historical activity data. The customer manager cheerfully communicated that there was a unit cost for each year of data needed. Further, if there was a need for data fields outside of a base schema, we could also engage their Professional Services team to assist extracting those. Fields that the front-end of the platform allows administrators to freely create!
I see a few critical problems here.
The marginal cost to produce a CSV file of n+1 years of data is zero. It’s literally a single change to a WHERE clause’s data range filter (or at least it should be).
Why is a CSV file the only solution when APIs are available? Why are humans involved in this request at all?
Allowing a system to introduce data fields on the front-end only to lock it up on the back-end is egregiously poor design.
Requiring technical teams to produce custom reports for any customer that needs data seems like an awful waste of expensive resources.
So here is a case where an organization has spent time building out a Professional Service practice. They have assigned technical leads and high-dollar technical engineers to this work only to have them deployed as a way to mask poor system design and questionable business practices in general (i.e. locking up customer data until you pay). What unique value is being delivered to the customer in this case? None. But therein lies an interesting perverse incentive. Why would the business invest in fixing this when they can generate revenue from these Professional Services?
I think it makes the case that as technology leaders who may run Professional Service teams, it is important to really understand what unique value that Professional Services team is designed to deliver. If those teams are tasked with manually doing things that better design and feature engineering should have addressed, then you have a serious resource allocation problem. Probably pretty serious strategic and execution problems too.
Maybe it’s time to buy some Professional Services hours to fix those problems first before you hit up your customers for money to mask poor value delivery.