The Focal Point Blog // Operations Best Practices // Caitlyn Marsollek // April 25, 2024

How to Create Operational Efficiency With Productized Service Offerings

When it comes to your service offering strategy, we’re here to advocate that you don’t need to reinvent the wheel to deliver exceptional results to your clients.

We know what you’re thinking – “each deal is unique” and “every project custom”. However, creating a new offering for each deal poses limitations for operational efficiency and growth. Truth is, every client is unique, but how the solutions to their problems are discovered, strategized and delivered can be repeatable.

What are Productized Services?

Productized service offerings are predefined services that are packaged and sold like products. They come with set pricing, features, and delivery parameters that can be sold in a repeatable manner. This strategy has become increasingly popular for organizations who seek to increase operational efficiency and growth. It allows for the standardization of services, freeing up time spent on defining and strategizing delivery of new solutions, and bridging the gap between sales and delivery expectations. 

More than likely, you already have a head start to packaging your services. Whether or not you have it formalized, if you use a discovery phase with your new clients, you have a productized service. It’s a set amount of time, effort, and price. From here, sales can pick up from the discovery and pitch a solution. According to SPI research, of best in class organizations, 80% of revenue was generated through productized service offerings.

Profitability via Productized Service Offerings

Benefits of Adopting the Model

  1. Standardization: Productized service offerings can act as the bridge between sales and delivery when operations are standardized. Sales can better inform clients on the delivery process and outcomes, and delivery knows exactly what the expectations are when a service is sold.
  2. Scalability: When you standardize and productize your service offerings, you free up more time to focus on the things that will help your business thrive. You’ll spend less time developing unique delivery strategies for each client project, enabling you to concentrate on growth and expand your service offerings.
  3. Predictable revenue streams: As projects flow in the pipeline, you are able to predict project revenue more accurately by using the baseline established for the service. Assigning a set amount of time, resources, and revenue to each service allows for a more precise estimation of your revenue stream per project.
  4. Market Differentiation: One of the key advantages of productized service offerings is that they create market differentiation for your organization. While many agencies may offer similar services, having a clearly defined approach and end result will set you apart from your competition.

How to Adopt & Implement Productized Service Offerings   

When it comes to adopting productized service offerings, we turn to Mckinsey’s Three Horizons of Growth. The strategic framework is used to help business plan for growth while balancing attention between current and future opportunities. Let’s define each horizon and their functions. 

Horizon 1: Maintaining and strengthening core business – Operational efficiency

This horizon focuses on perfecting the services that are the profit center of your business. The goal is to create operational efficiency within these services to ensure stable deliverability and profitability in the organization. Productizing these core services can help to reach that goal so you can also focus attention on growth opportunities. 

Horizon 2: Explore & discover expansions – Operational Growth 

Now that you’ve created operational efficiency around your core services, what are you doing to expand on them? The focus in this horizon is on discovering and exploring new opportunities. These expansion opportunities usually come with a bit more risk; however, they bring the potential for additional revenue and new offerings to your clients. 

Horizon 3: Creation of new possibilities – Strategic Growth

Here is where you can really start to drill into the strategic evolution of what you can offer your clients. Horizon three is all about the “blue-sky” innovation – creating new capabilities and models that transform the company or even the industry. 

Implementing productized services using Mckinsey’s Three Horizons of Growth framework allow for the continuous cycle of creating growth opportunities and turning them into core profit centers of the business.

Creating a routine in your service offerings turn what used to be a reactive approach to client projects, into clockwork for all teams involved. In doing so leaves you room to focus on the strategic development of your agency.

Disrupt Reactive Operational Habits

At Parallax, we’re all about giving you the tools you need to create operational efficiency and plan for the future. When paired with a productized service strategy, Parallax offers agencies the tools needed to strategically allocate resources across projects, determine project health, and forecast capacity based on in-pipeline opportunities.

Have questions about how you can use Parallax to support your service offering strategy? Book a demo.