Details aside, all service companies can be divided into two categories - those that embody desires (let's call them operational-type companies), and those that add value to experience, intelligence, creativity and trends (let's call them engineering-type companies).
Perhaps in the literature they are described differently, but I use only practical observations and assigned them names based on my own perception of the world.
Let's say a customer has a request for a service. It can be any service. For example, you need to make a website.
[Requirements]
The operating company will force you to fill out a very detailed terms of reference. The need to fill in will prove very convincing. Will argue about transparency, mutual understanding and mutual responsibility for the result.
The engineering company will ask what problem this site should solve. While the client is thinking and metamorphosing, a lot of interesting things will become clear. In particular, how far the initial requirements are from the real problem. The company will then gently lead the client to understand that their presentation - not quite what you need. By the time the client is ready to let go of control and trust, he will be offered functionality that he did not even think about and several options to choose from. The result will be the elimination of the source of the client's pain. Even if he is only aware of the symptoms.
[Decision and result]
The operating company will demonstrate how everything works by checking each line of the terms of reference. Did you like that green button in the upper left corner? - There she is. And it doesn't matter that the whole world is looking for this button in the right corner. For them, there is no difference between decision and result. Their product is an exact copy of the client's wishes, completed within the promised time frame.
The engineering company, having found out the desired result, will propose to fix the initial indicators. And it will track their growth after the implementation of the solution. Even if the client does not really care about it (this also happens). Just to make sure there is a result in the proposed solution. They then use this information in their marketing materials to attract new customers. Because they also sell differently.
[Price]
The operating company will take the cost per hour. The client will receive an estimate of where each hour will be spent. Possibly make adjustments. Perhaps they will be accepted and cut off from the total cost. It's simple: less risk = less income.
An engineering company will take a fixed cost without explaining what is inside it, and will not bargain - what is priceless inside. Intelligence. Many years of experience. Talent. She will not get a mass client in this way, but she will get a reliable, mature and status one. And the client will get much more - multiple payback in the long term. This result is not simple and not always predictable. But: more income = more risk.
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This post is not about what is good and what is bad. Different companies are needed, different companies are important. And in both cases, there can be both justified and unjustified customer expectations... I just wanted to provide a basis for two issues that concern the owners.
Question 1. How to choose a service provider?
I already wrote once about two approaches to delegation... It works the same way here. Assess who holds the intellectual asset - if you are, find an operational contractor. If you want more, look for an engineering approach.
Question 2. How to increase the margin of the service business?
It is just something to indicate or increase the added value of intelligence. For this - yes, you have to add it. Make a transformation from an operating room to an engineering type.
But these changes are not easy, because they are embedded in contracts, in processes, in communications, in systems. And the most important thing is in their heads.
Changing what works is a thankless task. Especially with an increase in the share of risk. In even false stability.
Very soon and for a very long time, this risk will serve as an argument why the changes will not take root. Do you have enough patience and courage not to back off?
Sometimes it seems to me that it is easier to create a new company than to transform what is going on a knurled one. And operating-type companies remain in the operating business, accept themselves as such and work on the quality of operating indicators - speed of service, quality of service and optimization of business processes.
Perhaps you have a different opinion?
