Productize your services and earn more with project tools

If you work in a service company, you are in good company. The world is increasingly about knowledge and services and more than 8 out of 10 start-ups in Sweden today are service companies. Many of them work with consulting services and in project form. This has its challenges, especially if you do not have a good project tool.

As many services are new and relatively unique, valuing them and developing pricing models can be messy. On the one hand, it can be difficult for customers to get a picture of what they are buying and paying for. On the other hand, it is a challenge for the supplier to keep track of the hours, calculate the margins and achieve profitability. The solution is to productize services.

We will go through what it means, how it works and not least look at smart project tools that make the process easier and more efficient.

This is productification

In short, productization is about bundling, concretizing and packaging a service so that it becomes a clear and attractive offer. It's not just consumers who have changed their buying behavior. B2B customers have also started to do their own research and compare options before making purchasing decisions. To be seen as an attractive option, you need to be clear about what you offer and at what price. You need to sell your services as a product rather than as time. Compared to the ambiguity of billed consulting hours, customers can see on the package what the product contains and it becomes easier to understand the value of it.

As well as making you more competitive in a tough market, productization brings other benefits to you as a service provider. Planning, refining and streamlining processes allows you to deliver a higher quality service faster, leading to better margins. Repeating a process also allows you to gain experience and standardize it. In the long run, it becomes easier to specialize to increase project profitability.

Productizing a service usually takes place in three steps:

1. the service is new

At this stage, there are no ready-made processes, no accumulated knowledge and no experience in delivering the service. It is uncharted territory and it is very difficult to know what margins you have because you have no idea what challenges lie ahead. The risks here are high.

2. experience in delivering the service

Once you have delivered the service a few times, knowledge and experience start to emerge. Processes also start to take shape. You learn from mistakes and missteps and can produce better results faster. Now margins become more stable and more predictable, and risk is at a medium level.

3. productized service

You now have enough knowledge and experience to consider yourself a specialist. Processes are clear and flow smoothly, making it easy to deliver a unique and well-packaged service. Streamlined processes also reduce the time and cost of sales and delivery. Margins increase as risk is reduced. This efficiency also makes it possible to deliver more projects at lower cost while maintaining profitability.

Smart project tools for better processes

Systematizing knowledge and experience is a bit like getting good at playing tennis or guitar: there are no shortcuts, just continuous practice and repetition. However, it is possible to make the process easier. Cumbersome manual procedures and unclear structures can take a lot of time and resources away from productizing services. In project work, there is a lot that can be streamlined and simplified to put knowledge at the center.

Project management tools are designed to bring everything in the business together into one flow, making it easier to focus on the service. They bring together everything from sales, resource management and time tracking to invoicing, customer management and analysis in a single system. Here are some examples of features that make working on projects and productized services easier and more profitable.

- Project tools

A practical feature that connects sales, scheduling, hours worked, resource management, etc. It provides a clear overview of project status, deadlines, margins, any changes, etc. With relevant information in real time, everyone works on the same basis and work flows more efficiently.

- Resource planning

By entering data and forecasts from the very beginning of the project, the project manager can easily perform a capacity analysis. This makes it easier to bring in or cut resources to make the project more profitable.

- Time reporting

Project tools for quickly and easily entering hours worked in real time make it faster to produce an accurate invoice basis. The risk of hours disappearing is reduced. At the same time, there is a clearer overview of how much time is spent on the project while it is ongoing. If the project tool is cloud-based, employees can easily enter their hours, wherever they are, for a quick and accurate basis.

- Customer management

Collecting and sorting all customer information provides both better sales support and more control over projects. When relevant information is collected, it is also easier to give the customer a personalized treatment and tailor-made offers. Something that leads to higher customer satisfaction and profitability.

- Invoicing

Whether you work with billed hours or productized services, invoicing is a gap that can consume a lot of time and resources. By automating the invoicing processes so that the data is taken directly from the project management and then compiled and sent out at the touch of a button, you get rid of a lot of cumbersome administration. If you integrate the process with the accounting system, you eliminate even more and get a super streamlined routine that saves a lot of resources.

- Business insights

Thanks to real-time generated reports based on project profitability, resource management, revenue, etc. it is possible to monitor, analyze and evaluate all projects and see what is most and least profitable. With a clear and accurate basis, it is easier to make wise business decisions that lead to more profitability.

A project tool just for services

Visma.net Project Management is a project tool specially adapted to service, consulting and project companies. It brings everything together in a common solution so that you can work smarter and more profitably. The system is web-based, so you can quickly get started and work wherever and whenever you want. An open API also allows you to integrate your own solutions into the system.

If you want to know more about Project Management and how you can work more efficiently and more profitably, talk to us at Traventus and we will help you!