Coase, Product Companies, and Professional Services

So how does this entire discussion of Coase´s theory relate to my favorite topic: professional services at a product company? Currently, Professional Services is one of the rare functions that product companies can not outsource. Product companies may heavily partner in this space with outside system integrators, but that is not true outsourcing. If a product company determines they need a professional services capability within the company umbrella, the only option currently available is to "make" that capability. This means hiring the management team to manage it, staffing delivery personal, implementing business processes, and investing in I/T infrastructure. Unfortunately, many product companies struggle to manage this capability. Which presents a real dilemma for product companies that are being pressured by customers to provide “consulting services and turnkey solutions.” As a product company, you don’t have the option to easily buy this capability. If you decide to build it, you are just as likely to lose money as make it. And if you do nothing, you risk losing customer to competitors that can provide complete solutions. Not a pretty state.

from the article: Coase, Product Companies, and Professional Services by Thomas E. Lah

 Back to Top