Consulting vs. Professional Services

I had a meeting yesterday with the VP of Consulting for one of my companies. The ostensible agenda for the meeting was to discuss how to accelerate their consulting / professional services business, which is a small, but growing and highly relevant part of what they do.

As we got into the discussion, I realized that the construct of “consulting and professional services” was bothering me. A pet peeve of mine is that “consulting” and “professional services” are fundamentally different things, even though many people and companies interchange them. I once had a company that had a group called CompanyX Consulting and Professional Services – I could never figure out why we didn’t call it one thing or the other (CompanyX Consulting, or CompanyX Professional Services.)

Professional Services is easier to define – in my little universe it’s what software companies do to implement and support their software products. One of my companies – Channelwave – provides professional services as part of their PRM software product. When you buy Channelwave’s PRM product, you also purchase professional services from them to help deploy and implement their product. This activity is almost always in support of a pre-existing product that addresses a well-defined need.

Consulting is a little harder to define, partly because it has a broader range. One of the large clients of my first company (Feld Technologies) was a strategy consulting firm – they typically did work for Fortune 1000 companies. Some of the work was high-end, CxO level consulting and business transformation (before that buzzword became popular) – this was clearly consulting. The Feld Group – now part of EDS – provided “CIO outsourcing” work to Fortune 100 companies – again – clearly consulting as Feld Group took responsibility for managing and running the IT organization for an F100 company.

It gets tricky when you mix both Professional Services and Consulting within the same company. Return Path has a young consulting group (which they refer to as strategic solutions) that helps companies understand how to be more effective with their email marketing. This is not in support of any specific Return Path product, yet in encompasses all of the capabilities that Return Path can bring to a customer, along with others from Return Path partners and complimentary providers. However, within Return Path’s Delivery Assurance products, there is a professional services component – as many deliverability customers want help interpreting and understanding the information they are getting as well as learning how to take action on it. In this case, there’s a clear consulting group that engages with customers independent of the specific products that Return Path sell and a professional services group that helps support the specific Return Path products being used by their customers.

The nuance seems important to me – especially given how severely I react to the phrases being mixed casually. I’m curious how y’all think about this – please comment freely (hence providing me free consulting.)

  • You are right about consulting being a very different business function from professional services but in its pure form, it also should be separate and unrelated to software product. I spent a number of years at IBM as part of the IBM Consulting Group. Interestingly, IBM mixed the consulting and professional services disciplines at least at the highest level within IBM Global Services. The Consulting Group was created and lead by a guy named Bob Howe. Bob was from Booz, Allen, Hamilton and he created the IBM Consulting Group in the same style. We wanted to compete with the top tier consulting groups, like Booz, Mckinsey, E&Y, PWC, etc. Being part of IBM, it was vital we maintained separation of our consulting practice from pro services and product elements of IBM. For the consulting practice to maintain integrity it must maintain impartiality. The belief being, your credibility as a consultant has to be questioned if you are tied in any way to a pro services or product that you might be recommending as part of your report.
    Consulting disguised as sales of professional services or product is not consulting but it is not inherently bad either. Customers regularly know generally what they want but just as regularly need and want help from software and pro services cos help them figure out what they really need and how to get there. The challenge for product companies like a Return Path, NewMerix, et al is that they are sufficiently focused on growing their product business and the services component is part of the means to that end. As a result the consulting process can loose sight of the broader business issues. Your description of Return Path shows they are keeping perspective but myopia can seep into consulting groups tied to product groups and they can begin to have a world view with their product at the center.

  • Brady Bohrmann

    Nuance matters because words matter. Mark Twain once wrote “The difference between the right word and the almost right word is the difference between lightning and a lightning bug.”

  • Re:Consulting vs. Professional Services

    Brad posted and interest blog on the nuances in defining “Professional Services” and “Consulting”. As a VP of a consulting firm, this is a very important disctinction to make, not only from a business model perspective, but from a potential…

  • Ross A. Santos

    There is a fine line… I’m not sure that the line blurs from one side to the other when you consider different industries.� Think of accounting software manufactures and the companies that sell/distribute.� Those companies that distribute are generally integrators (another term that probably bothers you), they can be anything from a network consultant to software developer to account who thinks he is a programmer.� I’m not sure there is much difference between a consultant, integrator, professional service, it really all depends on what the market “likes” to hear the service called.

  • I generally agree, but I think the distinction is cleaner in product businesses than services businesses.

    For example, as Brad says, we do have a professional services component to our Delivery Assurance business to help clients interpret the data we provide them and guide them on implementing some obvious solutions (e.g., “enable your outbound email servers for reverse DNS lookup).

    However, frequently the data will point to more systemic, upstream problems with the way the client handles some of the more creative aspects of its email program (e.g., “you send too many campaigns each month and your consumers are complaining as a result”), which calls for more of a consulting solution.

  • Dave Jilk

    I think the main reason they are typically connected is that they usually have the same BUSINESS MODEL (c.f. your previous post) of selling hourly/daily labor at a time-based rate.

  • Mike

    I think the confusing word is “Professional Services”. My plumber provides “Professional Services”, but a software company provides either Implementation services or Implementation consulting which is different that “Consulting”

  • The difference is that consultants have to charge more to get people to take their advice than professional services people. 🙂

    (Also that there is a verb for what Consultants do, but not for what Professional Services do.)

    More to the point, in my terminology Consultants offer (business) advice, System Integrators implement it (even if it is a process change and does not involve technology), while Professional Services are System Integrators tied to a specific product or vendor.

    Not sure if this only add to the confusion…

  • I agree that there is a difference. ‘Consulting’ seems to imply that the client is receiving advice and counsel without necessarily getting any tangible deliverables (other than a notebook of ideas and/or tools). ‘Professional Services’ to me implies that there is a tangible deliverable at the end of the project (i.e., a fixed pipe, an e-learning course, software that works, etc).

    I believe the distinction is important for two reasons. First, clients can better understand where they are in terms of where they are in the solution process (Consulting seems to be on the front-end of a solution, Professional Services seem to occur once a solution has been chosen). Second, clients have a better expectation and clarity on what they are buying.

  • Consulting vs. Professional Services

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  • Consulting vs. Professional Services

    Brad Feld comments that consulting and professional services are clearly different business models, but are today sometimes used interchangeably.

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  • Jim

    Interesting comments and arguably accurate – pro services are different than consulting services. I doubt, however, it's a distinction clients care about, if they even understand it. Companies make a distinction between internal and external resources, and in the latter are often disappointed with services (consulting or professional) often because capabilities are oversold or unclear. However, "consultants" or "professional services" personnel who are capable of adding measurable value and doing so with a minimum of disruption (e.g. no "smartest man in the room" stuff) will find themselves "trusted advisors" and rewarded with the all to rare unqualified positive client reference.

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