Data Consulting

Productizing data services: Removing fears with the LEAP framework

March 6, 2024
12:00 AM
Data Consulting
By Sven on March 6, 2024

“It was a bloody mess!”

That’s how the founder of a data consultancy described his first stabs at productization.

What is productization? Developing a productized service is a common business model for data consultancies. From the client’s perspective, a productized service is a bespoke solution to their problem that comes in a packaged form, including a set price and often a subscription model. From the consultancies’ perspective, it is a package comprising 2/3rds of prepackaged, automatically delivered work and 1/3rd of customizations done specifically for the client.

Data consultancies are looking to productize first and foremost because growing profits means hiring more talent, and that’s hard to get and compete for. By creating productized services, they increase their profit margin and are set to scale their businesses.

But productization can be scary as hell!

The founder quoted above stopped after the first try, taking a step back from the idea of productization, even though he felt the pain every day.

What you get from this article is an antidote to this fear, we call the LEAP framework, adapted from the company Vecteris. First, we’ll dive into the unique fears that data consultancies encounter, and then we show you how you can apply the LEAP framework to fight those fears.

The unique fears for data consultancies

Data consultants work in a very special field. On top of the usual consulting business peculiarities, they have their hands deep in the intestines of their client organization, touching all kinds of vital organs. Just imagine a leakage of the data you’ve ingested into a data warehouse. They also usually don’t have product managers on board, making it a bigger leap to take the step to develop their own product.

Let’s look at the significant fears we’ve heard about on calls with consultants.

Fear of Failing Slow – Let me tell you the usual story of how productization projects in data consultancies usually fail. The founders decided productization sounds like a good idea. So they are looking for someone to develop a demo, a prototype, or a pilot project. Who’s the person they usually come up with? The juniors, the new joiners, the ones who aren’t staffed 150% on projects. The juniors use their spare time to develop a simple prototype, use a few minutes to have calls with clients, and then conclude it might work if they have more time. A process that usually takes 6-12 months.

In essence, they fail slowly. Not fast, or not at all. Data consultancies are aware of this, and still, a lot of efforts end up just like this, a slow fail, without a clear result, and definitely no product innovation.

Fear of Data Breaches – With their fingers deep inside a clients most sensitive data, security and data privacy are key to the reputation of any data consultancy. You can do a lot on the credentials front. To safeguard those, we even wrote up 7 effective ways of securing your credentials. But what is much scarier is being responsible for the technology handling the data. Be it the ingestion, transformation, or storage side. The thought of developing something that is fail-proof is scary to data consultancies that usually don’t have to put up with this scrutiny.

Fear of Outages – A related fear is uptime and data uptime. If you rely on your clients software and on managed services, it’s easy to put the blame for any downtime on those services, and usually those will truly bear the fault. But if you develop something on your own, you carry the weight even if it is just a wrapper that malfunctions.

Fear of Not Being Able to Ship – The technology of the modern data stack isn’t built for multi-tenant support, for whatever reason. Multi-tenant support is the key feature data consultancies end up building when starting down their productization journey. But, since the technology isn’t up for the game this is a true challenge and produces fear, especially in data consultancies that usually lack product managers able to build products fast.

But while all those fears are scary, there is a way past them.

Overcoming Fears with the LEAP Framework

The company Vecteris focuses on productizing generic professional services, so we adapted their framework to the data space. We used the hundreds of discussions we had with founders on this exact journey to help you jumpstart your own.

The Arch LEAP Framework consists of four pillars, all of which you’ll need to activate when starting out your productization pilot project:

  1. Leverage Existing Strengths
    • We recommend you either leverage your expertise in a particular industry (like governmental contracts), your expertise in a certain tech stack (like Tableau, PowerBI, dbt + looker,…), or your expertise in a certain use case (like optimizing marketing ad spend).
    • Leveraging existing strengths essentially means narrowing down. By narrowing down, you’ll fight two fears at once. A smaller product will be built faster. By using your expertise you’re more likely to already have a good tech stack in mind to use for your product, thereby reducing your fear of not being able to ship.
  2. Engage with Customers Early
    • Your client base, and your prospect base are a strength! You already have way more exposure to your market than a random startup, so use that. Involve both, potential users inside your existing client base, and in your prospect base.
    • By talking early to the potential customers of your productized service, you’ll be able to speed up development again and ship faster.
  3. Adopt a Learning Mindset
    • Adopting a learning mindset will be hard. Because this particularly involves learning to deal with outages and data loss. It’s important you accept the chance of these things happening while developing & prototyping (not for your final product!) Encourage a culture that sees feedback and iteration as essential to creating successful data products.
  4. Prioritize and Execute
    • Focus on developing one or two key products based on the consultancy’s most substantial competencies and market needs. But also, prioritize data quality and protect your clients’ data. In our experience, once you make data quality and security a priority, at least the fear of it will go away – albeit not the challenge of making sure it is met.

Blue Margin Takes the LEAP

The data consultancy Blue Margin is a Colorado-based business that focuses on Power BI-managed data services.

And they have taken the LEAP.

Let’s go back in time. Back in 2011, Blue Margin started out as a digital cloud consultancy, selling all things cloud related, consulting, setup, strategy and workshops.

But gradually over the next three years until 2014, they transformed into a Microsoft Sharepoint and Power BI consultancy. They likely engaged their customers early, seeing their need for Microsoft-related business software back in 2011.

They must’ve seen the potential power of productization because, by 2019, they had started to leverage their existing strength in Microsoft Power BI to develop a productized service; they narrowed their client base just to Power BI users and made security a first-class citizen of their new offering.

But they didn’t stop there. They kept their learning mindset, developing new productized services targeted at specific industries like the manufacturing sector with their “Manufacturing HQ.”

Blue Margin has taken a LEAP, and so can you. Are you up for it? If yes, then the Data Consulting Club is a good place to start your journey!