The Dutch radio station, BNR (English Business News Radio) welcomed Jan van Hasenbroek, founder of IG&H, for the 100th episode of its podcast ‘Baanbrekende Businessmodellen’ (English breakthrough business models). In this episode, Patrick van der Pijl and John van Schagen focus on the revenue model of consultants. Hourly billing for advice. This is how we know it. But there are companies that do it differently. A summary of a few key questions answered during the podcast:
Hourly billing for advice. That's how we’ve come to know the revenue model of a consultant. How have client expectations changed in recent years?
Clients are no longer seeking only advice. So much information is readily accessible nowadays, so a quick online search may already give you an answer, or at the very least provide an impulse on how to solve your problem. What is left for consultants are the truly complex questions.
Clients are also looking for guaranteed results. You must be able to demonstrate your added value, and fast. What does this mean? You should be sure you can deliver on your promises, and then do so. A well-known example is the LCPS (distribution center for COVID patients), a platform which IG&H built in collaboration with the Dutch military in seven days. LCPS was up and running 24/7 and fully automated.
Why did IG&H move away from hourly billing?
Of course, we still do the classic hourly billing. However, the hourly billing revenue model demands that you fill the pipeline. We started thinking about how to become less dependent on short-term projects. The idea is to move past those bursts of 3 intensive months of hard work with a great vision to fill the pipeline…just to see that not all that much has happened two years later. By now, it’s more about (sustainable) solutions rather than short-cycle projects.
What business model does IG&H follow or strive towards?
A client doesn’t want to work with seven different parties but rather with a consultant that can manage things broadly. We therefore consciously started to explore implementation, meaning taking on responsibility for the execution. We began developing our own IP into solutions, which on the one hand offers guaranteed results to the client but also brings about more long-term projects. Now, multi-year projects are the goal. We have contracts for 10 years – which means not just consultancy but taking responsibility for delivering on your promises.
There are 100,000 consultancy parties in the Netherlands. How did you build a 400-people company that can do it all…in 5 sectors?
It starts with letting the client’s needs guide you so you can truly deliver value. It is also important to measure client satisfaction, which IG&H does with the Net Promoter Scores. Once clients started describing our contribution as unique and were enthusiastic to talk to others about it, we knew we were on the right track.
When looking at client needs, we noticed that clients were happy to take our advice but also needed support in implementing it, which they fed back to IG&H. We started building up new capabilities such as software engineers, data scientists, and co. Clients then asked us about security, 24/7 software support, etc. and before you know it, you need to add even more capabilities.
People remain extremely important in consultancy. You must place trust in them. This also means hiring people better than yourself. These people need a space to flourish, which is why being a Great Place To Work has been – and continues to be – one of IG&H’s priorities.
How did IG&H make the jump to building software?
Management consultants talk a lot, giving advice from the side-lines. Helping the business to execute is an entirely different game. We were looking for ways to innovate faster, for instance with AI, data science and low-code. So, we started building our capabilities. This is when you become a digital transformation specialist.
We then asked ourselves whether we could productize what we'd learned, which we did. We built a software unit in Portugal which was vital to creating for example the IG&H retail solution and pension solution. This was an investment and a risk; we didn’t have a reputation as a software provider.
In this rapidly changing world, companies are prepared to invest in guaranteed results instead of advice. Consulting has become asset-based: You need to have your own assets and be able to offer them to clients, helping them realize their ambitions faster. For instance, we unraveled the legacy and legislation present in the pension sector and now sell a pension solution that takes over some responsibility for operations. You give hard guarantees, for instance, that the administrative part will be dealt with, and it won’t cost more than XYZ. That’s one way we gain and maintain trust from the market.
Looking at the competitive landscape, what does IG&H focus on?
We now have an integrated model, consisting of consultancy, software and being an accelerator. At IG&H, we need to run a different race. Therefore, we are focused on five sectors where we can take responsibility and add value.
How do you see your future, Jan, are you busy with your exit strategy?
We have made great strides over the past year. We got a renowned partner on board for our internationalization, and I am going into a supervisory board role. I have a background in consulting - you have to imagine that I managed soccer team for many years, but the game has changed: We are now playing field hockey. Therefore, you must select the coach based on his field hockey skills. We have a new CEO who has much more experience in productization and internationalization. These are the focal points of IGH's strategy.
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