In this episode of The Consultant's Way Podcast, hosts Dean McMann and Anthony Paluska interview Brian Freeman, Vice President of Professional Services at Zywave, a SaaS InsurTech company. With 25 years of experience, including 12 years in Big Four consulting and 10 years in SaaS professional services, Freeman discusses the shifting landscape of professional services organizations.

Freeman explains how the industry has moved from a hypergrowth mindset to focusing on profitable growth over the past two years. This transition has placed greater emphasis on professional services organizations as key contributors to driving profitable growth. He emphasizes the importance of viewing professional services as a "business inside a business," with its own products, marketing, pricing, and delivery mechanisms.

The conversation delves into the challenges of achieving profitability, including the need for executive alignment, particularly with the CEO and CFO. Freeman stresses the importance of measuring both leading indicators (like services bookings) and lagging indicators (like margins) to track progress. He advocates for breaking down profitability metrics by different offers and project levels, while acknowledging that imperfect data shouldn't prevent organizations from taking action and testing hypotheses.

Freeman also discusses the evolution of professional services teams from being primarily implementation-focused to developing more comprehensive business development and sales capabilities. He emphasizes the importance of quantifying opportunity costs when making strategic decisions about which services to offer and how to price them.

The episode concludes with three key takeaways: the critical nature of executive alignment on both high-level strategy and detailed execution, the importance of establishing and tracking leading and lagging indicators, and the need for professional services leaders to identify and address knowledge gaps by leveraging internal resources and external networks. The hosts note that this conversation only scratches the surface of the complex journey toward professional services profitability in the SaaS industry.