When customers win, your business wins
Services as an Investment Center
Your services team should not just be about utilization and margin targets
Mike Griggs
8/21/20262 min read
Services Is Not a Cost Center
There’s a hard truth about Professional Services that I think a lot of companies get wrong:
Services is not a cost center.
At least, it shouldn’t be.
Yes, Services has to care about utilization, margin, delivery efficiency, and headcount. We should absolutely run the function like a business.
But if that’s where the conversation ends, we’re measuring the easiest things to measure instead of the things that actually matter.
Services sits incredibly close to the customer.
We see where implementations get stuck.
We see which integrations create friction.
We hear what customers struggle with after the sale.
We know where the product creates operational complexity.
We see the opportunities to expand adoption.
And, perhaps most importantly, we often know why a customer will either become a long-term advocate or start looking for an alternative.
That makes Services much more than the team responsible for delivering what Sales sold.
Done well, Services can be a growth engine.
It can accelerate time-to-value.
It can increase product adoption.
It can uncover expansion opportunities.
It can strengthen customer relationships.
It can identify product improvements.
It can create repeatable implementation models.
It can build a powerful partner ecosystem.
And increasingly, it can use AI and Agentic capabilities to fundamentally change how technology is implemented and supported.
The irony is that we sometimes ask Services to prove its value while simultaneously treating it like an expense we need to minimize.
That creates the wrong incentives.
If you optimize Services exclusively for utilization, you may end up maximizing billable hours instead of maximizing customer value.
If you optimize exclusively for margin, you may underinvest in the capabilities that make your product easier to buy, implement, adopt and expand.
The better question isn't:
"How much does Services cost us?"
It's:
"How much value does Services create across the entire customer lifecycle?"
That's a very different conversation.
And I think the next generation of Services leaders needs to own that conversation.
Services should be accountable for its financial performance. Absolutely.
But we should also be accountable for customer outcomes, product adoption, revenue expansion, speed to value, partner scale and the intelligence we bring back into the business.
That's how you turn Services from a delivery organization into a strategic growth function.
🥃 Hard Truth
If your Services organization is only being measured on utilization and margin, you probably aren't getting everything you could from it.
The best Services organizations don't just deliver the product. They make the product more valuable.
That's the real Happy Hour thought for this week.
What do you think? Is Professional Services still treated as a cost center in your organization, or has it become a true growth engine?
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