‘That’s not a revenue model’: firms stuck in factory age, says Tim Williams | Financial Review

That costing model is driven by a Karl Marx-inspired labour theory of value, and Williams argues it’s economically unsustainable. So much so, he predicts within the next decade very few firms will price on billable hours.

“Accountants would go into a factory and count the cost, and the owner would work out cost-plus pricing. That’s not pricing, that’s just costing.

“In the past 20 years, there’s been an explosion in pricing innovation. There’s tremendous creativity. Even Disneyland has varied pricing. You can subscribe to a Cadillac. Rolls Royce don’t sell jet engines, they sell uninterrupted flying time.

“Professional services are alone in having missed the pricing revolution. They’ve instead chosen to stay in a paradigm.”

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‘That’s not a revenue model’: firms stuck in factory age, says Tim Williams | afr.com.