The partnership between advisory firms and big tech platforms like Oracle's Workday and SAP's SuccessFactors has long been a cornerstone of enterprise software implementation. However, this relationship is increasingly unbalanced.

Advisory firms shoulder the heavy lifting - managing the sales process, implementing complex systems, and ensuring client satisfaction - only to see the long-term recurring revenue flow exclusively to the software companies. This model, a relic of an era when software development was prohibitively complex and costly. This no longer reflects the realities of today’s tech landscape.

Modern software development has become faster, more efficient, and less resource-intensive, as evidenced by recent staff reductions across major tech companies like Microsoft, Meta, and Salesforce. These layoffs highlight how advancements in AI, automation and cloud-first architectures have significantly reduced the costs of development, maintenance, and support. While software companies enjoy exponential growth fuelled by recurring subscription revenue, advisory firms remain tied to a service-based model that yields only incremental growth. To keep up, advisory firms must sell more and deliver more each year, a cycle that highlights the revenue disparity between the two industries. Software companies often achieve revenue per employee figures in the millions, while advisory firms lag far behind.

A new model is emerging to address this imbalance, exemplified by REACH LX, a human-centered AI-powered platform developed in Australia. Unlike traditional partnerships, REACH LX offers a revenue-sharing model where advisory firms retain 50% of the ongoing revenue in addition to the implementation and advisory fees. This approach not only rewards advisory firms for their critical role in selling and deploying the solution but also creates opportunities for ongoing advisory work. By leveraging the data generated by the system, advisory firms can deliver intelligent, value-added services that deepen their client relationship and build a moat around their client.

The 50% of subscription revenue-sharing model gives advisory firms the chance to achieve exponential growth alongside software companies. With recurring subscription revenue and ongoing advisory opportunities, firms can break free from the constraints of a time-for-money model. This equitable partnership reflects the efficiencies of modern software development, where costs are lower, and the true value lies in the intelligent application of technology. In today’s world of work, advisory firms deserve a share of the recurring revenue they help generate—because their expertise brings the software to life.

For more information on REACH LX and partnership opportunities, contact Paul Findlay to discuss a modern advisory and tech partnership to increase your subscription and recurring advisory work.