For decades, the consulting and professional services industry has relied on two dominant commercial models: time-and-materials (T&M) and fixed-price/fixed-scope. These approaches have shaped how consulting businesses operate, how they manage risk, plan delivery, and measure success. But the world has changed. Today, clients need partners who can move with them, not vendors locked behind scopes, hours, and contractual obligations. 

This article explores the limitations of traditional models and introduces consulting subscription as a more adaptive, value-driven alternative better aligned with modern client needs.

The Problem with the Time & Materials Model

On the surface, the time and materials model or contract is simple. Clients pay for the hours and materials required while consultancies provide capacity, expertise, and time.

But beneath that simplicity sits a structural misalignment.

• The service provider benefits from longer timelines: When an engagement runs over, revenue increases. Overruns aren’t always deliberate, but the commercial incentives quietly reward a slow approach rather than efficiency.
  
  
• The burden of value management sits with the client: Clients must constantly scrutinize hours, challenge estimates, and ensure value is being delivered. The consultancy’s responsibility is to staff and bill, not to guarantee outcomes.
  
  
• Conversations become transactional rather than strategic: Instead of focusing on movement toward business goals, discussions often center on burn rates, scope clarification, and effort justification.

Over time, this affects trust, encourages micromanagement, and places both parties in a defensive posture. In an engagement where outcomes matter more than inputs, T&M increasingly feels ineffective.

The Problem with the Fixed Price, Fixed Scope Model

Fixed-price contracts started as an attempt to create a clear output for a clear cost. While this is attractive in theory, in practice, these types of engagements have their own challenges.

• It requires heavy upfront definition: Scope must be locked down early, even when everyone knows that requirements evolve as understanding deepens.
  
  
• It shifts risk onto the consultancy, which responds by padding the price: Contingency budgets, risk premiums, and warranty provisions often inflate costs far beyond the ideal scenario.
  
  
• It discourages agility: When change is needed, and it inevitably is, contracts become obstacles. So clients have to choose between agility and sticking to a scope they no longer believe is right.

The Core Issue: Traditional Models Don’t Support Agility

Both T&M and fixed-price structures reinforce behaviors that run counter to business agility. Some of these behaviours include;

• Rigid upfront commitments
• Misaligned incentives
• Difficulty in adapting to new information
• A focus on inputs and outputs over outcomes
• Governance driven by scope and budget, not value and impact

Consultancies say they want to partner with clients, deliver outcomes, and stay adaptive. However, these commercial models push them in the opposite direction.

This gap has inspired experimentation with new models, including one we have been developing and trialing at Stellafai, which is the consulting subscription model.

Introducing the Consulting Subscription Model

A subscription model is familiar to anyone using Netflix, Microsoft 365, or a gym membership: you continue paying as long as you continue receiving value.

When we apply this to consulting, the subscription model changes the entire relationship, and here’s how:

1. The focus shifts from activities to outcomes

Instead of contracting for scope or hours, both sides align around the client’s desired outcomes and the measures that indicate progress toward them.

These move from being rigid contractual obligations to shared guideposts that shape governance, focus, and prioritization.

2. Value becomes the basis of continuation

If the measures are moving and if the client sees progress toward their outcomes, the subscription continues. If they are not, a conversation happens.

It’s like Netflix, where missing a month of usage doesn’t trigger a cancellation, but six months probably does.

3. The model enables ongoing adaptability

Because scope isn’t locked down behind contractual walls, the consulting team can continuously pivot based on what the client learns, needs, and prioritizes.

This supports truly agile delivery rather than “agile theatre” wrapped inside a fixed-scope agreement.

How the Subscription Model Benefits Clients and Consultancies

Today’s clients want flexibility to adjust work as priorities change, transparency around what is being achieved, and alignment with the consultants they hire. They also want a focus on value and responsiveness to new opportunities and risks. 

A subscription model addresses all of these by structuring commercial incentives around the continuation of value delivery, not the consumption of time. 

Rather than defining success as delivering a scope or burning hours, success becomes whether there’s meaningful, measurable progress toward the outcomes that matter.

While clients appreciate the agility and clarity, consultancies benefit as well. Some of these benefits include a:

• Predictable recurring revenue
• Longer, more strategic relationships
• Less time spent negotiating change requests
• Greater transparency into client satisfaction
• Incentives aligned with client success
• A more consistent delivery rhythm for teams

Most importantly, it places the consultancy in a true partnership role. Not as a vendor executing tasks, but as a strategic ally delivering outcomes.

Want to learn more about how you can use this approach in your consultancy? Schedule a free discovery session here, and we’d be happy to talk you through it.