VS1 Cloud Blog
To thrive in the post-Covid-era, professional services firms will need to take a dose of its own medicine writes Unit4 Vice President Mark Gibbison – work smarter and adopt a technology-enabled operating model.
The professional services industry will be irrevocably altered by the Covid-19 pandemic. Clients have been sparked into new ways of working and will be looking for services partners to fulfil different needs and behave in unaccustomed ways. They have learned a lot in their year-plus of living differently.
The buy side today is savvy and capable of self-service after having been forced to turn inward for rapid and transformative change. The delta between what third-party experts can deliver to enterprises and what they can do quite well themselves has shrunk markedly.
The net result is that professional services organisations will need to work smarter to survive and thrive and this will require both defensive and attacking measures: that is, both efficiencies and new, often technology-enabled offerings.
On the defensive side, the ability to protect revenues by quickly and accurately recognising it will be key so companies need to ‘give billing a grilling’. Dynamic billing systems that can easily (or automatically) adapt to changes will be a huge part of the future success of professional services organisations and those stuck with recalcitrant systems will miss out.
Logistics will have to be just as flexible as the new billing. The ability to identify resources, locate them, check availability and reschedule is crucial, not just across single entities but across multiple clients and across sub-brands. That sort of broad but granular resource control will mean that professional services organisations get maximum bang for buck without over- or under-resourcing, downtime or lack of service.
And again, if resources can’t be quickly marshalled, recalibrated and re-routed, then there will be a high price to pay, both for firms and unfortunate clients.
Seize the day
But if a professional services firms already has these modern essentials in place, what can it do to differentiate itself from the pack?
Although much talked about, making full use of artificial intelligence, machine learning and robotic process automation to take out manual inputs is still rare. Early-adopters have vast opportunities to pass on rote and repetitive tasks to bots and let people take on the more interesting and creative tasks where humans excel.
Why fill in a timesheet that’s 95 per cent the same as the previous week if you can get a bot to do it for you faster and more accurately, leaving you free to focus on higher-value work? Why not have approvals requested by software that analyses your calendar and understands the nature of the task and ancillary information and necessary processes that go with it?
Consultancies need to move to a world where consultants can interact with IT systems as part of the operational fabric, without having to be always proactively inputting and engaging with those systems.
Staff recruitment and retention is a challenge for any knowledge economy company and few sectors have this issue writ as large as in the services sector. Human capital management will play a bigger role than ever here and firms are going to need to recruit smarter. Using artificial intelligence will help to identify candidates and to streamline the interviewing process.
The same can be said of onboarding and then tracking satisfaction and motivation after recruitment to address the ‘can’t find them, can’t keep them’ conundrum.
Another area where professional services firms (like other sectors) need to urgently address opportunity and risk alike is in their use of data. It’s obvious that they should see data as a critical advantage and make optimal use of their ability to share insights, compare and contrast across clients and stay on the right side of compliance lines.
For all the talk though, the fact is that most organisations still have data sat in disparate systems and silos. Eventually, that information has to be integrated and the companies that haven’t slammed on the brakes of IT spending will be best placed to mine insights.
The human factor
Learnings from the pandemic will help professional services organisations and particularly their rapid responses in operating remote workforces. Successful transformers saw immediately the value of taking regular checks not just on productivity but also on the wellbeing of staff. That sort of empathy and less countable activity should apply to clients too and will need to be factored in for firms to be trusted partners of organisations and to compete against lowest-cost rivals. Purely transactional relationships based on KPIs and targets won’t cut it.
The human factor will in general play a larger role. It’s indisputable that people who feel respected and capable will outperform for their companies. Clients that feel firms have taken the time and trouble to go beyond SLAs will feel the same. The old thinking that what doesn’t get counted doesn’t count is outdated. It’s hard to put a figure on the value of a company going out of its way to offer payment holidays or add extra support hours at short notice but the value exists none the less.
I see the human factor also being reflected in the way that professional services firms measure themselves. The traditional hard measures such as billable hours and hourly rates may need to be softened. It may be that we reach a point where firms operate in a way that is more like today’s public sector or non-profit sector and overall outcomes based on shared risk and shared reward play a bigger part.
People have talked about shared risk/reward for decades of course but the pandemic may have been the catalyst that pushed this over the edge form ‘nice idea but…’ into reality.
I expect more granular contracts with shared upfront investments too and results will be more measurable and transparent because services are broken down to the nth degree by software microservices.
The time of pandemic will be looked back on as a crossroads in many ways. The days of showing up at customers sites for no reason other than to demonstrate physical presence are gone, and good riddance to them unless there’s a practical reason for being there. More work than ever can be done offsite and that delivers value in both directions. Meetings are important but in-person presence needn’t be the bread and butter of advisory work.
Analyst at Constellation Research, Dion Hinchcliffe describes the outcome of this evolution as “a new type of professional services organisation… that is more agile, lean, digitally infused, and experience-centric”. That sounds about right. For businesses, whose traditional role has been to advise their clients on how to improve and evolve, the services industry now needs to take a dose of its own medicine.