Professional Services Firms Find New Digital Opportunities
For professional services providers, talent has long been the asset of value. The business model has been simple: Skilled professionals provide services to clients and bill for the time spent. In a digitized world, that model is changing and will likely not survive in its current form as new business models emerge that focus on business outcomes and customer value.
Impact on Professional Services Companies
Forward-thinking professional service providers are looking to digitize core elements of their capabilities to open up new markets. By digitizing expertise, companies can offer a digital knowledge base that clients can search, understand and use immediately. Digitizing certain processes enables staff-intensive work to be automated, scaled and packaged as new services. Finally, by applying established B2C practices, customer engagement will change and the interaction will be consumerized, allowing for more self-service and automation.
Digitization provides the opportunity to rethink service offerings and to drive transparency and price pressure. It also lowers the barriers to entry for new competitors. In this new model, exceptional customer service must continue to be at the center. A recent article for the Wharton School of Business noted that the industry “must confront disruption and introduce new models in order to transform.”
Digitization can transform the industry in other ways, such as offering subscription-based services, outcome-based services or analytics. Many companies are already transforming business models in response to digitization.
Let’s look at a few examples of companies that are rethinking their operations to benefit customers and bottom lines…
Deloitte Cuts Contract Review Costs
Deloitte personnel review thousands of pages of contracts each year. The firm now uses an automated platform to review contract documents which has led to a 50 percent reduction in time spent on these tasks. The automated system can review documents, extract keywords and identify trends. This analysis of unstructured data has a multiplier effect in terms of efficiency gains. In addition, the combination of human and machine review has led to more consistency and better quality. Clients have praised Deloitte for the platform’s ability to point out differences in contracts fast using key terms and they laud the ability to find specific clauses in a bundle of contracts.
IBM Weathers acquisition
IBM’s acquisition of key segments of the Weather Company is a creative use of technology. In October 2015, IBM bought Weather’s B2B, and mobile and cloud-based website, which includes weather.com, Weather Underground and the Weather Company brand. IBM sees opportunity in the predictive forecasting that the Weather properties provide. They expect to combine atmospheric science, computer science and analytics to boost the monetization of Weather’s ad-sponsored consumer and business uses. IBM also plans to use Weather’s forecasting data to drive new solutions in a range of industries. For example, weather information and real-time social media analysis can help retailers fine tune messaging; distributors can gain a better understanding of transportation flows and product availability; and airlines can use the data to reduce fuel consumption, avoid delays and improve airport congestion.
Virtual Law Services
Lawyers on Demand (LOD) bills itself as an alternative legal service provider. The company, founded in 2007, provides legal services through a virtual platform without the overhead expenses of traditional law firms. LOD employs freelance attorneys who are paired with clients. The company provides the technology platform and customer support and markets its services to law firms as well as in-house attorney departments. The company also offers attorneys to complete less profitable transactional tasks which include reviewing title certificates or contract agreements.
Questions to Ask to Find Opportunities
The Wharton article suggests that professional services companies ask four core questions. The answers will inform how prepared the company is for the new digital economy.
- What products and services need to be built to serve our clients better? Technology-driven intellectual property, analytics, and other technologies need to focus on client needs.
- What is our core talent model? Mobile and contingent talent is an increasingly growing opportunity for firms. Cloud-based project management platforms allow for virtual project work.
- Can industry convergence be leveraged for competitive advantage? Firms should determine if partnerships are possible with companies in different sectors.
- What do we need to own? Even competitors may be future partners. Joint business relationships may be the most valuable solution for customers.
The old business model is changing and there is exceptional opportunity for firms to shift their thinking. By offering new digitized services to customers, services firms can find new revenue sources and markets, and those that do not ask the right questions risk being left behind.
Learn more about Digitalization in the Professional Services Industry here.