As soon as 2025, the world’s largest professional services firms could have no employees, thanks to the power of digitalization. Crackpot prediction or a likely eventuality? We’ll soon see, but there’s no doubt that digital transformation is rewriting the rules of success for firms.
The ongoing revolution in the professional services — or ProServ — industry was the topic of the day on a recent installment of Digital Industries: Changing the Game radio broadcast entitled ProServ Providers: New Business Models for the Digital Economy and hosted by Bonnie D. Graham. A panel of ProServ experts convened to discuss what’s happening now and what’s in store for this fast-changing industry — and why a little revolution just might be a good thing for ProServ companies and their clients.
The Business Advantage of Being a Social Butterfly
Even in an industry that’s people-centric by definition, the panel agreed that the future of ProServ organizations is increasingly social. Sites such as Facebook and LinkedIn do more than help ProServ companies create a market presence — they’re also a platform for developing new client relationships and extending existing ones. According to Patrice Cappello, North America Industry Lead for the professional services industry at SAP, “Many hours are spent trying to identify relationships that exist between firms for business development purposes. Professional services firms are leveraging social media to easily uncover those relationships to extend their reach to existing and new clients.”
For Mitrankur Majumdar, Vice President, Regional Head of Services, Americas, at Infosys, engaging on social media is a simple matter of being where the clients are: “Your consumers are always on mobile devices, always on social media. If you are not there, you are not able to hear them, and you are not designing solutions for them correctly.”
Send Me the Bill, but Share the Risk
The ProServ best practice of maximizing billable hours is another longstanding approach that may be going the way of buggy whips and rotary phones. As the industry’s clients become more sophisticated and demanding, they’re asking service providers to share in the risk of an engagement and promise a fixed outcome.
To survive in this new paradigm, service providers need to create predictability in their own processes and outcomes. This is one area where digitization can add real value. By increasing automation and creating repeatable, templated approaches to core processes, ProServ organizations can commoditize certain aspects of their business and focus their talent pool on high-value activities that help them stand out in a competitive market.
Ari Kaplan, principal of Ari Kaplan Advisors, put it this way: “If I can whittle down what I’m doing to a single fee, it gives the client predictability. It allows a shared risk but it also enables the organization that’s providing the service to do it in the most efficient way possible so they can still maximize profit.”
Cappello agreed: “If I can only bill for what I told the client I was going to bill for upfront with that fixed price, I increase discipline within my organization to ensure I deliver that work exactly according to plan. That’s one of the keys to protecting your margin.”
Turning Your Best Asset into an On-Demand Resource
While some processes and practices become more predictable in an era of fixed price engagements, the approach to staffing is becoming more fluid and flexible. “How do you approach a client? How do you understand what a client is trying to do?” asked Kaplan. “Those will all evolve. The idea of a professional providing this service at the highest level isn’t going to change, but the supporting team will be dynamically different.”
Not every engagement requires the same full time skill set, so many ProServ organizations are “Uberizing” their workforce and moving toward a just-in-time staffing pool. By tapping into a roster of pre-approved subcontractors, a ProServ business can fill a role or provide a certain service on the client’s behalf, without carrying the cost of a full-time equivalent.
In this environment of on-demand staffing, knowledge is still the key to differentiating your firm from the competition. As Majumdar stated: “Any organization that focuses on educating their employees on new business models, new technologies, will be the one who will be able to help their own company and consumers through this change.”
Welcome to the ProServ revolution. Fasten your seatbelt.