[Video] Hear From The Experts: What Impact Will Digital And Emerging Tech Have On Business Models In The Professional Services Industry?
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We recently interviewed 700 decision makers from Architecture, Engineering and Consultancy firms to gain more understanding about industry changes and trends and business opportunities and risks. As a result we identified exactly what’s keeping your peers up at night and what they are doing to keep their firms at the forefront of their industry.
At the recent Digital Leaders Forum we caught up with several industry experts to get their take on several of the core challenges raised in the report. Watch the video below to hear what they had to say on the topic of changing business models in the face of digital change:
Full Industry Report
Professional Services Trends Report 2018
Q. What Impact Will Digital And Emerging Tech Have On Business Models In The Professional Services Industry?
Neil Davidson, VP Enterprise, Deltek
“Digitalisation doesn’t forgo the need to the get the basics right.
We recently surveyed the leading people within global professional services firms. Incredibly, 71% of them didn’t feel like they were getting paid correctly on change requests. 76% of people we spoke to were not getting the reports they needed to make decisions in a timely manner. And 53% of companies weren't able to understand what resource they might need in 3 months’ time - meaning they don’t have that 360-degree view of their pipeline.
Getting those basics right and having the digital backbone in place to have true operational efficiency, where you understand your project margins, and can optimise the cash flow of the business - this is really an essential for a global professional services firm.
When that’s done, there is another key aspect to consider, and that is – what is the innovation strategy?
60% of people we spoke to were clear that having the right client innovation strategy was key to success moving forward. That includes making sure the innovation strategy incorporates big data, artificial intelligence, and the right IOT innovations that are really where clients want to go from a process and value perspective.”
"Digitalisation doesn’t forgo the need to the get the basics right."
Ben Grinnell, MD & Global Head Of Digital, North Highland
I think we’ve already seen quite a big impact on the market for the firms that are providing more staff org or the plain old consultant as they are sometimes called. The dollar rate you can get for this type of service has decreased quite considerably over the last 5 years. This is probably due to the fact that companies are finding it easier to find contractors and people on LinkedIn with the right skills. And they’ve all got access to the internet, which brings them a wide range of methodologies and there’s a lot they can do with that.
You’ve got to differentiate from that market and you’ve got to bring the whole company to bear on a client’s problem. This causes you to rethink the business model. We’ve definitely rethought ours and have been moving away from the country silos you typically find in big professional services firms, to a model where we are arranged globally by expertise. So people belong, not to an office, but to a capability. And that’s where their performance and everything is evaluated. That gives you the depth of expertise in different areas to firstly grow it in a virtuous circle, and secondly, pick up that expertise, take it to a client, improve it, put it back and keep improving your expertise in that space.
If you look at the market, you can quite easily go out and find someone with the right skills and experience you need, so as a professional services firm you need to bring a lot more than that.”
Tom Deacon, Director, Global Head Of Digital, Turner & Townsend
“A lot of what digital technology offers is the ability to add to the traditional professional services model, with more product and knowledge-based offerings to the marketplace. And therefore, in many ways, an easier way to articulate value to the market. That’s going to mean some substantial changes to the business model, because product-based offerings are less people intensive. Or rather they could be additive, but it means there are changes to people and their capabilities that are necessary in order for them to exist together.
There is a lot of concerns that automation, robotics etc. will remove jobs. I don’t think they will remove jobs, I think they will just change jobs. The opportunity in professional services firms is to automate what is repetitious and what is almost commodity and then allow people to move to more value-adding roles. That’s certainly the aspiration we have at my firm.
The business model will need to change and the financials will need to change, to accommodate a blend of products, knowledge and analytics-based service offerings, sitting alongside traditional people-based services.
I don’t think people will go away by any stretch of the imagination, it’s more about allowing them to become more valuable to their clients.”
"The opportunity in professional services firms is to automate what is repetitious and ... then allow people to move to more value-adding roles."
Ross Williamson, Managing Partner, Wipro Consulting
“I think traditionally, however we’ve dressed it up, the business model has been focused on time and materials. And it has often been outcome-based in terms of the economic model. So what we’ve got to bear in mind, is that as the number of hours going into a project reduces – or in other words, as the resources are used more efficiently, in a highly leveraged way, because of automation and technology - how do we charge the client for the value we are bringing? And I think that will drive us down a route of much more shared reward, shared risk models.
But I think increasingly for those firms with a big enough balance sheet, it will mean taking on the primary risk of delivery and that’s a very different world, because then you are into the area of financial engineering and how you can generate a smooth cash flow and certain outcome for the client, and still make money for your partners and your shareholders.
I think it’s going to be an interesting time. I think innovation is going to win out in this space.”
For the full results of our study with 700 decision makers in the Professional Services Industry, download a complementary copy of the report below.
2018 Industry Report
Professional Services Trend Report
- Agency Workflow
- Architecture and Engineering Firms
- Business Intelligence
- Change Management
- Cloud ERP
- Consulting Firms
- Financial Management
- Job Costing
- Legal Sector
- Marketing and PR Agencies
- Professional Services Automation
- Professional Services Industry
- Project Management
- Resource Planning
- Talent Management
- Time and Expenses
- Traffic Management
- Transformational Trends