The decision to embark on a digital transformation initiative can mean different things to different people. In practice, the concept means to develop a thoughtful strategy for using technology in any number of areas: to support clients, fuel product innovation, offer new services, disrupt operating models, and create new ways to attract, develop, and retain employees with the right skills.
Professional and business services firms can make considerable revenue by helping their clients embark on a digital transformation journey, but sometimes they don’t spend enough time thinking about how they can better leverage technology to improve their own business. According to our global research study at Workday, 48% of professional services firms agree that their own KPIs are not reflective of the digital era in which we are now operating.
If you’re in the industry, consider these five key business areas that, when not digitized, can be disconnected, time consuming, and rigid.
The challenge. At many organizations, planning occurs once a year and in silos; at other firms, it happens only when executives request it. A big problem with this approach is that in reality, assumptions should change as the business changes.
48% of professional services firms agree that their own KPIs are not reflective of the digital era.
As an example, headcount planning is typically separated from other financial data, such as revenue opportunity, costs, and profit margin, and many firms lack the ability to understand the specific skills they will need in each service area. Traditional bottom-up planning is a disconnected process with limited data and dimensionality; with this method, most firms focus only on high-level planning, making big assumptions for full-time equivalent (FTE) and worker-type levels.
The solution. Link planning processes into end-to-end operational processes. For example, source headcount planning from actual job roles, talent profiles, worker skills, and recruiting requisitions, and incorporate financial impact assessments—also sourced from project and financial systems—directly into this analysis. With digital planning processes, you can focus on active planning, which pulls from more live data sources, reflects the operational cadence of the business, and connects more participants into the process. Taking the headcount planning process further, this would enable you to bring in service lines, recruiting, and human capital.
With high attrition rates in professional services ranging from 10% to 25%, it’s important to engage the talent you have.
“These are disruptive times,” writes Doug Henschen, vice president and principal analyst, Constellation Research, in “Why the Digital Era Demands Agile Planning.” “Companies not busy innovating are likely doing their best to fend off new competitors. When they’re trying to innovate or respond to change, they need visibility into business conditions and solid planning and forecasting. They need what-if analysis to test new business models and gauge the impact of new products and services.”
Organizations of all shapes and sizes can adapt the way they create, plan, and execute operational strategies in response to a rapidly changing environment.
The challenge. The top reasons people quit their jobs are boredom and long hours, according to a survey cited in Fortune. With high attrition rates in professional services ranging from 10% to 25%, it’s important to engage the talent you have.
Firms also struggle to identify and utilize the existing skills in their workforce. You may very well have the expertise you need, yet are unable to surface those skills and match them with relevant opportunities.
The solution. To develop and nurture talent, have a digital employee engagement strategy backed by continuous learning and guided career journeys.
In a survey conducted with LinkedIn, HR thought leader Josh Bersin found that “employees who spend time at work learning are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more ready to take on additional responsibilities, and 21% more likely to feel confident and happy.” That’s why, in addition to traditional compliance and corporate learning requirements, companies should invest in continuous learning programs that are on-demand, personalized, and designed for professional growth.
To help guide employees in their careers, provide a digital foundation that arms them with information about career paths, mentoring opportunities, and mobility across different services lines and even geographies. That includes establishing talent marketplaces that allow every employee to access new opportunities.
Employees who spend time at work learning are 39% more likely to feel productive and successful.
To gain greater insights into existing in-house skills, look for validated data sources relating to employees, projects, learnings, and courses that showcase workers’ skills—advancements in digital credentialing can make the process of gathering and maintaining this data easier.
The challenge. If you hold a leadership position at a professional services firm, you’ve probably put names on a whiteboard, or in a spreadsheet, to assign workers to projects. You may have found you don’t have complete insight into the right people for some jobs and their availability, or even what projects should have priority.
The solution. Get your resourcing process online and integrated into your HR, financial, and planning systems. This gives you a fuller view of availability (including project assignments, paid time off, leave, and global holidays), project requirements, and the specific skills of your workers. This will create tremendous potential for resource forecasting, digital matching solutions, and talent optimization.
The challenge. Business success depends on having a clear understanding of profitability across service lines, customers, and regions. A key missing component of profitability analysis for professional services businesses is project-level profitability. Historically, project profitability has been disconnected from financial planning and reporting processes. When project managers use spreadsheets or local project execution solutions for project financial tracking, others lack the operational insights they need to understand the drivers of business performance. This hinders assessment of profitable engagements and customers.
The solution. Make tracking project profitability standard practice, and an important KPI. Incorporate it as a key component of your professional services automation (PSA) process. Once established in a connected PSA system, you can track costs and revenue in real time, as transactions happen. (Think time, expenses, payroll, and contractor invoices that drive both revenue and cost calculations.) Such a system allows you to bubble up project-level financial data into planning and increase real-time metrics visibility for each service line.
The challenge. It’s difficult for many firms to have visibility into their end-to-end, contract-to-cash processes. Symptoms of manual and disconnected monetization processes include one-off contracts, spreadsheet-based pricing, invoice confusion, revenue leakage, and lengthy close processes. Firms may also lack the agility required to develop innovative new service offerings.
The solution. Digital monetization offers immense opportunity, but it needs to be holistic and agile, which are fundamental benefits of cloud-based technology solutions. You should also minimize the number of touchpoints and solutions; for example, focus on customer-facing (CRM/CPQ), operational (PSA), and financial processes, and reduce touch-points around a primary process owner (such as the project owner or billing specialist). Once you have a more streamlined contract-to-cash process, the opportunity to innovate and support new revenue streams becomes easier. This also represents a significant opportunity to drive new business models.
Successful professional services firms can do many things right, from delivering projects on time to maintaining high client satisfaction rates. One reason firms get high marks on such KPIs is that they have the technology in place to support automation, data-driven insights, and better decision making.
Digitizing key processes across an organization makes it more agile and streamlined, freeing up your talent to focus less on manual tasks and more on meaningful work that propels the business forward.