Professional services firms have made significant progress in their digital efforts, but there’s still work to do. In our latest executive survey, key findings reveal where the industry needs to go.
The industry-specific findings are in from our latest global survey, "Organizational Agility: Roadmap to Digital Acceleration." We intended this to be an expansion and update to our original "Organizational Agility” study, but as it happens, the survey took place in July and August 2020, when most companies were decidedly not doing business as usual. However, we examined how companies around the world were dealing with the business implications of a global pandemic.
Professional services organizations are outperforming other key industries in important agility indicators, yet they still have a lot of work to do when it comes to digital transformation. This is because digital transformation, like many things, has been accelerated by the pandemic. Transformation projects with yearslong timelines are now just too slow. To ensure they can keep pace with ever-changing, ever-expanding needs, professional services organizations must accelerate their digital efforts.
We discovered that professional services companies outperform other key industries in agility indicators around adaptability, skills, empowerment, and measurement. However, the professional services sector falls behind others in aligning technologies with its digital transformation objectives, which is a key enabler for agility.
We collected written input from 1,024 respondents, including C-suite executives and their direct reports, and we interviewed 15 senior business executives, C-suite leaders, and transformation experts. Survey participants were from 14 countries and 12 industries. Breaking it down by industries, 18% worked in financial services, 15% worked in professional services, 10% worked in IT, and 9% worked in retail. The survey measured facets of the five key characteristics of organizational agility:
Responsiveness. Organizations that are responsive are more adept at continuous planning and driving change.
Adaptability. Fluid organizational structures and processes boost agility by allowing organizations to use existing resources to adapt to emerging requirements.
Skills. Agile leaders have plans to upskill the majority of their workforce, push specific initiatives to increase employee engagement, and attract top talent.
Empowerment. Employees can make better decisions when they are empowered with timely and relevant data access.
Measurement. To effectively manage their digitally driven initiatives, organizations need tools and processes for continuously measuring performance.
The following four truths remained consistent in our survey results across industries and regions:
Digital revenues dominate and are accelerating. When firms were asked whether they expected 75% or more of their revenue to come from digital sources within the next three years, 36% said yes. Last year, only 12% of firms expected 75% or more of their revenue to come from digital sources within three years.
Smart technology is driving digital growth. Organizations that are deploying artificial intelligence (AI), machine learning (ML), or robotic process automation (RPA) are more than twice as likely to report high levels of digital revenue as those that have made little or no such progress.
Changing tools is easier than changing minds and habits. While more than half of organizations (56%) say their technology is compatible with digital transformation goals, just 16% say the same about their company’s culture. Adopting new technology to streamline workflows and help employees in their day-to-day roles is critical for organizations to realize their technology ROI goals.
Agility builds resilience. One-third of leaders agree that faster digital growth improves organizational resilience, especially in the face of crises. For example, organizations that rapidly responded to the pandemic were more likely to have embedded agile capabilities such as data accessibility and cross-functional collaboration.
So how do survey results from professional services respondents align with the other findings? When it comes to three-year digital-revenue projections, professional services is in the middle of the pack of all industries for bullishness on digital revenues. Professional services is behind retail and financial services, the other two industries where we did a deeper dive:
Professional services organizations are leaders in terms of adaptability, skills, empowerment, and measurement. That’s because they are more focused on pursuing digital transformation and agility through team structures, employee skills, and cross-sector collaboration. For example, compared with the other deep-dive industries, professional services firms report high levels of:
Alignment among their objectives, their models used for planning and operational analytics, and their organizational and team structures.
Employee engagement in discussions about workforce transformation and cultural change.
Continual improvements to workflows and processes.
Employees working on cross-functional teams to deliver projects at speed and scale—and ensuring that key capabilities are embedded within teams.
Use of budgets and existing resources to retrain and upskill existing employees.
The industry’s capabilities in adaptability, skills, empowerment, and measurement could also explain why professional services firms rank No. 1 among the focus industries in taking an agile approach for measuring outcomes:
Taking these findings a step further, when it comes to enabling continuous planning, professional services firms have identified upskilling, reskilling, and recruiting as the key enablers, while other industries improve responsiveness by boosting data access and adopting smart technologies:
To compete, professional services organizations will need to increase their adoption of smart technologies including AI, ML, and RPA, and they should also take a strategic look at their overall IT structure and how it facilitates goals. To test out technology options including AI, Fin Goulding, an agile expert, business coach, and author, suggests looking at cloud-based, as-a-service models. “One of the key areas that perhaps businesses aren’t even aware of yet is AI-as-a-service. One of the things that companies get bogged down by during technology implementation is finding the people with the skills to do the complicated work. Now, organizations will be able to leverage what startups are doing using their platform to solve business problems or hiring small companies to do it on their behalf,” he told us.
To learn more about the survey results, how the professional services industry compares with others, and key insights from C-suite executives, read the full report, "Organizational Agility: The Roadmap to Digital Acceleration."
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