Demand Remains Strong Despite Challenges
Looking at broader professional services trends, Margo Visitacion, vice president, principal analyst, Forrester also presented at Industry Insights Europe, where she discussed some of the key trends impacting service providers. Visitacion pointed to three main modes that companies fall into when it comes to COVID-19 — survival, adaptive, and growth.
Citing research that CEOs and CFOs are pressuring CIOs and business partners to cut tech spending by between 5% and 15%, Visitacion highlighted the specific challenges facing professional services, stating that despite the pandemic she believes there are many positives for the sector.
“COVID-19 is complicating service businesses, but the picture isn’t all together dire,” she said. “We’re seeing it in specific areas, such as a 10% reduction in design services, 17% in administrative services, and 5% in legal, accounting, management and advertising. However, when it comes to government, financial, utilities, telecom, and high-tech, those are holding firm.”
This was clear from Forrester research, presented by Visitacion, which showed that well over half of the 2,678 respondents planned to increase spending with third-party services providers, and only 12% are planning to scale back on investment.
Digital Is Key to Delivering Customer Value
With many companies operating remotely and an overall increased reliance on digital, professional services companies must step up when it comes to delivering value to their customers. According to Visitacion, that means finally overcoming some long standing challenges, such as improving the consistency of data, improving data visibility, reducing financial delays in processes, and delivering better reporting across multiple data sources.
“Some professional services firms still operate in an old school manner. They focus on profitability over customer value. In the past, when there were longer-term relationships, it was easier to focus on profitability,” Visitacion said. “But today, every project goes out to bid. Businesses want to get the best value for their money because their own competition is so fierce.”
System of Record Is Cornerstone of Collaboration
Citing a need to move away from disconnected systems in order for professional services businesses to boost collaboration both internally and with customers, Visitacion spoke of the need for a single operational system of record to bring together customer data (customer relationship management) with business knowledge (enterprise resource planning) and project management information (project business automation) to respond quickly to opportunities.
“Everything is disconnected, and what does that lead to? Lag. It takes a lot of time to identify the right information, which causes delays in making the right decisions. You’ve got to find a better way of serving your customers,” Visitacion said. “Project business automation removes this disconnect, and emphasizes every element of running a services business. It pushes elements such as finance, project management, expenses, pipeline, resource, and collaboration onto a single central repository or platform.”
The need to deliver better quality, less siloed data was echoed by Prasun Shah, partner, PwC who presented at a separate expert panel at Workday Industry Insights Europe.
“How do you make a good, informed, and confident decision, whether it's about resource investment, whether it's about acquiring another company for skill sets, or whether it's around client satisfaction and what the overall relationship with our customer looks like? Bringing that all together and then being able to have confidence that it's showing you the right picture of where you are today, I think is still critically important,” Shah said.
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1 Forrester, Global Business Technographics® Business And Technology Services Survey, 2019