To keep up with the breakneck pace of work and deliver detailed insights to clients, professional services firms will need to bust data silos and automate time-consuming tasks. Here’s how the industry’s leaders can prepare for the future.
Professional services firms don’t have the luxury of gradually adjusting to an evolving digital environment. For them, the digital future is pretty much here. More than one-third of professional services firms expect that at least 75% of their revenue will come from digital by 2025, according to a report by PwC and Workday.
As an additional sign of the changing times, a growing proportion of firms are investing more than $50 million in artificial intelligence (AI), machine learning (ML), and advanced analytics, according to the report. And with recent advances in generative AI, investments are likely to continue to grow. That’s further blurring the line between professional services and digital services—a distinction that will only get fuzzier in the future.
“Digital first is our new reality. That isn’t going to change,” shared Joe Golden, vice president of services, IBM, at a Workday event.
Yet, despite how adroitly many professional services firms adapted to wide-scale changes brought on by the pandemic, some lack visibility around past behavior and likely future outcomes. “Professional services organizations can be surprisingly opaque when it comes to insight,” IDC reports.
To succeed, firms must solve their data, talent, and technology challenges. But many have yet to embrace this new reality. Among professional services leaders, 57% say there’s a growing gap between where their business is and where it needs to be to compete, according to a recent Workday study on digital transformation. And only 23% say their digital strategy allows them to keep pace with or exceed the demands of the business.
“Machine learning can work through so many more dimensions around who would make an ideal team for a particular project.”
Patrice Cappello
Managing Director, Professional Services Industry
Workday
Firms will need to bolster their access to high-quality, always-available data, along with having staff with the necessary data literacy skills to make sense of it all. Of companies with fully-accessible data, 76% say they are well-equipped digitally to ensure business continuity in times of crisis, Workday finds. Small wonder, then, that advanced analytics and data visualization are the skills most sought after by IT leaders (35%) and finance leaders (34%).
“Access to data is the crux of most technology issues in any company,” says Jennifer LaClair, CFO, Ally Financial.
To better understand what the future might hold for professional services firms, industry thought leaders shared their predictions for three of the biggest trends the industry will face.
Spreadsheets will no longer cut it as a way for professional services firms to keep a tally of their people and their skills—not when the industry is evolving so quickly and talent demand exceeds supply.
Keeping track of talent has become more complicated in a hybrid work environment with almost two in five global employees (39%) expected to work hybrid schedules by the end of 2023, up from just 12% in 2020, according to Gartner.
This talent environment demands that industry leaders must be able to put the right people on the right projects with ease. But because spreadsheets can’t provide accurate, dynamic insight into available talent and skills, firms tend to staff projects with the same people, time and again.
“They’ve been relying, basically, on staffing projects with the people they know. That’s not a scalable strategy—particularly in a remote or hybrid environment,” says Justin Joseph, Workday’s senior director of product strategy for professional services industries. “New ways of working have highlighted, for a lot of companies, how murky their visibility is on the real skills of their workforce.”
So murky, in fact, that 38% of human resources (HR) leaders consider workforce planning one of the biggest human capital challenges their organization faces today, according to the PwC and Workday report.
“You need to be able to look across the business and see who you have, see what skills you have, to be able to plan for the future,” says Patrice Cappello, managing director, professional services industry, Workday.
To know how best to use available resources, companies need intelligent resource management software that can provide a holistic, centralized view of people and their skills. A truly smart resource management application will use ML to pull in data from sources such as resumes, performance reviews, learning systems, and people’s past projects to build a skills ontology that’s both comprehensive and continuously updated.
Automation and ML can then unlock real-time visibility into the workforce, shedding light not only on available people and skills but also on the best combination of people for the project at hand.
“Machine learning can work through so many more dimensions around who would make an ideal team for a particular project—helping the person tasked with resourcing to make data-driven decisions faster and with greater accuracy and confidence,” Cappello says.
Firms can use ML to quickly adjust hiring plans in response to economic fluctuations and other changes, making the most of their billable resources. That’s no longer a nice-to-have, but a must-have.
“In the past, professional services firms were hesitant to put in the work required for real enterprisewide resource management. But the past few years have been a perfect storm for highlighting the vulnerabilities in that approach,” Cappello says. “Tighter margins and clients’ increasing sophistication in procuring resources are driving firms to rethink resource management, and we see the industry now takes automation much more seriously.”
In light of the rapid-fire evolution of technology, clients increasingly expect faster and more personalized service. At the same time, they are less likely to commit to a fixed set of project deliverables, but more likely to expect specific business outcomes to be met, IDC reports.
“New ways of working have highlighted, for a lot of companies, how murky their visibility is on the real skills of their workforce.”
Justin Joseph
Senior Director of Product Strategy for Professional Services
Workday
To deliver more value, firms must provide better insights. To do so, they’ll need the ability to combine cross-functional data from HR, finance, sales, and even external sources. For instance, firms can combine AI and customer relationship data to determine the recommendations they should make to clients based on past client behavior.
“The ability to connect the dots with insight and creativity makes you different and helps you win. Unless you have that end-to-end approach, you’re at a disadvantage,” says Dan Priest, principal at PwC.
Rather than relying on clunky spreadsheets, shared documents, and work-arounds to determine quotes and contracts, firms must leverage a single, silo-busting system to pull data about a wide range of elements, such as resources, skills, rates, availability, and tasks. With this wealth of data, firms can more effectively and efficiently create service-centric quotes, contracts, and project details. And everyone on the team—sales, finance, resource managers, and project managers—can work with the same data from a single source of truth.
Cushman & Wakefield, one of the largest global commercial real estate services firms, saw firsthand the value that a single enterprise management system can provide the firm and its clients. After a merger that brought three companies into one global firm, Cushman & Wakefield now has more than 50,000 employees—many of them working remotely. Yet, its cloud-first enterprise platform allows employees around the world to access the same system and see the same data.
“The needs of our clients and our employees are changing quickly, so we needed a system that adapts—a system that’s mobile, cloud first, and can scale very quickly,” says Neil Johnston, global CFO, Cushman & Wakefield. “The technology has to provide actionable data and information so we can improve outcomes for our clients and our employees.”
To drive productivity and profit and to forecast accurately, future-forward professional services firms will need more integration and less separation of their people and systems. “Today’s professional services organizations simply cannot operate with functional silos as the lines between sales, delivery, and finance become blurred,” SPI asserts.
Unfortunately, these organizations’ data too often sits trapped within silos. “The reason most companies can’t forecast their revenue more accurately is because they have different systems and data across their lines of businesses and services,” Joseph says. “And all those different systems mean that you have data that’s going to be wildly inconsistent.”
Almost half (49%) of business leaders—and almost two-thirds (62%) of professional services leaders—say their inability to connect operational, people, and financial data to business outcomes impairs the organization’s agility, according to a Workday survey of senior business executives.
But firms with accessible data tell a different story, the Workday survey reveals. A towering 85% of leaders whose companies enjoy fully accessible data say the organization can embrace change readily. All of which points to the urgent need to overcome siloed data sources.
Almost two-thirds of professional services leaders say their inability to connect operational, people, and financial data to business outcomes impairs the organization’s agility.
For ERPA, a consulting and enterprise application managed services firm, adopting professional services automation slashed the time needed to calculate revenue from a full day to just 15 minutes. And the firm gained a stronger forecasting ability in the process.
“From week to week, we’re able to get a really good sense of our forecasted revenue for projects in the next four to 12 weeks,” says Jon Milkovich, director of Workday financials at ERPA. “So it’s really provided a lot better real-time insight into what our forecasted revenue will be.”
That’s a need that best-in-class firms are meeting head-on. They’re 82% more likely than other firms to be able to share financial and operational data with the extended enterprise through a central repository, Aberdeen finds in its report: “Leverage Demand Planning and Forecasting for Best-in-Class Performance During Volatile Times.”
Alight Solutions, for one, uses real-time data to create multiple what-if scenarios based on projected client deals to determine if the company has the capacity to take on new clients or if it needs to adjust. Instead of a periodic and theoretical exercise done at a distance at headquarters, forecasting has become an ongoing process involving the informed input of managers who work directly with customers.
The ability to know what’s happening in real-time will become indispensable for professional services companies to keep up with the breakneck pace of work.
“As fast as things are moving and changing—from the slowdowns in the early stages of the pandemic to the pickup in business now—it’s been a game-changer for us in how we think about and run the business,” says Colin Brennan, chief product strategy and services officer, Alight.
To learn how Workday can help your professional services organization transform, visit our website.
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