This blog is the first in a series of four in regards to how Progressus can help your professional services firm by injecting flexibility and speed. Professional Services firms need to be flexible and quickly adaptable because of the ever-changing market and technology. In this first blog, we are going to discuss the disruptive trends in the professional services industry.
All companies, especially professional services firms, face extreme pressures to stay relevant and current in today’s fast-changing market. The same forces that have disrupted so many businesses, from manufacturing to publishing, are creating challenges and driving change in professional services. However, many firms may be unprepared and unable to respond to these new and non-traditional competitors or rising customer demands. Thus, they find themselves at a competitive disadvantage.
For years, professional services firms have been somewhat immune from disruptions due to opacity and agility. It is difficult to judge a firm’s performance in advance because clients are usually hiring the firm for specialized knowledge and capability that they themselves lack. Price becomes a proxy for quality. Additionally, the top professional services firms have human capital as their primary assets and, thus, aren’t constrained by substantial resource allocation decisions, giving them remarkable flexibility. However, in recent years, firms are seeing their competitive position eroded by technology, alternative staffing models, and the increased accessibility of data.
Here are some examples of disruptive trends in the professional services industry:
Client Sophistication: Companies’ have become increasingly sophisticated about professional services. Many C-suite executives have come from the consulting ranks and understand how professional services firms operate. These executives are intent on reducing scope and cost of work they outsource and adopt a more activist role in selecting and managing the resources assigned to their projects.
Project Modularization: Now more than ever, work is done anywhere by anyone who can do it better, cheaper and faster. Companies are discovering how to break a project down into mostly decoupled, atomized work components that can be performed by small independent teams scattered across the globe. These work components are then put together by an integration team to create the final product. Companies can choose to locate these modules inside or outside the enterprise, knowing they integrate easily with other critical business activities and can be reconfigured as needs change. The rapid and continued modularization of business processes means that companies must focus on and invest in only those world-class processes that create a competitive advantage.
Project Delivery Innovation: A variety of forces shape the professional services industry – from fierce competition and globalization to the modularization of business processes and technology. Clients want professional services firms to deliver cost-effective services in smaller, fixed price contracts, but at the same time want to retain highly seasoned professionals equipped to address their most challenging industry-specific process needs. To succeed in this environment, professional services firms must continually improve their service delivery methods to increase client value and profitability and lower cost. PMI’s 2012 Pulse of the Profession In-Depth Report: Organizational Agility maintains that companies with a high degree of organizational agility are more successful in delivering projects on time and on budget with superior results and ROI.
We will get into the three other disruptors in the professional services industry in our next blog. In the meantime, download our Flexibility and Speed for Professional Services Firms white paper to learn more!