Professional services are one of the biggest employers in today’s workforce. As such, disruptions impact both work and the way it gets done.
Given how services and products are tailored to fulfil the changing demands of clients, keeping track of trends lets you know which way the market swings. It reduces uncertainties and lets you capitalize on the revenue profitable prospects bring in.
In this regard, technology plays a pivotal role in the professional services firms’ ability to compete and remain relevant in the market. The more able you are to adapt to advancements in automation, the easier it is to mitigate the risks associated with constraints within consulting projects. It’s’ time to place your finger on the pulse with a closer look at what professional services firms do.
What are professional services?
Professional services span auditing, accounting, tax advisory, legal, insurance and consulting. It makes use of the expertise of its employees and bills clients for the services rendered. Given the sensitivity of the client data, trust and rapport are critical for business relationships to move forward.
While some aspects of the services are common knowledge, the need for professional consulting stems from the fact that a qualified professional with years of experiential judgment can fill in the gaps. They can not only make sense of your data but can also arrange the facts in a way that helps you understand and make informed decisions.
Read more: https://www.saviom.com/blog/the-benefits-of-psa-in-improving-financial-management/
For example, your financial advisor can give you money-saving tips and assist you in claiming rebates while filing returns. With a skills value line to differentiate levels of knowledge, you know the cost and worth of the service you’re paying for. The next section covers professional services industry trends that are coming up to the surface.
The 2020 Forecast for Professional Services Firms
Rise in skills shortage
As more niche services spring up, there is a corresponding rise in skill shortage. Medium-sized enterprises, in particular, are facing the challenge of staffing compliance-based services with the right skills.
In 2018, it was found that professional services companies in the United Kingdom are spending an extra 230 billion pounds to overcome the shortage, following Brexit. The Business Barometer report revealed that over 6 billion goes into hiring temporary workers, training fees and inflated rates.
On one hand, there’s the issue of losing out on key skills. And on the other, cost overruns associated with assigning low-skilled resources to high-level work, or vice versa. This is why it’s vital that the right person for the job is found.
And with a resource management software, it gets easier to know when and where you’re likely to run short of crucial resources for a project. When probability estimates are generated for a project, you not only know how likely it is to convert to actual work but will also be able to gauge the type, and quantity of employees needed. You can then apply the appropriate resourcing treatment, i.e reshuffle or retrain existing resources, or even plan out your hiring cycle.
Read more: https://www.saviom.com/resource-management-software/essentials-of-resource-management-software.html
Disruption by automation
Technology itself is evolving and changing how client data can be used. Historically, the pace of innovation in professional services has been slow on the uptake. This view, however, is shifting as more companies are starting to leverage automation in the bid to simplify complex tasks, save time and deliver service quality.
Automation is both a substitute and complement for low-level services.
For one, with access to the internet and digital technology, clients are rethinking their business models. While Artificial Intelligence can’t replace human judgment, it’s worth remembering that judgment is a response to deviations in a pattern, which is something algorithms are better at recognizing.
Companies augmenting their services with automation will find it easier to get to the root of problems and remedy unfavourable outcomes. What’s more, the rise of digital marketplaces will give your business the much-needed visibility to tap into a wider demographic.
More workforce-focussed
With more firms diversifying their revenue streams, the need for an on-demand workforce that shapeshifts to the type of products and services to be created will see a rise. For instance, accounting firms are branching out towards full-time consulting, which implies the need for a workforce that can add more to their skills set as new demands come up.
The workforce composition will include freelancers, contractors, part-timers and temporary workers alongside full-time hires. This is beneficial to businesses wishing to cut costs without compromising on quality.
For one, your payroll is limited to the project timeline and value of service. And for another, you get different work perspectives which enable professional services to get hold of the best ideas strategically. Business leaders will have to learn to manage the expectations of the workforce of the future in order to cultivate a culture that attracts top talent.
Read more: https://www.saviom.com/blog/the-business-benefits-of-a-contingent-workforce-today/
Globalization
The rapid globalization is creating competition internally. In addition to the Big 4, there’s an emerging market of boutique specialists that clients are turning to for short-term projects. And as services get commoditized, regulations will be lifted to extend the reach of professional services contracts.
What’s more, firms outsourcing work will save costs and be in the know of how their compeers function with respect to the actual work quality.
Location is no longer the priority, so long as the right mix of labour, technology and management are in place. The expectation remains that professional services firms should support their client base and deliver packaged services from anywhere in the world for the best value.
This points to the fact that demands can be fulfilled with operational and staffing flexibility, i.e the ability to know who is competent and available for the work in question.
Value-based pricing
Traditionally, professional services contracts are billed on an hourly basis. The difference between the rate charged to clients and the cost the company incurs to deploy resources is subtracted to calculate the net profits made.
That being said, the list of professional services companies opting to price their services on the actual rather than perceived value is growing. This is because of the pressure to decrease pricing in line with the number of consulting billable hours.
Given that the type of transactions taking place in future will be more advisory by nature, the value of the work delivered can be measured by how the client benefits, i.e. tax savings, insurance claims, compensation or the size of mergers and acquisitions. The shift towards value-oriented billing will let firms increase their revenues, profitability and customer numbers.
The age of disruption is now, and is heavily influenced by the usage of social media platforms, tight talent markets and technology. You’ll not only know how expertise will be looked at in a few years from now but will also be in a position to scale towards the direction of growth.
