Professional Services Consultants Having a Discussion

A Guide to the Professional Services Industry

In this article we examine the professional services industry in-depth and provide a wealth of resources for firms to level up their business.

Professional Services Consultants Having a Discussion

Table of Content

    What's in the article:

    This comprehensive guide provides a deep dive into the professional services industry – as it stands today. We break down current trends, conditions, and the challenges and opportunities unique to this space. Later, we’ll cover use cases, strategies, and solutions that help firms win big – whether there’s more chaos on the horizon or not.

    Introduction

    Forward-looking professional services firms are capitalizing on new opportunities to leverage technology to align around new needs and shift to outcome-based operating models, and deepen client connections.

    They understand that responding to new challenges isn’t really about data or algorithms, it’s about maximizing the resources they have to provide more value to the people they serve.

    Okay, data and algorithms are actually a big part of this story.

    But the point is, relationships remain at the core of any professional services business operation. It’s those firms that know just how to respond to major shake ups in near real-time — through valuable insights and real empathy – that will emerge as the next big winners.

    Professional Services Industry Overview

    Sure, professional services firms still deal in the same intangibles as they always have: specialized knowledge, expert insights, and tailored strategies that help individual clients achieve specific goals.

    That said, expectations re: how those services are packaged, presented, and billed have changed in a big way.

    Clients, now familiar with the tools of hybrid-remote work, expect to engage with service providers in new ways. What’s more, increasingly accessible data analytics platforms embedded with AI/ML means clients aren’t easily dazzled by out-of-the-box capabilities.

    And as a result, service providers are held to a higher standard. These days, they want experts to help them deal with new challenges – often ones that neither party has experienced before. They want experts who can provide insights and niche solutions that help clients gain a competitive edge.

    We kick off this series by providing a high-level overview of what’s currently happening within the professional services industry. Read the full piece to find out what’s changed, why, and what that all means for your firm.

    Major Business Challenges Faced by Professional Services Firms

    Professional services firms face the same challenges as any business. Transformation pressures. Becoming “data-driven.” Residual COVID problems. Uncertainty.

    However, it doesn’t matter if we’re talking about a boutique cloud consultancy or a global firm that does it all, professional services companies are hard to manage in ways that other businesses just aren’t.

    Projects tend to be complex and unique to each client – with wide variation in size, scope, budget, resources, and more. This makes it difficult to use data to make real-time decisions, plan for ongoing demand, and effectively manage resources to ensure that projects are profitable.

    This article provides a closer look at some of the key challenges facing professional services firms right now – and what you can do to get ahead of them.

    Top Factors Transforming the Professional Services Industry

    From digitalization to COVID to rising customer demands and a more challenging competitive landscape, market conditions have pushed firms to rethink core business processes that have been in place, for, well, forever – and embrace digitalization.

    Firms are under pressure to become truly data-driven, update their workforce strategies, and take advantage of the new opportunities transformation can bring to the firm,

    This piece digs into the major forces behind the industry’s rapid and relentless disruption.

    Impact of Technology on the Professional Services Industry

    Between the rapid pace of change and ever-evolving (and escalating) client expectations and needs, professional services firms are under a lot of pressure. While just about every industry is dealing with the same pressures, service-based organizations typically make their money helping clients overcome obstacles. That means, firms face an extra challenge — transforming and future-proofing their own business while helping clients do the same.

    In this blog post, we zoom in on the ultimate disrupter – technology – and its impact on the professional services space.

    Technology Use Cases in Professional Services

    So far, we’ve made it clear that professional services firms can’t compete without technologies like AI, machine learning, automation, plus anything that makes it easier to interpret and operationalize data. In this short series, we get more specific – covering technology use cases for professional services firms across 11 high-impact areas including, project accounting, collaboration, resource utilization, and more.

    Read the brief overview to find out how modern professional services firms are using technologies like AI and automation to boost productivity, performance, and profit margins and follow the links for a more detailed look at each use case. We’ve also included examples from real firms to help ground these concepts in reality.

    Digital Transformation in the Professional Services Industry

    We look at the current state of digital transformation for pro services firms, ID key themes, and discuss some of the ways that service providers are creating a competitive advantage in an unforgiving market.

    Today’s transformations focus on developing more “mature” data strategies that enable firms to optimize their workforce and use advanced automations to actively generate value. Think – diversifying operating and service delivery models and adopting resource optimization or process mining operations. Read the full post to learn more how professional services firms are tackling digital transformation this time around.

    6 Proven Growth Strategies for Professional Services Firms

    With good data and a strong plan in place, professional services organizations can take matters into their own hands – expanding service offerings, embracing new business models, and applying intelligent automation to key areas to scale operations without investing in new talent.

    Here, we share six strategies that can help professional services firms fuel growth for years to come.

    Metrics That Matter: 5 Key KPIs for Professional Services Firms

    Key Performance Indicators (KPIs) are a critical part of any business strategy. They help companies set improvement goals, monitor progress, track performance against core objectives — and change course when strategies aren’t quite working.

    Choosing the right set of metrics allows professional services firms move to the more outcome-based models clients are looking for. They also help firms become more data-driven and gain more control over both performance and profits.

    This post looks at five “universal” metrics professional services firms should keep a close eye on – and why they belong in your strategy.

    7 Critical Success Factors for Professional Services Firms

    Critical success factors (CSFs) are essentially broad categories that represent critical areas or competencies firms need to master in order to be considered “successful.”

    CSFs could be anything from “data literacy” to “process optimization” to “project profitability,” and are determined by factors like your business structure, products/services, strategic goals, customers, and so on. For professional services orgs, critical success factors will most likely center on things like project management, client outcomes, and using data to support a variety of goals.

    This article explains the concept of critical success factors, puts it in context with the professional services space, then looks at a few examples that firms should consider using in their own strategies.

    Top Security Challenges for Professional Services Companies

    Due to the sensitive nature of their work, complex business models, and mountains of valuable insights and IP – professional services firms are prime targets for cyber criminals.

    From the hacker’s perspective, pro services firms are kind of a perfect target.

    A successful attack could lead to several profitable outcomes. Hackers could potentially steal and resell user credentials, proprietary insights, or client information.

    Worse, threat actors could potentially infiltrate client systems and cause even more damage. And – because the stakes are so high, there’s a decent chance that firms hit by ransomware attacks might actually pay the ransom.

    Finally, many firms have major security gaps in their system due to factors like poor visibility, remote work, and lots of external collaboration. This piece examines the unique cybersecurity challenges facing professional services companies and what they can do to protect themselves from bad actors.

    Importance of AI, BI, and Analytics for Professional Services Firms

    Intelligence is literally everything for professional services companies.

    Profitability hinges on the ability to transform raw data into specialized insights and solutions clients can’t get anywhere else. On the back-end – intelligence drives everything from budgeting and forecasting to managing massive client portfolios, resources, and core financials.

    What’s more, firms are increasingly looking toward AI analytics and business intelligence to diversify their service offerings. They’re creating SaaS-like pricing models, reusable data products, and niche apps that provide value to clients in new ways.

    It only follows that advanced BI and AI-powered analytics tools are a matter of life and death in this space. In this article, we look at the vital role these intelligent tools play in supporting professional services firms from every angle.

    Accelerate Your Professional Services Business with Microsoft Power Platform

    When your “product” is made from a mix of expertise and insights, providing valuable solutions becomes incredibly difficult when you’re suddenly dealing with a whole new reality that comes with a new set of needs and expectations.

    The Microsoft Power Platform makes it easier for professional services firms to meet changing client demands, as well as automate processes, build custom apps, and make data-driven decisions. The platform’s low-code tools democratize innovation for non-technical employees and enable fusion development. As a result, firms can develop more custom solutions for clients — at a faster pace. In this piece, we explore some of the ways the Power Platform is helping professional services firms get ahead.

    Microsoft Solutions for the Professional Services Industry

    Now, we’ve talked a lot about the many challenges and disruptions currently shaking up the professional services industry — and the role that technology plays when it comes to overcoming those obstacles.

    But — it’s important to understand that the key to getting all of these powerful new tools to produce the right outcome is composability. Microsoft, of course, knows all about this, and has built an expansive ecosystem of modular, interconnected apps and services that run on the same Common Data Model. That means, firms can put together an ERP solution that includes the exact capabilities they need — knowing that all underlying data and processes are the same across the entire network.

    This piece provides a big-picture overview of Microsoft solutions professional services firms should know about. It also links to a series of articles that examine each solution — ERPs to CRMs and productivity apps — and their role in the pro services stack.

    Future of the Professional Services Industry

    We close out this series by looking at what’s next for the professional services industry, based on emerging trends within this space and the broader forces transforming client needs, behaviors, and how they define “value.”

    Here, we cover the new rules of client engagement, new revenue and service delivery models, and the benefits of sticking with an outcome-driven strategy – even as target outcomes change.

    The past few years have shown us that, even with the technologies, there’s no way to know what the future has in store. Ultimately, professional services firms should focus on becoming more agile, flexible, and comfortable with uncertainty – and leverage technologies like AI, automation, and low-code development platforms to get ready for every possible version of the future. Firms are

    Read the full piece to find out more about how real pro services firms are helping clients navigate uncharted territory with new solutions and service delivery models.

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