If you provide specialized people skills to clients as the main source of revenue for your organization, you are considered a professional services firm. There are many different businesses in this space, including software implementation partners, software publishers, system integrators, management consulting firms, accounting firms, marketing agencies, and the list goes on.
Key Challenges / Objectives of Professional Services Firms
Although your organization may differ in the ultimate result of your manpower, there are key common challenges you face. For the most part, all Professional Services firms have the following as key objectives:
- Improving Employee Utilization Rates
- Retaining Top Talent
- Avoiding Scope Creep and Executing Profitable Projects
- Improving Margin
To achieve your company’s objectives in these areas, it takes the optimization of your people, processes, and technology. Ensuring you have top talent and that you are leveraging the right talent on the right projects, at the right time, and are fully utilized is imperative. Also ensuring your people are excited and motivated to do their best work. Additionally, you need to ensure that your organization is leveraging the proper processes and technology to ensure that your projects are profitable and also looking at how you can become more efficient to improve your margins.
What is AI?
At this point, we should discuss what AI is and isn’t. As you have probably read over the last few years, AI is becoming a popular term and a major tool in business to facilitate decisions and, in general, to help organizations optimize their effectiveness and efficiency. AI can be used by your organization to do a task that requires a certain level of understanding to achieve. It is a tool that can be trained to do what a human can do. There are three key components that AI has that everyday software does not. Those components are:
- The ability to do high-speed calculations
- A large quantity of accurate data to leverage
- The ability to learn from the data
AI provides greater accuracy and stability to everyday processes using procedures that connect data sources with software that can improve over time.
AI vs Machine Learning
When you’re considering leveraging AI technology at your company, it is important to understand there is a difference between AI and machine learning (ML). While AI and ML are frequently grouped together, they do different things.
The difference between AI and ML can be defined as follows. AI is the broader concept of machines being able to carry out tasks in a way that we would consider “smart” whereas ML further defines this narrative. It is an application of AI based on the idea that we should be able to give machines access to data and let them learn for themselves. In this article, we will be discussing applications that could potentially entail both AI and ML.
How Can AI Help Professional Services Organizations?
In the professional services industry, you can think of AI as an important tool that could be used in various aspects of your business. It can enable faster and better decisions and therefore, profitable projects. It also can help you improve margins as well as optimize the utilization of your people and help you to retain top talent.
When you look at the professional services industry, companies may not be looking at AI as a way of improving their operations, however, if you look at the key objectives of the organization we discussed earlier, there are specific ways AI can improve operations in those areas.
Improving Employee Utilization Rates
Fully utilizing your people in a professional services firm is equivalent to an airline ensuring that every seat on the plane is taken. Any seats not taken are a hit to the utilization of that plane and therefore lost revenue. With that being the ultimate objective of utilization, AI could be used to provide you with suggestions for mapping your talent pool against projects based on skills and availability. AI can suggest those in your organization that would be the best fit for a specific project. This would be done by comparing the project’s requirements with the database of skill sets that are mapped to the employee. Additionally, if there are no appropriate resources available, it can recommend the required training that your employee would need. The AI system could also in some cases, scan external databases and provide a list of suitable candidates who can be hired for the project. This would significantly reduce the time utilized to ensure the right employee, with the right skills, is mapped to a project, therefore reducing the cost of this process significantly and improving customer satisfaction with your organization.
According to research by Forrester, robotic process automation and AI technologies, when implemented in the right culture, with the right people and processes, AI can help firms to unleash the power of their people by transferring monotonous tasks to robots. In 2020 CIOs will turn from planning to action with automation, starting with their own workforce. Robots will start to take over Level 1 support and the mundane infrastructure processes.
Retaining Top Talent
This is a challenging one for your professional services organization in that your employees are your most important asset in the organization It is, therefore, imperative to keep your asset happy. To do this, you need to understand your employees. Providing a knowledge base that anticipates professional service employees’ issues by diagnosing the problem and providing suggestions for resolving them.
The employee experience journey needs to be mapped with as much enthusiasm as your customer experience journey. Your organization can measure employee commitment and use this to understand potential voluntary exits in relation to engagement to minimize attrition. AI can assist your organization by enabling you to hear your employees’ concerns. HR teams can track the satisfaction levels of your employees and address their concerns well before the first red flag appears. By examining subtle signs and relying on AI to identify shifts in employee behavior, your managers can act on attrition and work one-on-one with employees who are at risk of leaving the company. This allows your managers to intervene before it’s too late.
Having challenging work and achieving goals, is one common motivator for employees and is the top reason stated for leaving a current role. AI can be used to assess the quality of employee work performance and provide managers with timely reminders for when an employee might be ready for a new challenge. Managers can also leverage AI through performance management tools to make recommendations on the next steps to train their employees. This AI assistance can help craft high-touch approaches to employee development and retain talent potentially at risk for turnover.
You may think this is a theory with no actual real-life examples, however, you would be wrong. IBM has been leveraging this type of AI technology and is devoted to the retention of its employees. IBM HR has patented its “predictive attrition program” which was developed to predict employee flight risk and prescribe actions for managers to engage employees.
Avoiding Scope Creep
Another challenging area for professional services organizations is scope creep, The additional features or functions of a new product, requirements, or work that is not authorized and beyond the original estimate of work.
- A few key reasons for scope creep sited include:
- Lack of clarity and depth to the original specification document
- Allowing direct un-managed contact between the client and team participants
- Customers trying to get extra work “on the cheap”
- Beginning the design and development of something before a thorough requirements analysis and cost-benefit analysis has been done
- Scope creep “where you do it to yourself” because of a lack of foresight and planning
- Poorly defined initial requirements
- Management promises the sun and the moon and breaks the backs of the developers to give them just that in impossibly tight time frames
The challenge with scope creep is that working on unapproved features of a product usually needs to be done within the original time and budget estimates, leaving less time for approved parts of the scope. That could mean approved features don’t get completed, and the end-product is not what was chartered. This leads to cost overruns for your organization or the customer and a drop in customer satisfaction.
So what we need to avoid scope creep is a way to facilitate knowing ahead of time the potential outcome. What we need is a Knowledge-based Expert (KBE) Systems.
What a KBE system does is provide near accurate estimations regarding the number of resources and the exact time allocation that will be necessary to complete each and every task throughout the different stages of the project.
KBE systems are a major component of the planning, scheduling and budgeting phase of projects these days, and without the AI assistance, businesses that are using them would immediately start to see a dip in their ability to handle projects and complete them within the stipulated deadline. By leveraging KBE it will eliminate at least some of the major “halt, reassess and reassign” steps that are generally needed to avoid scope creep.
So how do professional services organizations avoid margin erosion and improve profitability leveraging AI? Well, we’ve talked about some of these areas already. By improving employee utilization rates, retaining your top talent and improving your scope of projects, this will in and of itself help improve margins. However, there are other areas to consider.
AI and Analytics
If we look at the bigger picture, AI-based analytics can help you make better business decisions. AI-powered analytics can help you create and deliver on all of your most important strategies. Analytics can help you understand what has happened across areas of the business and help you investigate why. AI can also help you identify the best action to take, and enterprises can decide on situations where they want to automate business processes.
AI-based analytics can aid in assisting, augmenting, and magnifying areas where your organization can improve operations and therefore your margin. In a recent survey by Forbes Insights, 60% of the 700 C-level executives surveyed said that AI will be a key enabler of future success. According to a project report by Harvard Business Review, 36% of executives said that their primary goal for incorporating Artificial Intelligence is to optimize internal business operations.
AI and Customer Support
Another area where professional services organizations can improve margin as well as the customer experience is in the area of support. Many companies spend hours providing answers to questions for their customers. This is a time consuming and challenging process where AI can provide aid.
TruGreen, the largest US lawn care company handling both residential and commercial customers, recently embarked on an all-up digital transformation. The focus was to drive toward a culture of continuous innovation for its customers and associates. Working with Microsoft, TruGreen used a technology called Microsoft Power Virtual Agents to develop a new AI-enabled virtual agent bot combined with Microsoft Power Apps and Dynamics 365 Customer Insights. They also augmented this technology with their customer self-service mobile app with AI-driven image recognition. With this developed application, the bot understands and listens to customer needs, classifies and informs customers of insects and weeds in lawns, and responds to customers’ requests. By using this technology, TruGreen can provide proactive and predictive services to its customers, which frees employees to spend more time on higher-value tasks and complex customer issue resolution.
In closing, I hope this information has been eye-opening to you relative to how AI can facilitate helping your organization to improve operations. It takes excellent planning and execution to get there and a technology-oriented mindset along with leveraging the right software and technology partners. Velosio, a leading partner of Microsoft, has over 30 years helping Professional Services firms get there. We are also a leader in leveraging the Microsoft Power Platform to help organizations to automate their organization and take advantage of AI technology.
To see how AI can help your professional services organization, get in touch with our experts.