The professional services industry has been on a steady evolutionary trajectory since it emerged as a cost-saving outsourced services model a couple of decades ago. From operating call centers to executing non-core repeatable processes, the industry has expanded its professional services portfolio towards the value end of the outsourcing opportunity. Nowadays the emphasis is predominantly on managing and improving strategic business processes, enabling business outcomes and enhancing enterprise value.
This transition to a value-based strategic services model has opened up a range of new growth opportunities as well as challenges for the industry. Though cost is no longer the key differentiator, professional services firms are under constant pressure to minimize costs even as they bring in new talent and technologies to compete in this changing environment. Technology itself has already transformed traditional operating models in areas like outsourced front office, HR and accounting services. Going forward all aspects of the professional services portfolio will be impacted by technology.
An analytics-led model will enable professional services firms to balance the pressures of leveraging new technologies and improving operating efficiencies without losing focus on delivering strategic business outcomes and enterprise value to their clients. A structured approach that combined multiple techniques from analytics, technology automation and process design will help them prioritize high-impact technology investments, improve operational efficiencies and create strategic differentiation and competitive advantage.
Here is how this approach can be applied to three of the industry’s key challenges:
- Predicting and managing HR capacity and needs
- Improving quality
- Enabling strategic client value through insights
Predicting and managing HR capacity and needs
Talent, with the right skills and capabilities across domains, functions and business processes, will be a key lever for growth and competitive advantage as professional services firms focus on delivering more strategic business value to their clients. It will be a significant challenge for professional services companies to forecast and manage HR capacity and ensure it is aligned with business strategy and client needs.
A blend of analytics and process can help improve decision making in this area. Professional services firms can start with an accurate forecast of customer demand based on statistical modeling that accounts for specific demand drivers, past trends in seasonal and annual growth and future customer projections. Concurrently, they can evaluate patterns in headcount turnover, training time, and processing times based on productivity and quality metrics to determine the headcount needed to meet this demand.
Building on this baseline analysis, companies can then look at different capacity strategies and their relative merits in terms of productivity, quality and utilization. For example, in some cases there could be a benefit to cross training resources to work on multiple clients depending on seasonal or daily/weekly demand. The emphasis in these cases should be on balancing training and transition costs against the incremental benefits of maximizing utilization.
Testing different scenarios and strategies helps companies work out a balanced capacity plan that optimizes and maximizes resource utilization across clients and activities. Apart from delivering a direct impact in terms of productivity gains and cost savings, this level of analysis also does not require heavy investments in IT or technology solutions.
Quality of service and outcomes is becoming a key competitive differentiator as professional services firms engage with core enterprise applications and processes. Though industry quality frameworks have been constantly evolving, blended analytics, process, and automation techniques can be used to create a clear and differentiated leadership position in a competitive market place.
This combination helps companies identify quality issues, trace them back to their root causes and then deploy solutions that reduce the risk of manual quality errors. The starting point is to leverage customer data, process time data, and process mapping to pinpoint and resolve quality issues at source. Once this assessment framework is in place, it can be leveraged to continuously monitor and improve quality over time. From there, it becomes possible to identify steps in the process where a combination of analytics and automation can be deployed to completely eliminate manual processes with high risk of error. This stage is essential to remain competitive from both a productivity and quality perspective, and it can only be executed effectively based on a full analysis of where errors are occurring in the existing process.
As in the previous example, this approach can deliver quick yields in terms of quality management and control and can be integrated quickly and at low infrastructure costs without requiring expensive or elaborate IT solutions.
Enabling strategic client value through insights
The ability to convert data into insights and drive strategic business value for clients will be the only sustainable competitive advantage in an outcome-based professional services model. Most firms already have access to a range of client business data. The leaders will be those companies that can blend an understanding of their clients’ strategic priorities and extract insights from the data to deliver relevant insights and build more strategic long term partnerships with their customers.
A strategic assessment of a client’s business priorities and needs can help professional services firms focus on generating analytical insights related to new growth opportunities and cost savings that are relevant for their clients. This begins with strategic analysis of the client company followed by an assessment of the data the professional services firm has at its disposal. From there, firms can begin assembling the data they have in new ways to extract insights that are aligned with the client’s business priorities and share these insights alongside existing services.
This often includes presenting data and insights in more visually informative ways but also extends to more analytical assessments like building forecasts, identifying activity clusters among similar data points and more prescriptive analyses to help clients make actionable decisions. Initiating an insight-led partnership with customers and focusing on these more advanced insights gives companies the opportunity to become a strategic partner rather than an outsourced provider to clients.
By leveraging data in new ways and combining analysis with process improvements and strategy, professional services firms can address cost and technology pressures and drive towards automation and higher productivity while in parallel moving up the value chain in their client services. Adopting a holistic approach defined by their unique business context and strategies will also be key to streamlining the industry’s transition from outsourced service provider to strategic client partner.