Technology has over the past years become increasingly important for the management of consulting firms – its role has, if applied successfully, developed from being a facilitator of operations to a key enabler. The emergence of the latest technologies is taking professional services automation to the next level – consultancies today face an opportunity to leverage cutting-edge solutions to gain a competitive edge in, among others, project management, profitability and new business development.
Across industries technology is disrupting business and operating models. While consultancies are one of the first to be called in to help organisations harness the power of the latest tech developments – ranging from the Internet of Things and automation to Industry 4.0 and artificial intelligence – technology is at the same time also changing the playing field in their own back yard. One of the areas which is enjoying a renaissance under the helm of technology-led innovation is professional services automation (PSA) – the technology that forms the backbone of internal operations of consulting firms, from front-end aspects such as business development to the very heart of the business, project management and delivery, as well as the back-end processes that facilitate the operations.
Against the backdrop of rapid change that is transforming the face of the consulting industry, the role of professional services automation is becoming increasingly crucial within the market. Competition is heating up, putting pressure on margins, clients are demanding more and more transparency and risk-sharing models, and a new generation of consultants are changing the nature of engagement staffing and career trajectories, among others.
Having closely watched the key developments in consulting, and having worked with many of the leaders of the pack, Fergus Gilmore, managing director of Deltek UK, has formed a deep insight into the value of PSA. In his view, a cutting-edge PSA solution today has the ability to provide consultancies with a competitive edge vis a vis peers, highlighting three key domains which typically are positively impacted.
The top reason to build PSA capabilities lies in the additional visibility and control which it provides to a firm's number one revenue generator: the project. “Adopting systems and tools to better manage front office activities such as project management and resource utilisation gives consulting firms the insight they need to prosper.” Besides boosting engagement-related work, the technological edge enables firms to align decisions with overarching strategic goals. “Focusing all processes and data into the project and then linking all projects with back office processes means they are able to make project-related decisions that will strategically guide the business and take it in the direction they want it to go.”
Market analysis conducted in recent years shows that consulting firms will continue to face stiff competition. “Data highlights* that top performing have taken action. Almost 73% of the best professional services firms have a standardised methodology and tooling for delivering projects, compared with just 27% that do not. They for instance use PSA to create better cost estimates, impress new clients by analysing past project performance information and use what they find out to establish new revenue streams by crafting new, modern products and services," Gilmore says.
PSA technology is also helping advisory companies fight back against squeezed margins – another major challenge in today's consulting sector. Pinpointing where consultants are being utilised and then assigning them to projects that generate the best revenue will improve profitability. They are also, adds Gilmore, using tools to support time and expense tracking and improve customer retention through enhancing service reliability and offering useful project insight. “The top performing professional services firms invest in technology that increases their focus on developing profitable new business and maximises the profitability of every new project.”
They have, among others, developed superior processes and systems to harvest knowledge, manage quality, schedule resources and manage changes. “They focus on developing repeatable processes which they can manage in real-time, so they are better at estimating and ensuring projects are delivered on time and on budget.”
Winning and retaining clients
The third edge PSA can provide lies in the commercial arena. Top consultancy firms are using professional services automation to win and retain new business which is a major contributor to growth and a priority for any sized firm. “Spotting and retaining the right type of clients – those that will benefit most from a firm's particular skill set and will in turn reap the most reward – will continue to be a real challenge for firms moving forwards,” says Gilmore. “Best in class firms are relying on their PSA platforms to analyse past and present data to reveal where the most profitable business is and how to get more business out of existing clients.”
Gilmore concludes: “Top of the bill PSA solutions can improve project visibility and control, as well as link front of house activities with back office processes so that better, more strategic decisions can be made. With these tools in place, consulting firms can look forward to releasing themselves from the confides of their own bureaucracy and support their growth aspirations.”
For more information on how PSA can act an enabler for growth in consulting download the free 'PSA for Dummies' guide.
* Sourced from the 2016 Professional Services Maturity Benchmark survey.