AI could help create an era of mutually assured success

Artificial Intelligence is completely changing how professional services are delivered, argues Eduardo Niebles, ERP strategist for professional services organisations at Unit4. They also present an opportunity to demonstrate return-on-investment mid-project; reassuring clients in previously opaque transformations.

Traditionally, a client would buy a plan but be forced to wait until the end of the project to see the outcome with no guarantee of a return-on-investment (ROI).

Imagine if you commission a builder for a home renovation where the contractor bills by the hour. You can’t see inside the walls while they work. Problems appear mid-project and the timeline extends. You have no idea of the work’s quality until the final walk-through. And if you don’t like the result? You’ve already paid for all those hours. Sadly, in a variety of professional services settings clients can relate to this story.

AI changes things. Imagine if the home renovations contractor could track progress in real-time? And you could pay for outcomes: the delivery of a working kitchen by a certain date rather than receiving an invoice based on hours worked.

Putting a value on the benefits of change

This new approach creates challenges for professional services firms as it requires redefinition of value, but it can also generate more transparency and trust in a relationship. Success depends on measuring the positive impact of change on the client’s organisation once the project is delivered. That change could be showing how it improves margins or reduces risk to revenue streams. It could be that post-implementation, the CFO expects to have clearer insights into projects, or it could enable the sales team to build deeper customer relationships.

To achieve such results, professional services firms must evaluate how AI changes the way they interact with clients. Firstly, there is the back-office impact. By automating and streamlining processes firms achieve cost reductions in the delivery of services. Will they pass on these savings to clients?

Secondly, integrating AI enables the use of fixed price projects with pre-defined outcomes. This approach allows consultants to run projects more efficiently and clients have a far clearer understanding of deliverables which leads to predictability in costing projects.

For the professional services organisation, though, it could commoditise services. A perfectly legitimate business model for some firms, but if others want to maintain higher margins, they must articulate the unique value of their services. How do they value change and the benefit it brings to a client?

This is where AI can be used to support outcome-based pricing. Firms could ask for a lower fixed fee to cover costs but then tie additional rewards to the successful delivery of a project. It always carries the risk of “What if you don’t deliver on time and on budget?” It also alters the invoicing process. Traditionally, firms in sectors like IT services have aimed for healthy margins, but when they split invoices into fixed and performance-based parts, they must show how that margin is earned.

Embracing shared risk can lead to mutually assured success

Ultimately, the professional services firms that succeed will be those that build collaborative, trusting relationships with clients, which brings me another important concept: shared risk and responsibility or mutually assured success.

This requires a willingness on both the client and supplier side to adopt shared risk and an acceptance of the need for change. Success depends on professional services firms committing to transparent pricing and a data model that enables clear outcome metrics. On the client side they must provide access to data and their subject matter experts, as well as clarity on the scope of a project and acceptance of possible trade-offs.

Above all, it requires the client to embrace the redesigning of processes, not just automating the old way of doing things. AI delivers the most value when not just reducing costs, but redefining processes to enable growth. Clients will get excited about the prospect of more revenue, but in the heat of transformation there is always a danger of resistance to change.

This is where change management becomes critical. Firms need experienced consultants who can explain the journey, and keep the client focused on agreed outcomes. This requires deep, industry-specific knowledge of the client’s environment not just a broad appreciation of the overall industry as this helps to define tangible outcomes.

Three guiding principles for shared risk model

For professional services firms looking to define value in the era of AI and embrace the shared-risk model, there are three areas of focus:

• Measurable outcomes: if you are looking to combine fixed fees with success bonuses then you must understand what delivering projects correctly looks like. It is critical to manage risk while also demonstrating tangible value. Expect the client to ask: can you demonstrate how this project will improve our margins, reduce risk or deliver revenue growth?
• Strong data foundations: it should go without saying, but unless your approach to AI is built on robust data models that are accurate, secure and accessible, it will limit confidence in your approach. Expect the client to ask: how can I trust that your AI reaches ethical decisions? Will your bonus be tied to ensuring we can access and audit the data?
• Knowledge is power: your team delivering the project must understand not just the client’s industry sector, but specifically how a change process will impact the core business of that organisation. Only then will you be able to define metrics that are realistic and valuable. Expect the client to ask: does your team really know our business model, or are they just generalists with AI tools?

From “What am I paying for?” to “What did we change together?”

AI is pushing professional services to rethink what clients are really buying. They are not buying a plan or a set of features. They are buying change and the confidence this change will move their business in the right direction. Shared risk and mutually assured success are ways to align fees with that reality. They require clear outcomes, strong data, and teams who know the client’s world in detail. When those elements are in place, the question at the end of a project shifts.

Instead of asking “What am I paying for exactly”, the client has the answer to a better question: “What did we change together, and how do we know?”