Professional services firms are emerging from a period of IT introspection

Given the pressure to invest in AI, professional services firms need to find resources from elsewhere in their budgets to fund innovation. According to Donna Dobson, director for professional services firms at Unit4, firms should reconsider the best-of-breed approach to IT adoption – offering insights on how best to approach evaluating what firms need from their core systems so that they can target investment where it is most needed.

It is always hard to motivate organisations to address legacy IT. Often, it is easier to paper over the cracks rather than push through wholesale change. It causes less disruption, less headaches. Given the challenges the industry is facing, according to the 2026 SPI Benchmark, you can understand why IT departments do not want to commit to wholesale renovation. The data is pretty stark: billable utilisation is at an all-time low (66.4%), client net-promoter scores slid by 12% in one year and EBITDA has remained around 9.8% compared to a high in 2023 of 15+%.

What is clear is that the high performing firms are bucking the trend. They achieve higher revenue growth (169%), average deal size (104%) and EBITDA (115%) compared to the industry averages. There are many factors that contribute to their success, including clear, transparent communications from leadership, clarity on performance metrics and well-established customer experience programmes, but I would argue none of this success is possible if the organisation’s core IT systems are not built on agile, Cloud-based foundations. Only then are they able to embrace the opportunities artificial intelligence (AI) offers to revolutionise their approaches to client services.

What is the right approach for your IT strategy?

The problem for many professional services firms is the historical piecemeal approaches to IT adoption within different teams, as they have turned to specialist best-of-breed providers to address specific functionality or industry challenges. It has made sense to use this strategy to improve workflows and business performance, but in some scenarios it has also added layers of complexity. It is further complicated as the professional services industry consolidates to deal with volatile economic conditions and the disruption posed by AI.

This soup of specialised applications makes it harder to integrate information sources and create a single source of truth across an organisation, which is especially limiting for firms wanting to use AI. If AI tools and applications are to work effectively, they must access accurate, quality data.

Consequently, there has been a lot of IT introspection as firms examine how they currently use their core applications. In turn it is raising questions about whether firms require this plethora of functionality. Which of the best of breed applications do they actually need? Or can that task be addressed within the existing core ERP system?

This review is leading firms to evaluate the merits of a platform approach, but it also raises crucial questions to address. What if the platform does not have the exact functionality for a particular sub-vertical in the professional services industry? Won’t those gaps lead to user frustrations that turn into productivity issues? Possibly, but professional services firms must understand how important specific functionality is to the organisation’s competitive advantage. If it is a standard process – say supplier invoice processing – then could that task be completed within the core ERP system?

How much functionality do you really need?

There are scenarios where embracing best-of-breed is the right strategy to meet the needs of users, but equally as professional services firms look to go “all-in” on AI, there is a need to simplify IT complexity. If they want to get the most out of their AI investments then core applications must be connected so that the AI tools make decisions based on a single source of truth. Deciding the right path requires a detailed evaluation of the business’ needs, but this should be done in conjunction with an honest assessment of the functionality being offered by applications within their existing IT environment.

Therefore, it becomes a strategic conversation about which IT systems are key to value creation, and which systems do not require a “bells and whistles” expensive solution. Any evaluation should be focused on some key criteria examining:

• What are you trying to achieve with your core applications?
• Do you need a high-powered best-of-breed application to manage workflows such as employee availability?
• Does your current setup enable you to easily extend functionality to (say) integrate AI or connect your subcontracting and financial systems?
• Can you easily gather a single view of all the data in your organisation?

If the answer is “No” to questions two, three and four then clearly the professional services firm does not have the right agile foundations in place. Finding the right way forward starts, though, with answering the first question honestly and with clarity. If you understand what you are trying to achieve then you will be better placed to assess the right solution for your organisation.

Ultimately, the professional services firms that thrive in the years ahead will be the ones that move quickly from a period of IT introspection to action. There is no room for sentimentality or phrases like “that’s not how we do things round here.”

The faster firms can rationalise their existing IT environments and shift towards more agile, Cloud-based foundations the better placed they will be to compete. The opportunities will be significant as modernising core IT systems will enable firms to innovate at speed and respond more quickly to their clients. Given what the SPI Benchmark has said about the decline in Net Promoter Scores this should be of paramount importance to every professional services firm that wants to ride out this period of AI-led disruption.