Technology is moving to the center of attention across professional and business services – and firms are spending more and more, not just absolutely but also relative to their revenue. If solely treated as a cost position, it becomes a race to the bottom. Instead, if considered a revenue driver and managed as an integral part of your firm’s P&L, technology paves the way for new business models, growth, and profitability.
As of today, it is quite unlikely that professional services firms will dial back on their technology investments – instead, we even see increasing technology investments in order to keep up with a faster evolving competitive landscape. Gartner predicts an annual growth of 5 to 15% for the technology spend of professional services firms – even factoring in the steadily decreasing unit costs for many technologies (e.g., storage, processing, etc.). As firms work through the selection, implementation and adoption of more and more systems and tools, it is obvious that there is barely a true alternative to a “cloud first” strategy.
Something stirs underneath the surface of professional services. Last year, KPMG surveyed hundreds of leaders and managers across professional services firms globally on their use of technology and the signs for change. A significant 48% reported they expected major or radical change across their business and offered services within the next three years. A percentage that is incredibly telling for an industry with high growth and profitability, yet very little change to its traditional business model over previous decades. So, what is driving the change?
Professional Services Firms are currently facing questions such as:
– How to best solve our clients‘ issue in the COVID19 crisis?
– How can we deliver in virtual or fully digital setups?
– How to design or adapt solutions for the emerging recession?
– How to adapt our solution portfolio and firm for the new normal?
Tackling these challenging topics in virtual design thinking workshops is not just necessary and one of the only few options available at the moment – it may turn out to be surprisingly effective and efficient.
For 2020 we expect the pace of Digital Transformation and client-centric innovation to increase a lot across ProfessionalServices, especially legal, consulting, accounting and marketing services.
Leaders and managers need to be able to prioritize innovation efforts strategically and demonstrate to their fellow partners the continued need for investment, the returns and the strategic progress within the specific environment and portfolio situation of their firm.
The signs for a major economic downturn are clearly starting to show across several industries – and in professional services. Structural short-falls that have so far been covered by a thriving economy are now being revealed. This recession may hence become the catalyst of the long foreseen true “disruption” to lawyers, consultants, accountants and tax advisors.
Can you bend that way? Revisiting the Ambidextrous Organization for Managing Innovative Professional Services today
„Success in the past always becomes enshrined in the present by the over-valuation of the policies and attitudes which accompanied that success“. Finding the right updated and best fit organizational guardrails for innovation must be a key focus for professional service leaders. A key concept to achieve this: Ambidexterity. Let’s take a look at it …
The innovation engine of many firms seems to lack power… and the future readiness of many firms appears questionable. Why is that? After all, there is no lack of talent, analytical and strategic capabilities or money in this highly profitable industry.