At our recent digital event, finance executives and industry analysts discussed how the pandemic has impacted the pace of digital change in the professional services industry.
If the global COVID-19 pandemic has achieved one thing for businesses, it’s to bring into sharper focus how important technology and innovation are to keeping them connected to their employees and customers. Although many industries screeched to an abrupt halt during the global lockdowns, digital technologies have played a key role in enabling businesses in other sectors to continue to operate.
So, what about professional services, an industry that you might imagine would have its finger on the pulse of digital more than most? John Bax, CFO, OneSource Virtual, and Derek Sager, vice president, controller, Computer Aid, Inc. were part of a panel atIndustry Insights Europe, a digital event hosted by Workday. They were joined by technology reporter Kate Russell to discuss how the pandemic has impacted the pace of digital change in the professional services sector.
As both a technology partner and a Workday customer, it’s perhaps not surprising that OneSource Virtual’s CFO Bax highlights the company’s ability to react quickly to ensure business-as-usual during the lockdown.
“I hate to use this word, but it was actually pretty easy for us. We were born in the cloud, so we've always had cloud-based software. When COVID happened and everybody almost seemingly overnight had to go work from home, we picked up our entire workforce of about 800 to 900 people that were in offices and had them working from home within 48 hours. That's really easy when you don't have anything on-premise,” Bax said.
Although Computer Aid’s shift to digital is a more traditional move from legacy technology, Sager stated that his organization was relieved it had made the move to the cloud when COVID-19 hit.
“我们30岁。所以对我们来说,culturally, getting to the cloud was needed. It's what we do with our clients. Over the past several years we have made it our objective to move all of our internal applications to the cloud. Workday was really that next step to get us to the cloud. As COVID played out, we're grateful that we did,” Sager said.
2019年“没有区别,我们回答e on-premise all together in one or two offices the whole year, and 2020, where three quarters of the year everybody was working from home. There's been no difference in our exception rate, in our error rate, in our timeliness rate. If anything, the last data I saw, we were actually better. So, from a resiliency standpoint, we did not notice,” he said.
The complexities of project and people management certainly precede the global pandemic, as did the emergence of professional services automation (PSA) to tackle it. But, how has COVID-19 and the general evolution of automation shaped the way professional services organizations think about the way they work?
“I think the world has changed from what we call time and materials where you bill by the hour to more of a fixed-bid model. It has become important to be able to manage the cost of certain skill sets. In a fixed-bid world, you have to really nail it or else you're going to have an unprofitable job,” said Bax.
“With Workday PSA,” he continued, “because there are no spreadsheets, everything is in one system, all shared with our financials, with our HCM, and with our payroll for every individual who's out there doing billable consulting. It’s just made things so much easier. We almost never make a budget mistake. We're not surprised if a job ends up being profitable or unprofitable because we're able to see that and plan it as we can see how the people come through the PSA system.”
“COVID-19 is complicating service businesses, but the picture isn’t all together dire.”
Margo VisitacionVice President, Principal AnalystForrester
Looking at broader professional services trends, Margo Visitacion, vice president, principal analyst, Forrester also presented at Industry Insights Europe, where she discussed some of the key trends impacting service providers. Visitacion pointed to three main modes that companies fall into when it comes to COVID-19 — survival, adaptive, and growth.
Citing research that CEOs and CFOs are pressuring CIOs and business partners to cut tech spending by between 5% and 15%, Visitacion highlighted the specific challenges facing professional services, stating that despite the pandemic she believes there are many positives for the sector.
“COVID-19 is complicating service businesses, but the picture isn’t all together dire,” she said. “We’re seeing it in specific areas, such as a 10% reduction in design services, 17% in administrative services, and 5% in legal, accounting, management and advertising. However, when it comes to government, financial, utilities, telecom, and high-tech, those are holding firm.”
This was clear fromForrester research, presented by Visitacion, which showed that well over half of the 2,678 respondents planned to increase spending with third-party services providers, and only 12% are planning to scale back on investment.
With many companies operating remotely and an overall increased reliance on digital, professional services companies must step up when it comes to delivering value to their customers. According to Visitacion, that means finally overcoming some long standing challenges, such as improving the consistency of data, improving data visibility, reducing financial delays in processes, and delivering better reporting across multiple data sources.
“Some professional services firms still operate in an old school manner. They focus on profitability over customer value. In the past, when there were longer-term relationships, it was easier to focus on profitability,” Visitacion said. “But today, every project goes out to bid. Businesses want to get the best value for their money because their own competition is so fierce.”
Citing a need to move away from disconnected systems in order for professional services businesses to boost collaboration both internally and with customers, Visitacion spoke of the need for a single operational system of record to bring together customer data (customer relationship management) with business knowledge (enterprise resource planning) and project management information (project business automation) to respond quickly to opportunities.
“一切都是断开的,那是什么ad to? Lag. It takes a lot of time to identify the right information, which causes delays in making the right decisions. You’ve got to find a better way of serving your customers,” Visitacion said. “Project business automation removes this disconnect, and emphasizes every element of running a services business. It pushes elements such as finance, project management, expenses, pipeline, resource, and collaboration onto a single central repository or platform.”
The need to deliver better quality, less siloed data was echoed by Prasun Shah, partner, PwC who presented at a separate expert panel atIndustry Insights Europe.
“How do you make a good, informed, and confident decision, whether it's about resource investment, whether it's about acquiring another company for skill sets, or whether it's around client satisfaction and what the overall relationship with our customer looks like? Bringing that all together and then being able to have confidence that it's showing you the right picture of where you are today, I think is still critically important,” Shah said.
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1Forrester, Global Business Technographics® Business And Technology Services Survey, 2019
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