Running a professional services firm is rarely easy. Most business leaders will say it is often demanding. A few might even say it is fun. At least one consultancy firm, Moorhouse Consulting made “a sense of humour and perspective” one of its values to ensure that it can be. What all firms have in common though, is the challenges they often face.
This was the focus of a research project sponsored by FinancialForce that Enterprise Times undertook. It looked at the challenges faced by Professional Services as they looked across 2019. Moorhouse Consulting were one of the qualitative interviews but the findings were based on a piece of quantitative research. The top four challenges identified as very impactful in 2019 were:
- Having the right talent with the right skills (60%)
- Profitability (57%)
- Meeting client expectations (57%)
- Retaining talent (56%)
These were the only challenges that rated above 50%. However, extending the answers to include whether they had some impact of the organisation, nine challenges posed scored highly:
- Having the right talent with the right skills (97%)
- Meeting client expectations (97%)
- Profitability (96%)
- Revenue forecasting (94%)
- Project resourcing (92%)
- Evolving target market (Marketplace unpredictability) (92%)
- Retaining talent (91%)
- Increasing competition (90%)
- Changes in client procurement methods (88%)
In discussing these challenges further with the interviewees, it became clear that many of them were interconnected. Importantly, neither the quantitative nor qualitative interviews uncovered any additional significant challenges that organisations faced.
What concerns leaders
The obvious pull out is that three broad topics are concerning business leaders:
- Talent
- Having a profitable company
- Finding, winning, and keeping customers
None of these are solved simply. Something that can assist in each of the is an appropriate application of technology.
- For talent, an HCM system appropriate to the size of the company. Ultimately it may include recruitment, onboarding, talent management and many other features. A modern HCM can keep track of an engages with employees, helping with retention.
- A finance system not only produces reports around profitability it should also assist with revenue forecasting and helping with planning for the future. Sometimes this may be an add on component.
- Finally a CRM system can help to track customers both during the pipelines and in life engagement. Few companies have no CRM system at all to track leads.
Each organisation also needs an operational structure that helps to drive the company forward. These technologies merely help support that.
The growth dynamic
Three key components of an operational framework are people, processes and technology. For companies to grow they need to add a fourth element which is customers. As professional services firms grow they need to mature their organisation both as a factor of their size but also as their customers change themselves. Over time, processes need to change and mature.
The organisational structures such as management also need to evolve. When companies are small they can have an extremely flat structure. As they grow and become multi disciplinary and multinational, deeper hierarchies are required. Finally, technology needs to mature to cope with these needs. Spreadsheets need replacing with specific technology such as professional Service automation software.
Each change is a small step in itself but needs completing within each of the elements before the whole organisation can successfully grow. Having an expensive complex technology may not work for a 10 person firm. Trying to run a 200 person firm on spreadsheets is equally likely to throw up issues. Similarly, the processes required in a small organisation where approvals can be given on a nod, often literally, are no longer appropriate for a larger organisation. As the company grows it needs the right solution at the right time.
Culture is key
Underpinning these elements is a firm’s culture. A flaw in the culture risks some elements of growth failing. Not attracting, training and retaining the right people can lead to a high turnover that can lead to customer dissatisfaction. It will also mean that processes are not adhered to as they are not ingrained and technology is misused as it is constantly used by new people.
Technology needs to be fit for purpose. It needs to match the processes in place and be simple to use by both consultants and potentially customers. The call for greater transparency was not a key highlight of the survey. It may be a trend that is seen in later years.
Customer expectations are also changing. They want embedded teams that jointly work on projects. This often means that project information is shared. The technology needs to support that. Processes that impact the working methodology of projects need automating and if possible in an industry standard way.
An example of that evolution was highlighted by Jon Russell Finance Director at Moorhouse Consulting who commenting on FinancialForce: “We have invested in it, we thought ahead, we put systems in place which will last us through the next phase of our growth.”
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