The next Industrial Revolution is already upon us! Scientists, entrepreneurs, and policymakers including the United Nations and World Economic Forum are warning of an imminent paradigm shift in the future of work. The global COVID-19 pandemic has only accelerated that shift. For professional service organizations (PSOs), evolving with this paradigm will be particularly challenging as the business environment around them rapidly changes.
The issues are formidable. The complexity of managing their businesses is accelerating, and the move to high-frequency work is challenging. There’s a skills shortage and yet also an increasing demand for specialized skills in conjunction with decreasing budgets. As a result, PSOs occasionally have to employ and manage on-demand or short term resources to undertake key project work. Through this approach, a company’s workforce would be composed of full-time employees, as well as freelancers, contractors, temporary workers, consultants, part-time employees, and other interim workers.
In addition, there’s an avalanche of effort required to coordinate the modern digital infrastructure and people who manage it. Essentially, the fundamental nature of work is changing, more people-centric and less project-centric.
The Impact of millennials
According to the World Economic Forum, millennials are expected to comprise 75% of the workforce by 2025. Millennials are digital natives; they want and expect to work in ways that reflect how they live. As a result, millennials are driving organizational change. Employers must change company policies, procedures, and technologies to meet this changing workforce’s expected behavior and mindset.
Re-skilling the workforce
These developments are forcing organizations to fundamentally rethink and reimagine the way they work. World Economic Forum research indicates companies around the globe expect to displace around 6% of their workforce by 2025. One in two workers will need reskilling. Some of the skills required include DevOps engineers, AI specialists, digital marketing managers, talent acquisition specialists and customer success specialists. Those remaining in their roles will need to update 40% of their skillsets to adapt to the changing labor market.
Decades of research has shown that any company’s most valuable asset is its employees – its human capital. World Economic Forum research indicates that by 2025, organizations will train and retrain more than 70% of their employees so they can smoothly transition into the workforce of tomorrow.
The importance of resource management
As a result, the ability of an enterprise to manage its resources effectively will become even more important. Companies around the globe are already experiencing a shortage in relevant skills for future roles. This trend is expected to particularly impact professional services businesses. These companies are uniquely people-dependent and often face volatile demands and challenges in scaling.
Businesses can spend a lot of time and cost in creating the right talent pool. So that, when employee skills and competencies are tapped to their maximum potential, it enhances overall efficiency and profitability. Consequently, managing resources intelligently is vital for every organization. Resource management has become an integral part of every professional services business today. It plays a significant role in improving a business’s profitability and longevity. Moreover, it can help contribute to both the top line and bottom line of any business.
The key components include:
- Resource scheduling
- Resource forecasting & planning
- Capacity planning
- Business Intelligence/reporting
- Integration with other related applications.
With resource management tools and software supported by AI, managers can efficiently deploy people and ensure the right mix of resources to manage project success, customer satisfaction, and costs. Allocating the right resource for the right project enables them to complete the delivery within time and budget.
Promoting collaborative working
Analysts such as the Boston Consulting Group have suggested service companies are moving toward a more distributed organization model as teams increasingly work collaboratively, autonomously, and remotely. Collaborative work tools allow team members to organize and prioritize workload in context in addition to engaging, connecting, and interacting in real-time across departments or with external partners. Employees can discuss project issues in Jira, Slack, or Mavenlink, which significantly cuts down on meetings and email clutter, saving time in the process. But more than just increasing the efficiency of intra-work communication, these technologies are improving its effectiveness as well.
When employees are freed from filtering through hundreds of emails a day just to keep up with a project’s status, they’re able to spend more time working on billable projects. This is precisely where businesses need the bulk of their team’s efforts focused.
The proliferation of collaboration and workflow tools confirms this trend. Grand View Research reported the global collaboration software market size was valued at US $9.5 billion in 2019. This figure is now expected to grow to US $24.2 billion in 2027.
Businesses have now experienced a more permanent shift to remote working as a result of the pandemic. The ultimate corporate objective should be to develop an internal model that allows this distributed autonomy and accountability to be effective.
Changing the world is no small task. As businesses automate workflows and coordinate traditional project management tasks like scheduling, the nature of project management is changing. Project teams are getting more time to focus on strategy optimization and project outcomes.
It is important to remember that people deliver projects. Therefore, enterprises need to incorporate people-centric processes into their organization – irrespective of whether it’s Agile, Waterfall, or a hybrid methodology.
Agile is not a silver bullet, and this is even more apparent in non-IT companies. Different departments have different levels of responsibility and risk, and not all of them can behave as software teams would. Mistakes for the legal or finance teams can be much more costly and harder to roll back than a bug in a client-facing platform.
Responding to rapidly changing trends and opportunities requires dynamic allocation of people’s time and the organization’s resources. Organizing all of these activities is time-consuming for most and overwhelming for many. Today, leaders, managers, and knowledge workers struggle with proliferation, information overload, and attention fragmentation.
Enterprises still need great leaders, managers, and employees at all levels to manage projects in an efficient and effective way. However, most businesses are not organized efficiently. Projects tend to be initiated by different departments, occasionally with the coordination of a product roadmap. Project budgets and finances in one silo, time tracking and metrics the responsibility of another department, and resource management, scheduling, and communication possibly with Human Resources. It’s a mess. Yet it is really important for businesses to have access to data in a unified data model – a tool that shares data from multiple sources and converts data into real decision-making opportunities.
Keeping eyes on the prize
As the future of work continues to evolve, it’s critical that organizations understand where competitive advantage is realized. Smart organizations will see the real prize as the ability to work more creatively, collaboratively, and effectively to support the real world needs of their business. Key to this will be the ability to make informed decisions in real-time to protect and grow their business. Optimizing resources in real-time in response to changing pressures will enable them to achieve this. These organizations will focus on resource management applications to ensure organizations can field the best team, every time. Instead of just managing projects and searching for efficiencies, professional service organizations need to stay focused on outcomes. Optimizing performance at every level can help ensure this.
Having the ability to precisely determine the optimal mix of resources for the optimal outcomes across every project, every practice area, for every client, every time, is a game-changer. These fine-tuned resource management-based professional services companies will be in pole position to embrace the changes expected from the fourth industrial revolution.
The Mavenlink Industry Cloud for Professional Services™ delivers transformative value by putting resource optimization at the core. It provides integrated project management, collaboration and accounting, enables complete visibility, and scales across hundreds of teams and thousands of projects enabling professional services organizations to operate with unlimited scale, drive predictable outcomes, and realize full margins.