Tackling Organizational Dysfunction in a Changing Professional Services Technology Landscape - Photo by Marvin Meyer on UnsplashAs chief technology officer at Kantata, I have a unique perspective on the professional services (PS) technology landscape, which is changing and continually growing. Despite the emergence of new technologies designed to simplify and support organizational needs, today’s PS organizations are trending more towards dysfunction in their operational processes.

Technology is certainly a key part of overcoming that dysfunction. However, for many organizations, technology is actually creating more dysfunction than it’s resolving. Adopting the latest technology isn’t a cure-all to modern challenges—but not every organization understands this. That’s why Kantata commissioned S&P Global Market Intelligence to survey 213 individuals at director level or above about how they manage their projects. The respondents worked either in PS firms (74%) or in PS teams within other types of organizations (26%).

The resulting report, “The Macro Technology Shift Impacting the Professional Services Industry,” illustrates that PS organizations are at a technological crossroads. After 20+ years of using software as a service (SaaS), the continual growth of data silos combined with the need to use many different applications has created friction in essential business processes.

Understanding what kind of friction your organization may be experiencing and how to solve for the dysfunction it causes is the first step towards building a stronger, more productive organization.

Friction is on the Rise

Since Salesforce launched its CRM platform in 1999, SaaS has gained massive popularity as on-premise software became less sustainable. However, while SaaS still offers many critical uses and supports everyday work needs, more businesses than ever are struggling with SaaS-created technology silos that degrade data quality.

This organizational dysfunction has a direct impact on employee engagement and even retention. For 85% of PS leaders, the different technologies they use are a very important influence on the quality of their day-to-day work experience. For 35% it’s the single most important thing—more critical than company culture, colleagues, and compensation.

However, increasingly complex enterprise technology has led to friction across work.

S&P Global Market Intelligence research found the biggest tech challenges that create this friction are:

  • Siloed information (42%)
  • The limitations of security and compliance requirements (35%)
  • No clear line of sight between goals and progress (31%)
  • Poor user experiences (29%)
  • Having to use too many apps (27%)

What Dysfunction Looks Like in a Professional Services Organization

There are four major types of professional services organization dysfunction being broadly experienced today that are both caused by technological issues and which software currently in use cannot solve.

The following are the major elements of these dysfunction types and the solutions that professional services organizations can use to improve their processes.

1. Technology Friction

When your software requires additional manual effort to function properly, work slows down and related complications turn what should be process improvements into new frustrations that damage project health and employee satisfaction.

Technology friction is often caused by:

  • Siloed data — Prevents team members from accessing the information they need to make smart decisions, leading to productivity friction.
  • Lack of automation — Creates additional work, slowing down processes.
  • Poor insight — Low-quality takeaways from software can lead to poor decisions.

To solve for tech friction, firms should use an all-in-one system that includes all the processes they need and can also tighten integration between key solutions.

2. Productivity Friction

Productivity friction occurs when complications and miscommunications compromise the capabilities of your workforce, preventing resources from hitting required due dates and expectations. Processes that help employees make the most of their time fuel productivity, but friction can get in the way.

Frequent elements of productivity friction include:

  • Lack of real-time data — The need to generate new reports (or rely on old data) slows down daily work.
  • Manual errors — Manual work often results in errors that create more work and compromise data.
  • Poor collaboration — Issues with how team members work together hamper processes and stall project progress.

Purpose-built PS software that automates key processes can prevent the errors and delays that hinder productivity. In addition, contextual communication channels within these software solutions improve collaboration and prevent miscommunication.

3. Weak Execution

Even the best-laid project or process plans can be severely compromised by weak execution. The reckoning happens when established strategies and goals have to be implemented in the reality of everyday work. Weak execution is often the result of managerial expectations not aligning with real-world capacity and skills.

Frequent elements of weak execution include:

  • Limited differentiation — Being unable to highlight and communicate your company’s unique strengths will lead to major selling and/or execution difficulties.
  • Lack of business agility — An inability to adapt to changing market conditions and project needs can quickly cause issues.
  • Low customer engagement — Poor communication with clients leads to misdirected or unrealistic expectations that affect customer satisfaction.

The solution? PS companies need to create or adopt more agile processes that can adapt to continual shifts in how work is done. When paired with strong resource management technology, change management and continual growth are possible.

4. Strategic Debt

When a company’s planned objectives for either a project or the organization as a whole do not align with the objectives that emerge during the execution of everyday work, the resulting deficit between the two is known as strategic debt. This feeds a vicious cycle of unrealistic plans and prevents firms from fully aligning their vision with reality, which often creates complications and major expenses.

Frequent elements of strategic debt include:

  • Lack of leadership — Poor leadership or a refusal to take a leadership role in executing strategy causes misalignment and process execution issues.
  • Impaired morale — Only passionate employees can effectively execute strategies or realign damaged processes. If morale is low, issues will continue.
  • Stifled innovation — Strategies can degrade when creative thinking is discouraged, and there’s no room to re-envision how work is done.

Business strategy and everyday processes won’t realign themselves. Companies need a well-executed business process refresh, with strong change management to ensure the right strategies are adopted across the board.

What Happens When You Remove Friction from Your Business?

Spotting the effects of friction can be incredibly difficult, as the issues have typically existed for years, and employees have likely learned to live with them. But once you understand friction well enough to mitigate it.

According to Forbes, businesses lost more than $60 billion in 2016 due to the impact of friction on customer service. Internally, friction can easily break processes. Capterra found that 59% of employees have ignored approved processes for routine tasks in favor of another way they felt was faster or more efficient. Despite major deviance, 55% said their employer never found out.

Removing friction creates smoother processes that support employee needs, prevent complications that eat away at profit margins, and create faster, stronger services that improve client satisfaction. It’s a multi-pronged impact that benefits the company as a whole.

How is Professional Services Technology Shifting?

To learn more about the biggest obstacles PS firms face today, the macro technology shift happening in the industry, and the challenges that come with using general tech solutions, read “The Macro Technology Shift Impacting the Professional Services Industry” report from Kantata and S&P Global Market Intelligence. And to find out how your firm can adapt to the shifting market around you, be sure to check out our webinar with S&P Global Market Intelligence, “What Professional Services Organizations Need To Thrive in a Dynamic and Disruptive Market.”

KantataKantata takes professional services technology to a new level, giving people-powered businesses the clarity, control, and confidence they need to optimize resource planning and elevate operational performance. Kantata’s purpose-built software is helping over 2,500 professional services organizations of all shapes and sizes in more than 100 countries to focus and optimize their most important asset: their people. By leveraging the Kantata Professional Services Cloud, professionals gain access to the information and tools they need to win more business, ensure the right people are always available at the right time, and delight clients with project delivery and outcomes.



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