Nancy Grimes Knows: Professional Services Trends To Look Out For In 2019
Firms are beginning to hire Executives who can run the business side of things and with planning and forecasting there is more predictability and it is helping drive profits.
Understanding how professional services businesses should evolve with the changing landscape in 2019
By Raj Narayanaswamy, Co-founder and co-CEO at Replicon
With another New Year’s Day come and gone, many have begun to envision what the year ahead may hold for them. It’s no different for businesses – and especially in the constantly evolving landscape of professional services, it’s helpful to consider how exactly this new landscape might redefine the status quo in 2019.
Wondering what to look for? Here are the top trends professional services organizations should expect in 2019.
Providing a Highly Tailored Customer Experience
In today’s customer-driven climate, services businesses are learning that each customer expects personalized contracts, services, processes, and more. Competitive services firms are obligated to adapt to each customer’s workflow, resulting in little to no standardization in their own ranks. Without a centralized system, this arrangement quickly becomes unsustainable. To deliver a customer experience unique among the rest, look for technology solutions that can help manage your organization’s processes as you navigate different workflows for each customer.
Globalization: The Double-Edged Sword
Today, the size of a business is irrelevant – everyone wants best-in-class talent available for their organization, and have begun utilizing resources spread across the globe. Similarly, opportunities for broadening the customer base drive interest in globalization. The motivations are many-faceted: the need for specialized skills, clients requesting work done in those locations, greater availability, lower costs, and more. But expanding both literal and figurative boundaries can be a mixed blessing – while a distributed organization paves the way for new opportunities, it also disperses both the workforce and global customer engagements. Solutions with unified platforms can allow services organizations to manage global customers and project resource metrics with more confidence.
Billable Hour Who?
Once considered the standard, the billable hour’s iron grip on professional services engagement models is beginning to slip. While customer preference may be steering the ship, services firms should also be considering their own best interests. When limited to the billable hour, the potential to improve average revenue is finite. Sooner rather than later, resource time and availability will be intrinsically tracked and tied to the outcomes produced – and as the world moves towards a subscription-based economy, understanding how to effectively optimize revenue and other metrics is fundamental. Expect a rise in the number of fixed-bid, milestone, and value-based pricing engagements in the coming year, and make sure you have the tools in place to understand how to deal with them.
Forecasting: The Rising Star
Perhaps the most involved trend on this list, forecasting, is quickly finding its way to center stage for services businesses. Firms looking to optimize profitability should expect to forecast everything: Customer engagements, fixed-bid project profitability, effort-estimate accuracy, resource utilization, skill requirements, performance trends, and undoubtedly even more as the year goes on. With advanced forecasting, businesses can reference historical data, optimize the present, and better plan for the future, to ensure profitability for both hourly and fixed-bid projects.
The professional services market is dynamic, and effectively managing a PSO requires staying in control of these dynamics. With the billable hour in decline, and services businesses increasingly locked in to fixed amount contracts, accurate estimates and project tracking are key. Move into 2019 at full steam prepared for the trends that await your services business in the coming months.