Today we continue our exploration of how technology is impacting different industries. So far, we have covered the financial, media and health care sectors. What is happening in professional services today? How are consulting firms keeping pace with changing technology? What about accounting firms? Law firms? How has the rate of change and technical capabilities impacted their businesses? More and more are investing in technology to support their business strategies — so let’s take a closer look at how they’re doing it.
Knowing Your Industry
The current rapid pace of technology innovation and change impacts all industries and has quite a unique impact in each segment. Professional services is all about positively impacting your client’s business, and the understood expectation is that the firm knows more than the client. We believe this notion even extends to technology: as a professional firm, the outside expectation is that you have it all figured out, and the technology you use should be no different. So what are the big technology trends in professional services?
- Internal Collaboration: Since the early days of email and instant messaging, this has been an ongoing trend. But today, with an increasingly mobile workforce in the professional services space, the industry has reached new levels of collaboration driven by the need to leverage specific expertise within the firm, as well as the flexibility needed to serve equally mobile clients. Cloud storage and SaaS apps have made file-sharing and collective document editing the norm.
- Instant Messaging & Video Calls: Collaborative workspaces for documents, issues and tasks can be found in almost every industry today thanks to free and enterprise-class apps. All of this technology is focused on sharing knowledge and making collaborative decisions for the client. Employees and clients want and need access to all content via mobile devices, so anything that slows communication and sharing is a major hindrance to any firm today.
- Business Analytics: Today, your competition is using analytics and big data to gain insights into client relationships across the entire organization, current project activity, client profitability, client risk, service quality and opportunity. Business analytics tools offer a holistic view of client relationships that goes way beyond the early functionality of CRM systems for simple contact management.
- External Collaboration: On a daily basis, professional services firms are connecting with clients in new ways to collaboratively work together on documents, prioritize work, discuss issues and provide deliverables. This is how internal knowledge and collaboration bring the client into the right conversations and allow them to view the right documents and contribute their own views. There is a lot of opportunity here to blend personal service with technology that enhances the client experience.
- Artificial Intelligence (AI): With so much data and complexity, we are now beginning to explore AI to better understand vast scopes of information and decision options. This “trend” is still in its early stages, but is certainly one to watch closely as there is very high potential value when the technology becomes capable of connecting the right data to provide new perspectives on decisions that need to be made. Think of the impact when AI can be used to manage, discover and complete massive amounts of data analysis. AI is already disrupting many positions in professional services, so harnessing that power to help you become an industry disruptor instead is essential.
Your IT Budget
What is the right level of IT investment for your firm? Of course, this depends on your business strategy and what stage of IT maturity your capabilities are at today. If you have to catch up with your competitors who are at more advanced stages, you may need to invest more to close the gap. In general, because IT is such a critical component of the services you deliver, it’s reasonable to expect an IT budget to be between 5 and 8 percent of gross revenue for most professional service firms. Remember, as more and more applications and tools converge with our everyday business practices, every budget is an IT budget today.
There is nothing more important to a professional services firm than the trust of its clients, and nothing can be more disruptive to a client’s trust than a data breach. Whether you are a law, accounting or consulting firm, it is imperative to have the right security in place, leverage best practices and have regular security audits to know where the gaps may lie. Additionally, consider your security policies regarding data that is most at risk — client data on mobile devices. Is the data encrypted? Is storing it on a mobile device even necessary? What expectations are in place for your staff to protect the device and its data from theft? What are your procedures in the event of a data security incident? Strong internal practices coupled with audits of any third-party applications that you use (web applications are the most common type of data breach, according to Verizon) are absolutely essential to professional services today.
Compliance requirements in professional services will obviously depend on the services provided. They can range from pretty clear (such as CPE/MCLE credits for continuing education) to very complex, like SEC/FINRA regulations if you have business units recognized as a broker-dealer. However, if any industry has experience adapting to shifting compliance requirements and ongoing changes, it is professional services. With years of history around compliance audits, adhering to new and changing regulations is not that great of a challenge for professional services firms even in the face of a rapidly changing IT landscape.
Business and technology are complex realms, but when they are effectively connected, they can be a powerful asset for your organization. Be sure you have a trusted partner looking out for how your business should be leveraging technology most beneficially. This may be your CIO/COO, your outsourced vendor, or a combination of both. Simply recognizing that the world is changing faster than at any other time and understanding that you have to adapt is half the battle.