In this article we explore three of the top trends across the services industry as we approach 2020.
‘Disruption’ has become a familiar buzzword over the last few years and nowhere more so than in the professional services industry. Customer expectations are evolving; the competitive landscape is heightening and technology continues to change the modus operandi of professional services. With these factors in mind, companies must adapt and evolve with changes quickly and effectively in order to remain competitive.
The market for professional services is changing, from what clients expect a good service to look like to the way in which they engage with services companies.
Against a backdrop of rapid digitisation, a shift towards cloud-based technologies and the growth of agile ways of working, clients today expect “more value, a higher quality of work, and a faster delivery of solutions and services”, according to a survey of 576 executives by Deltek (a global provider of software and information solutions). The main demand is the requirement for clients to own strategic change rather than be driven by tactical change.
These heightened demands are further reflected with 89% of services executives [stating] that “they had expanded services offerings significantly for clients [in recent years].”
Graeme Adams, Delivery Manager for TEKsystems, suggests that some notable client changes in the UK services market include:
These changing behaviours are challenging the more traditional packaged service models and encouraging companies to move towards a value-orientated, solutions-based approach underpinned by a strategic partnership.
Many companies are still relying on the expertise of their people as a key differentiator, however, the pace of change and the fact that consultants tend to move jobs more regularly, means it is more critical than ever for companies to put client outcomes at the heart of their strategies in order to stay ahead.
Fiona Czerniawska of Source Global Research says, “it’s a rare consulting firm that puts itself in its clients’ shoes”. Moving forward, however, it is expected that we will see more professional service firms shift to value-based strategies as they try to become ‘trusted advisors’ rather than just service providers.
Focussing on client service has suddenly become the only metric that matters.
The level of competition in certain markets is also becoming more increasingly intense over time each year according to the Nubik survey, “80% of [executives] said they had noticed [this increase in] competition in the last 12 months.”
Although the big four – PwC, Deloitte, EY and KPMG – still hold a sizeable market share, these firms are no longer enjoying the monopoly they once had and are being increasingly challenged by smaller competitors, who offer unique alternatives to traditional consultancies. They offer considerable price advantages from lower operating costs and agility in their practices.
A client can choose a number of ‘a la carte’ services from a selection of these smaller consultancies which also offer considerable price advantages from lower operating costs and agility in their practices.
In parallel to the shifting customer and competitive landscape, technology is evolving at a faster pace than ever and this is changing the way clients use professional services as well as the services that they offer.
It could be said that digital technologies are the biggest disruptor of all. Advancements across an array of platforms including social media, mobile devices, cloud, big data and AI are collectively progressing the industry through automation, speed of delivery and enhanced customer services.
There are mixed views as to whether technology advancements create opportunity or threat for professional services, with concern emerging that AI could replace the employment opportunities of the future. However, according to Nubik, “ to the professional services industry and [could also be considered] to redesign the way these companies are conducting [their] business”. Further, according to a LexisNexis report it is unlikely that jobs will be replaced by robots (just yet).
Overall, the industry is currently in a state of flux and is showing no signs of slowing down. With 2020 just around the corner it will be important for firms to embrace these changes to ensure their future in the market next year and beyond. Traditional services models are becoming a thing of the past and the demand of a more complex client is forcing the traditional consultancies to expand – creating new opportunities for the smaller, more nimble players.
Technology will continue to play a huge part in the way the market looks and feels and could create huge opportunities for those who can adapt quickly or even get ahead of the curve.