Digital transformation is somewhat of a double-edged sword for professional services companies. On the one hand, increasing digitalization causes them with enormous challenges. Altered customer behavior and rapidly changing markets force them to adapt or overhaul their business models. On the other hand, digital technologies open for them completely new possibilities to address a new or larger target audience and offer new services.
Thanks to digitization and the bridging of geographical distances, customers can now choose between more providers than ever before. Their demands have increased accordingly. If a service does not meet their expectations, they are willing and able to switch to another provider. Thus, customer satisfaction and loyalty are increasingly hard fought for goods.
Digital support for professional services companies
Using digital tools instead of doing things manually and replacing Microsoft Excel with professional sales and project management software can yield positive results for professional services companies. However, digital transformation requires more than that.
Inefficient processes, make-do software solutions and heterogenous IT landscapes is where digital transformation comes in. Its goal is not to merely migrate existing processes to the cloud, since resulting improvements would be minimal.
The central question of digital transformation philosophy is: What would ideal processes look like?
Digital transformation comprises four dimensions:
- Optimizing processes: What can be automated? Which processes require more transparency? What should happen more efficiently?
- Empowering employees: What can be done to simplify daily work? Which processes can be standardized? Which tools are needed to increase productivity?
- Engaging customers: Which wishes does your clientele have? How to better understand it? What do they require that is not yet offered?
- Transforming products: Which complementary services can be offered? Where can service be improved?
There is no blueprint for digital transformation. Each business has to proceed according to its individual needs. It should not happen from one day to the next, instead to be accompanied by effective change management.
Frequent challenges and their digital solutions
The services industry includes many different businesses, from management and IT consultancies to building and manufacturing companies. All have their individual challenges. Yet they also share many pain points, such as slowing revenue growth, increased competition and growing price pressure. They also find it difficult to recruit and retain new talent.
Winning new customers, retaining existing ones
The two pillars of business growth – winning new customers and retaining existing ones – are crumbling for many services companies. To strengthen them, maintaining good relations with prospects and customers and providing a great experience is essential.
A rule of thumb says that one third of annual revenue should be generated from new customers. For this to work, businesses must expand into new markets and enlarge their product portfolios. Differentiating themselves from competitors must be part of this strategy. Targeted messaging and offers help to generate and convert more leads.
To win new and follow-up orders from existing customers, they must feel like their initial investment has paid off. Delivering projects on time and within budget is a must.
Digital solution: Professional sales automation software helps not only to keep an overview of existing customers and your history with them but also to detect the most promising new leads on which to focus. While digitizing project management (moving away from Excel to dedicated project software) supports managers to better plan and control projects and to make adjustments should issues arise.
Utilization and productivity
Businesses must be attractive workplaces to attract new hires. Modern technology, including the possibility to work from home, is an important factor for millennials.
The quicker new employees can work productively and profitably, the better for a business’s bottom line. However, even longtime team members often fall short of the minimum billable utilization of 75 percent because too much time is spent on non-billable tasks and manual processes.
Digital solution: There are two possibilities to rev up employees’ productivity: one is to reduce the amount of time spent on routine tasks without added value to the company. The other is to automate tasks where possible.
If a team has to continually switch between different solutions to finish their tasks or to find information, inefficiency is an unavoidable consequence. A seamless solution without disruption of media speeds things up considerably.
A solid onboarding processes of new hires accelerates the time until they can productively work on projects. Apps like Microsoft Dynamics 365 also support employees with business process flows that guide them through their tasks efficiently.
Project and Resource Management
Besides the productivity of team members, project and resource management can also plunge projects into trouble. To find the best resources for a project, managers have to keep several factors in mind, including utilization and skills.
During project execution real time KPIs are essential to ensuring customer satisfaction. Is the project proceeding according to plan? Can deadlines be met within the available budget?
Digital solution: Despite being used widely in companies for project management, Microsoft Excel is not an effective tool to manage projects and resources. Once a certain number of projects, team members, and project tasks is crossed, there is hardly any way to keep overview in the calculation tool.
Professional project management tools simplify staffing, planning and controlling projects. Better overview and embedded intelligence allow for the best skilled available resource to be assigned to a project. Stress-free and intuitive time and expense tracking guarantee timely and errorfree bookings for invoicing.
Specifically for professional services companies: End-to-end business cycle in one solution
With Dynamics 365 Project Operations Microsoft has developed a solution that specifically caters to the needs of project-based services companies. The app covers the entire project business, from sales to finances.
Project Operations combines the best of Microsoft’s project management capabilities, unifying Dynamics 365 Project Operations, Microsoft Project and Dynamics 365 Finance in one app. It will become available in October 2020.
The manufacturing industry is often the spotlight of discussion of digital transformation. Yet professional services companies benefit just as much from streamlined processes through digital technologies. To meet their challenges, they need improved visibility of processes, customers and projects.
An IT solution with minimal disruptions of media is a proven way for success. Therefore professional services businesses that want to work more efficiently and productively must tackle their digital transformation.
Are you thinking about tackling your company’s digital transformation? We are here to help you. Get in touch and tell us about your vision.