Why professional services companies must invest in digital transformation
Digital transformation has caused professional services companies to reimagine their client relationships, analytics strategies and corporate cultures
Professional services companies are already benefiting from the implementation of digital technology, but to profit fully, their employees and clients need to understand what is driving that investment.
Every company has recently spent money on digital tools in some capacity and experienced efficiency savings and revenue boosts as a result. Yet, many pain points remain that could be solved by further investment in tech.
Chief digital officer at RSM UK, Chris Knowles, says one barrier is that firms worry they will not see any significant return on investment for some time. Yet he insists that the gains can be swift, especially if a company has a strategic plan when it comes to digital. This includes thinking clearly about how end-users will adopt popular technologies such as data analytics, automation or client portals.
“We had a big investment push around analytics and had a high level of adoption within a matter of months,” he says. “The buy-in internally was fairly easy to achieve, once we had demonstrated the value that analytics can quickly bring to make time spent on client delivery more productive and value-adding.”
Dan Guest, chief operations and commercial officer at Mitie Technical Services, agrees that companies need a strategy and must be clear on the business case for investing in any digital technology. “The plan has to be communicated to everyone, including your people and clients. The direct impact on them might not be obvious immediately,” he says.
Covid-19 has certainly accelerated digital transformation investment across professional services.
Simon Drake, SVP and UK general manager at Hitachi Solutions, says the pandemic forced many providers to look closely at how they could improve their inefficiencies. “We all had to think about how to take what we do and replicate it very, very fast using digital tools,” he says. “How could we use cloud technology to deploy services rapidly and consistently, whilst respecting each client’s individual needs? The pandemic has created a lot of opportunity, but it has also meant that how we engage with clients has had to change very quickly.”
One issue that prompted businesses to invest in digital sooner than they perhaps might have done, was the difficulty they had in getting their national or international teams together to collaborate and innovate. With everyone working virtually, there was a risk that operational and behavioural change would be harder to achieve.
Amy Smart, digital transformation partner at Grant Thornton UK, says that the pandemic accelerated digital adoption significantly. “Change is hard, but like many companies the pandemic forced adoption of a more digital way of working. It gave us permission to push out digital initiatives within a few weeks which could have otherwise taken years to implement,” she says. “Digital also allows us to unlock the power of our community. We have all these people with brilliant ideas and different skills who, with the right tools, can really contribute to our journey and help us get there quicker.”
The pandemic has created a lot of opportunity, but it has also meant that how we engage with clients has had to change very quickly
She adds that when professional services companies do invest in digital, they need to ensure they capture and manage the mass of data they generate effectively. Data must be in the right place at the right time to unlock opportunities from technology. Of course, better use of data also means more actionable insights that will benefit clients in the short- and long-term.
Tom Amies-Cull, global chief operating officer, media at Dentsu International, says one of the biggest wins for his global company is that the business is now more integrated. This means its teams can offer clients a more consistent and innovative service. “You have to think of this whole process in a holistic way because digital transformation is fundamentally business transformation,” he says.
“You have to start with the impact that any change will have on your people and your clients, and then link that to what you are trying to do as a business. This approach will make change much more manageable.”
Dentsu International is currently rationalising its number of brands from around 60 to six, and digital tools are enabling the change to run more smoothly. Technology is being used to connect different teams and reduce some of the silos and local issues that existed before.
As any business invests more in digital transformation, the efficiency savings in terms of money and time become more obvious. Yet, there have also been some big wins for professional services.
Companies have moved quicker than some might have imagined to a system in which electronic signatures are used. This is saving time and improving a service provider’s revenues compared to the traditional system of printing or scanning. It is also proving to be a useful entry point when it comes to encouraging clients to interact more closely with providers online.
This is certainly progress because, as Knowles notes, the broader professional services and business-to-business sector has been late to the party when it comes to moving clients to an online relationship. “To further encourage this over the next few years, we have to think about how we can add more value to clients digitally,” he says.
What digital transformation has done is raise expectations of providers among their employees as well as their clients. As consumers, we have all become used to instant responses from business-to-consumer companies, and this is putting pressure on professional services firms to up their game.
Digital transformation is also changing the culture of many companies, especially as people adopt hybrid working.
Drake says digital technology has fuelled a change whereby people are now working quicker and have adopted more of a test and learn approach. “With digital tools people feel empowered to take a few risks in a relatively safe environment,” he says. “Clients are also responding faster and making decisions quicker.”
This is a crucial point. Professional services companies and their clients need to be on the same digital page when it comes to technology and how they use it day-to-day. There will also be times when providers need to be agile enough to work within the constraints of their clients’ investment in digital so far, and arguably vice-versa.
Ultimately when it comes to digital transformation, professional services companies need a clear strategy and to be able to set and communicate long-term goals. All companies will make a mistake or two along the way, but the secret is to learn from those so that the provider and its clients gain value from what should be an ongoing investment.