The pandemic affected every service industry trend over the past two years, and professional services trends were no exception.
Adapting isn’t easy—but it is possible, especially for professional services companies that take the time to plan for what the future may hold.
Today we’ll look at three professional services trends—along with challenges and solutions—to be aware of heading into 2022.
What professional services have been most affected?
Professional services comprises many industries, including services for:
- Audit and accounting
- Business consulting
- Financial advisory
- Managed services (network management, cloud infrastructure, printing, SaaS)
Key characteristics that set professional services apart from other industries are:
- The custom services they offer to clients
- The need to foster long-lasting client relationships
- Billing for engagements based on time and materials
Number three is of particular importance when it comes to professional services trends in 2022 and beyond. If billing isn’t efficient, accurate, and error-free, it will be nearly impossible for professional service firms to survive.
Professional services trend #1: Increased speed of business & technology
Over the past few years, advancements in technology moved quicker than anyone expected, and experts expect that to continue. As client needs and wants continue to evolve faster than ever before, successful firms will adapt their processes to maximize the speed of both their tech and their overall business operations.
To compete in a tech-driven market, professional services firms need to:
- Get data out of silos
- Upgrade from legacy tools
- Equip teams with advanced software
- Offer automated delivery and accurate insights to clients
- Digitize workforce management
By taking these steps, firms can provide increased transparency, accurate proposals, faster estimates, precise billing, and higher levels of cost-efficiency. Done correctly, your firm will also naturally make changes to provide more value to clients rather than simply relying on what’s worked in the past.
Professional services trend #2: Digital delivery
One of the biggest professional services trends to emerge in recent years is a lower barrier to entry created by digital delivery of services at lower costs. The industry has moved away from physical infrastructure, brick-and-mortar offices, and traditional business frameworks, and that’s opened up many professional services to competition.
To succeed in the new digital-delivery marketplace, professional services firms need to:
- Rely on data to inform all decision-making and planning
- Use artificial intelligence (AI), machine learning (ML), and robotic process automation to increase productivity and decrease delivery costs
- Consider building a supplemental network of internal and external talent you can call on as needed
- Capitalize on the fact that cloud-based tech has made advanced solutions accessible and affordable to companies of all sizes, while giving them the ability to scale quickly
- Optimize skills and talent to ensure you have a human-centered strategy that’s as strong as your digital one
With more than a third of professional services firms expecting 75% of their revenue to come in digitally over the next three years, this is a trend you can’t afford to ignore.
Professional services trend #3: Outcome-based business
Outcome-based business models work differently—and sometimes more effectively—than traditional rate-based business models.
Rather than basing your fees on the time it takes your team to achieve a certain outcome, this model focuses on the outcome itself, as well as the effort it takes to reach it. Within this model, risk is shared between the vendor and customer because all that matters is whether the outcome is achieved.
In order to make an outcome-based business model work for you, experts say your firm must establish and follow best practices that will:
- Streamline your operations
- Improve your delivery models, and
- Make proposal creation and billing faster and more accurate.
With customer expectations putting pressure on firms to be faster and more focused on the end result, offering outcome-based pricing—at least for certain projects—is one professional services trend every firm should consider.
How time tracking supports these professional services trends
When it comes to digital delivery and improved billing and business speed, time tracking software is already a no-brainer. A solution like Time Tracker not only tracks every billable minute with the press of a button, but it also simplifies timekeeping and boosts profitability—both of which benefit clients in terms of transparency, efficiency, and ease of payment.
What may surprise you is that time tracking can also benefit your firm if you switch to an outcome-based business model. Once you’re no longer billing clients for time, all of the efficiencies you find and capitalize on during a project stay with your business.
Did you find a way to cut two hours from every planning meeting? That time is yours to spend on other projects with no need to pass along those savings to a client unless you want to. The same is true with efficiencies you find through software upgrades, staffing changes, or time saved during any part of the process—as long as you track that time for yourself so you can see where your margins are improving.