Why Do Professional Services Firms Need To Embrace The New Economy?
As Tim ’Reilly wrote in his recent bestseller WTF?: What’s the Future and Why It’s Up to Us the new economy’s business model relies upon on-demand services and access to talent, automation, and an incredible user experience.
Tech companies typically already function within this model. On the other hand, even the top professional services companies often fall short of their potential to deliver and enjoy value.
In an age when clients experience their own digital transformations and disruptions, at the very least, this outdated business model does not set a good example. Steve Glaveski said he spent several years working for traditional management consulting companies.
He then founded Collective Campus, a boutique professional services company that focuses on innovation. He says that besides not being able to deliver what modern clients want, the traditional model of professional services firms makes it inefficient and just about impossible to scale without adding more headcount. With his firm’s focus on innovation, Glaveski says they achieve 4-5x the revenue for each employee than the average of the top firms. He believes the only ones who approach his company’s results only do it by still managing to charge extremely high fees, something he does not believe they will manage to rely on for long. Today’s clients do not just want a great experience; they also look for value.
He also mentioned that typical employees in those other firms work up to 50 hours per week. In his firm, he says that an average employee works less than 35 hours a week. He is not interested in squeezing more hours out of each of his people — but in implementing the types of efficient practices that allow them to get more done in less time. That obviously makes his firm attractive to the sorts of employees who would rather labour productively to have more time away from work.
Finally, he also optimistically predicted that as his business continued to evolve, he could drive revenue per employee up by at least another 20%. That is without working longer hours.
Some key drivers of his professional services firm’s efficiency are automation and the steps they take to improve agility.
Two Ways Professional Services Firms Need To Change
If accounting, consulting, and other professional services firms want clients to view them as delivering value, they first need to address their own infrastructure and delivery models. After all, why would productive companies want to hire a professional services company with a business model that is more outdated than their own? And since the real value that these services deliver relies heavily on information and analysis, would not managing that information and decision-making capability look like a good place to begin?
With that in mind, look at how improving in two key areas — automation and agility — can boost both the value that professional services firms can offer to clients and the returns from these efforts that they can enjoy:
Automate Almost Everything
Are six-figure consultants for a management consulting firm wasting time with manual processes that the right tools could easily automate? Do they expect their high-value clients to do the same to work with them?
Manual processes waste time and make errors almost inevitable Consider an example of a typical, old-fashioned process to manage information.
Glaveski mentioned that consultants should not be billing clients at their top-dollar fees to labour over expense reports. Typically, this process takes time because it involves working with complex spreadsheets. Then the spreadsheet often will get attached to an email and sent on to other departments, who might also work on it and forward it to another department, and then the next department needs to review, sometimes update it, and then return it.
Inevitably, some of the recipients may overlook the email in their crowded inbox or because it got routed to their SPAM folder, so that will hold up the process.
Even after everybody attends to their tasks and returns the document as an emailed attachment, the original consultant has the task of sorting through all the edits to collate changes into a verified and usable document. Obviously, this very typical method of managing information will waste time and make it easy to introduce errors.
Also, during the hours, days, or weeks that this spreadsheet must circulate, nobody has access to the updated information. At the same time, having this document circulate through a variety of devices leaves gaping holes in security.
While the right people must wait for the updated document, it is possible that the wrong people can access at least some version of it. How an automated system leads to a more efficient business process.
With an intelligent information management system like M-Files, the original document can remain in its original storage location. This location could be a central repository or some other kind of storage, even the original owner’s server. Everybody in the chain gets a message that alerts them they have a task to do. This message simply contains a link to the shared storage place where the document resides. Responsible parties can add in their own edits and comments, which are retained, along with the original data in the document.
Once everybody has responded to this task, the spreadsheet’s owner can simply look at the central document to see updates and comments and a complete history of who did what. Even better, it is possible to set security roles, so some users may only be able to view the document, while others can make edits. People who have nothing to do with the document will not even know it exists.
Enjoy a reduction in labour-intensive, error-prone, and boring tasks When professional services firms do things the old-fashioned way, they tend to accumulate lots of labour-intensive, manual, and frankly, demotivating tasks. Instead of having six-figure, high-billing consultants attend to these duties, more progressive firms may choose to either outsource or hire employees that specialize in just this kind of work.
Either way, an intelligent information management system can help automate such jobs as data entry and filing by pre-filling fields, suggesting tags, and enforcing editing rules. Again, if these kinds of jobs get done by outsourced workers or full-time employees, the system will make it easy to set security roles to allow all parties to collaborate on specific documents.
In addition, these advantages will not just carry over to mundane tasks. Firms may need to outsource certain kinds of talent that they do not always keep on their full-time payroll. Examples might include technical writers, graphic designers, or even specialized consultants. Either way, having the right information management tools will also make information easy to share in a secure way. At the same time, the smart tools will help workers reduce the chance of errors.
Reduce Costs And Waste To Improve Agility And The Customer Experience
Client expectations for professional services firms have changed in the past few years. They have experienced their own digital disruptions and expect to hire assistance that is at least as progressive — if not more — than they are. Clients do not want to pay a large fee and then accept a deliverable some months or years in the future. They want transparent sharing and collaboration, self-service options, and an efficient use of resources. Meanwhile, they expect a focus on security to keep their sensitive information safe and just as important, in compliance with any regulations they might operate under.
In fact, Harvard Business Review said that the most common reason that clients seek out professional consulting is to gain information. Some obvious examples might include survey results, feasibility studies, or business analysis. Yet, HBR also pointed out that information is very often not really all the client needs. They may need data or analysis, but really, they need to understand how to use the information they are given or even if they can find the answers that they seek from information that they already have but may not know how to use.
In any case, this underscores the point that professional services companies that are in any kind of business that relies upon using, supplying, or analysing information should make certain that they demonstrate that they are particularly good at managing information in the first place.
Using information management to improve the customer experience as M-Files noted in a previous white paper on the topic of future-proofing professional consulting services, client expectations are changing quickly. They do not just want advice or even information, they want on-demand information, more convenient and helpful interactions, of course, help with managing their own information and analysis more efficiently.
While clients work on improving their own agility, they demand it from any firms they pay to assist them. As an example, consulting firms often need to access and control information that is spread out among various systems or repositories. This information may vary by vendor, client, employees, and outsourced contract workers. CRMs, server folders, cloud storage, or even laptops and phones could house various documents. Without some way to connect all this disconnected data, the firm will always waste time just trying to find what they need, much less trying to demonstrate good control and management.
Professional services firms without this agility will disappoint clients. In contrast, demonstration of better information management skills will help them offer more value and perhaps even, set an example that the customer may want to follow.
An intelligent information management system, like M-Files, can connect with and integrate with disparate data sources, so users just need to rapidly search for and access it from one login and one interface. Even better, they can enjoy this access 24-7, typically from any internet-enabled device.
Having security built into the information management system besides having simple and transparent access to documents, M-Files allows users to access their data from anywhere with an internet connection and with any sort of desktop, laptop, or mobile device. Still, the certified security system will encrypt this data, so only the person who is supposed to have access can get to it.
The system also allows sophisticated role setting to control who can view, edit, or even delete the data. If regulations or company governance policies change, it is also simple to change permissions to accommodate these new rules.
Even better, the system will keep an audit trail. If something irregular does occur, it is easy to trace its complete history and if needed, recover to a prior version. From data ownership or even an IT perspective, these sorts of systems are ideal because they are secure and simple to keep track of. From a user perspective, they are easy and seamless to use.
Reducing redundant, obsolete, or trivial data ROT stands for redundant, obsolete, or trivial data.
In other words, it is information that costs more money to keep than the potential value that it may provide. As M-Files mentioned in an earlier blog post, large companies may waste over $30 million a year just to maintain data that they do not need and that may hamper their ability to access the information they can use.
In some cases, the information may not have much value to the organization, but it could pose a serious risk if it fell into the wrong hands. In other cases, businesses might be able to use the data but because information management has become disconnected and disorganized, nobody can find it or even knows it exists.
Professional services firms may be particularly vulnerable to this kind of data mismanagement just because of their history of handling information from multiple clients and other stakeholders. They are more and not less at risk because some of the information they might have filed in a cabinet or stored on somebody’s laptop may not even belong to them but to another business, even if that business is not their client any longer. Even if the firm does not need to worry about a big security risk, they still must pay for storage, security, and perhaps, system performance problems.
Keeping top talent happy as a professional services firm, you succeed or fail by the quality of your information and of your people. High-quality employees will expect to work with a modern information system that they can feel proud to use and even show off to clients. A system like M-Files will also allow employees the flexibility of securely accessing information in their office, at home, or at a client’s worksite. This sort of flexibility has been shown to improve productivity, agility, and even morale.
Besides offering remote access, M-Files will please employees because they will not have to waste time digging through their email, a CRM, or other data stores to find what they need. They can either access documents through the system’s intelligent search capabilities or simple, shared links. Such collaboration tools as co-authoring, version tracking, and shared editing will also make it easy for your employees to work with their team and clients. Also, workflow automation will help keep business processes on track and reduce frustration and wasted time.
How M-Files Enables Competitive Professional Services Companies
With AI and certified security capabilities, consider some highlights of the features that will help professional services companies compete for top clients and top employees:
Information tracking: The system tracks and displays the status of documents. It provides version control, and the audit trail will let authorized users know exactly who did what to each piece of information at every stage. This gives both the firm and their customers full transparency during the project lifecycle.
Automated workflow: The system can push each document through each stage in its planned lifecycle. In addition, alerts will ensure that the next responsible person knows what they need to do and where to find what they need.
Sophisticated, certified security: M-Files uses data encryption to keep information from prying eyes. Data owners can set security roles to give each user the access they need, and it is easy to change these roles in case of new regulations, government policies, or even a change in an individual employee’s position.
Collaboration tools: Nobody needs to move a document to another system to enable efficient collaboration. The system can handle multiple co-authors and collaborators with co-authoring and commenting features. Meanwhile, all changes get tracked in one place, so it is easy to collate changes to a final document or track down issues.
Data accessibility: M-Files integrates with most common repositories and systems. It is also possible to point to documents and datastores that the system can use, even if those original documents still reside outside the repository in such diverse places as a server’s file folder, another system’s repository, or cloud storage.
Information transparency and self-service: Today’s clients want anywhere, anytime access to their projects, and that’s exactly what M-Files can easily provide. They can login to the same system as the firm’s consultants do to view work status, documents, and the latest information contribution, and what tasks still need to get completed. In turn, each team member will have an easier time finding the information they require and even handing their completed piece off to the next participant.
M-Files can enforce the kinds of efficient workflows, transparency, and ease of use that all sorts of management consultants and other professional services companies will need to provide value to customers and in turn, enjoy more value from their investment.
It’s Time To Transform Through Intelligent Information Management
Is it time to digitally transform your own professional services firm to remain more competitive and profitable? Since M-Files can access data outside of its own repository, it will not even require a long and expensive migration process to use. In turn, it can start to pay for itself the first time a firm needs to show a client or even a hot recruit the efficient and digitally evolved way that they manage information.
One of the first questions that many clients may ask is how they can learn to manage information as well as the firms that rely upon M-Files. Of course, besides demonstrating smart information management strategies, M-Files will help firms save time and money, avoid risk, and focus on the important facets of their jobs.
To see M-Files in action with your own firm, you can download a free trial. Alternatively, contact us to have an information management expert answer your questions and walk you through a demo.
Very often, transforming a firm means not only offering more value to clients but also enjoying more value out of every engagement.
If a professional services firm can transform with nothing more than the right tools, why would they object? Not only can that firm reduce costs and effort, but they can also provide an example that will help their clients do the same. That is exactly what M-Files can do for your professional consulting firm and your clients.