In the past decade, as our habits have been completely overturned by newer and more affordable technology and the way we approach work has shifted following big societal changes, many industries have seen their fundamentals shaken.
Companies have had to rethink the way they do business to the roots to survive, and many new players have leveraged emerging trends to pose a serious threat to incumbents.
The business consulting industry is no exception. Growth has picked up after the decline following the Great Recession, and the sector is growing at a steady pace — about 3.4% annually in the United States.
Nonetheless, consultancies have faced, and continue to face, challenges that cannot be underestimated. In particular:
- More intense scrutiny by customers, whose expectations have changed and are now demanding more.
- Decreased prices of products and services offered, which makes it more difficult to deliver top and bottom-line growth.
- Additional complexity of projects, now involving multiple stakeholders and required to deliver more value with less resources.
- A changed workforce that no longer tolerates having to spend their working days with paper and manual processes and demands instead to be challenged with interesting and relevant tasks.
- Increased reputation risk to have data and sensitive information stolen or compromised.
Most in the industry think of data leaks in terms of when, rather than if.
Within the same timeframe, M-Files has worked with companies in the consulting industry to implement new ways to manage information that could fit with their changing needs.
In the next pages, we will present five key learnings about how information management can help consulting firms address the challenges above and how it can prepare the industry for even more change over the coming years.
Enhancing the Customer Experience
In a world where people can find most answers on the internet, the need for specialized knowledge is jeopardized. This is particularly true in business consulting. Twenty years ago, big consulting firms could leverage specific and secretive expertise to win customers; now this is no longer possible. Knowledge is spread everywhere, and is used by freelancers, boutique firms, purpose-driven consultancies, and internal strategy departments to help companies with their challenges.
Customers’ expectations are also changing. Billable hours are becoming a thing of the past, replaced by fixed or outcome-based fees that require the service firm to be more efficient. Similarly, customers now want to know what is happening in real time; a Deltek survey found that almost 40% of managers at professional services firms feel the pressure to be always-on. This represents a big change for an industry that, as Clayton Christensen puts it in a Harvard Business Review article, is used to generating recommendations in “the black box of the team room”.
Consulting firms are putting the customer at the center of their offering. They are doing this by focusing on two areas:
- Eliminating obstacles that prevent personnel from serving the customer best. Making information about customers and projects accessible when they are needed, to make better decisions and avoid the duplication of documents and requests.
- Reducing friction and costs to focus on delivering the service. Throughout the customer lifecycle, many processes are transformed from manual and paper intensive to automatic and digital, ensuring that personnel can focus on high value tasks.
A solid information management system can prove to be the cornerstone of the relationship between consulting firms and their customers.
The Role of Information Management
Where is the deliverable for that customer? Has it been reviewed already? Is this the most recent version of our final recommendations? How much time will it take us to respond to them with the information required?
These (and many others) are questions our consulting customers were struggling to give a prompt answer to. It’s not surprising that these are common questions lobbed around when documents are stored in different systems, exchanged via email, or archived on someone’s laptop.
When information management is done right, all information related to a customer can be accessed when needed; it does not matter if the employee is working from home, at the office or at the customers’ location — as is more and more common nowadays.
Clients Want More
A typical situation with archaic hierarchical network folder structures is one where more versions of the same document are available. That’s confusing and it can be prevented, leaving personnel to spend their time more effectively. This is also valid for different projects related to a customer engagement, past and present, so that better decisions can be made when consulting for a customer over an extended period of time.
Speaking of client projects, how each one of them is carried out represents a considerable portion of the customer experience. A lot of the project value is wrapped up in documents. Information management can standardize how these documents are created and handled, ensuring that project documentation flows easily to all involved, without messy versioning issues. Delays and mistakes also make customers skittish about the relationship, and that’s why project information management is a crucial part of overall project management, safeguarding crucial steps in a project lifecycle using automation to ensure no step is overlooked and no detail is left behind. Overall, information management can optimize how projects are set up, managed, and executed to meet customer expectations.
This starts with the initial RFIs and RFPs that consulting companies painstakingly try to prepare on time and with precise information. Then there are contracts in their different stages: from drafting to revision, from signature to renewal. With a system in place that moves the document from person to person, collecting input and sending notifications the moment a new action is needed, deals get closed quickly and personnel can start delivering value early. And when an engagement is closed, information management can support the finalization documents and closing the engagement out, as well as archiving, securing, and retaining (or disposing of) all necessary information.
With information management protocols in place, at any time and for any reason, relevant staff can access all needed documents with a simple search and a couple of clicks, considerably reducing the time it takes to move from information gathering to action.
Imagine a situation where a customer wants clarification on the work the consulting firm has carried out for them. The customer has doubts and wants reassurance that the correct processes have been followed and the appropriate information has been processed. What if you could get back to them with all the details in a matter of hours, rather than days?
This is what customer experience for consulting firms looks like with intelligent information management.
It’s a Buyer’s Market!
As customers get a more central position in the offering, the price charged for services provided comes under increased scrutiny.
Nowadays, it is easy for customers of consulting firms to shop around in search of fixed and transparent pricing. It has also become common practice for clients to ask for help on a single issue to a variety of service firms, increasing the pressure on top line growth.
Deltek found that 54% of COOs in professional services believe providing more value at the same cost is a key challenge for the future of their organizations. A second survey found that leaders at consulting firms are looking to get better control of costs, and particularly project costs, to increase profitability.
The competition is fierce. New entrants can leverage technology to provide low-end, repeatable services, without worrying about legacy systems that can be cumbersome and difficult to integrate into more modern processes. At the same time, incumbents want to maintain their edge, and to do so, they need to perform a balancing act between:
- Offering products and services at lower costs.
Organizations are looking at their processes and procedures to optimize how resources are allocated and avoid waste, as value delivered cannot be decreased.
- Maintaining good levels of productivity.
As they commit to lowering operational costs, consulting companies also look for new ways to serve clients. They try to deepen existing expertise while simultaneously diversifying into other consulting areas.
With information management, our consulting customers are saving time and money, while making space for their employees to focus on higher value opportunities.
The Role of Information Management
The cost of having staff wasting time on tedious, manual work is way more than can be appreciated in a financial statement. It is also visible in offices where the amount of file cabinets exceeds the number of employees, on desks that look more like a paper waste facility than a workstation, and in personnel that have to wander around offices to find the right piece of information, often having to ask colleagues, whose workday gets disrupted as well.
With the aid of information management, consulting firms can re-examine how processes and procedures are currently carried out, automate what can be automated, and eventually reallocate resources (personnel, space, time) to high-value activities that better serve the client and provide better returns.
We have seen previously how information management can significantly help in accessing the right information in its most recent version at the right time, no matter where it is stored. This breaks down silos and improves efficiency. We have also described how companies can benefit from digitizing and automating processes related to clients, such as proposals, contracts, and close-outs.
But there are also other areas in which efficiency can be enhanced, and therefore consulting firms that benefit the most from information management are those who take a serious look at how things are done differ in departments, and creatively implement the new system to rethink the principles behind key processes.
Accounts Payable (AP) is a good example of how this can be put in practice. It often features different steps, that can easily add up to weeks. Invoices are printed out and delivered to the right person for review and approval. This often requires collecting further documents to make sure the invoice is correct, and possibly involving different people in the process.
When done, invoices are sent back to the AP team for payment, hopefully by the due date. No wonder invoices are often lost in the process, or the due date simply goes by while some actions are still pending.
In a different area, employee training can also be cumbersome. Whether it’s for new hires or current staff, companies must make sure that people go through the correct documents regarding procedures and best practices. They also need to keep track of all training certificates to be able to prove who knows what and when somebody is due for a refresher. All of this often means a lot of emails and calls.
Now, imagine how it would be to digitize and automate both accounts payable and training — the benefits that could be reaped in terms of time saved accessing information, employee satisfaction, paper-free work environment and office space availability.
This is how information management can enable consulting firms to reduce costs and find new, more valuable ways to serve their clients.
Projects Are More Complex
When a consulting firm gets hired, an ad hoc team of experts is assembled, and a project is kicked off. Being able to deliver the project on time and within the constraints of the budget is fundamental to the success of the service firm and the satisfaction of its clients.
With customers more demanding and more careful about how they spend their money, project managers are under increased pressure to continuously demonstrate how the engagement delivers value.
Almost 60% of managers in consulting firms see projects becoming more and more complex. Partly, this is due to the involvement of multiple stakeholders to address a certain issue — subcontractors, independents, partner companies, but also the customers themselves. Often the setting in which a project starts dramatically changes over time and staying on track can be complicated in light of additional demands from the customer Consulting businesses that manage to provide reliable project delivery put significant effort in the following two areas:
- They streamline and automate all project related processes, particularly between different stages or milestones, to avoid getting stuck because somebody forgot to send an email or did not know about the most recent changes.
- They facilitate access to project documentation for all stakeholders involved, so that information can be accessed when needed in the most up to date form, even on-the-go.
Task management is not enough when it comes to project deliveries. Documents are at the core of every business consulting project, and effective information management is enabling our customers to maintain their reputation intact and their customers happy.
When you have the best experts in your team, you do not want them to waste their time searching for information, or filling in the blanks in a contract template, or duplicating a document because they could not find the original one in network folders. These are inefficiencies that slow projects down, raise costs and eventually cause consulting firms lose business.
Focus On Delivering Value
We have seen in the other sections how information management can automate repetitive, manual tasks such as data entry, project documentation setup, project close-out, contract management, RFIs/RFPs and more. With these things out of the way, business consulting personnel can truly focus on delivering value to the customer and improve business.
By bringing information together from different places and making it accessible in the most recent version — a clear goal for a third of consulting firms leaders, according to the Deltek survey — information management also enables project managers to stay on top of what is happening at all times. This means, for example, being able to answer customer’s requests promptly, and making relevant decisions in terms of scope should anything change in the setting of the project or should costs increase above a certain level.
And finally, with powerful digital workflow capabilities, the different moving parts of a project can be tracked and automated to stop projects from getting stuck because of miscommunication. This is often the case when companies rely on people to send an email to update on the status and kick off the next phase, or when face-to-face meetings are the only way to stay in the loop.
Imagine how it would be instead if team members would get an automatic notification when their input is needed, add their value to the project, and then click a button to fire up the next stage with no need to hand over information, as everything is available, when needed, in a single place. This is how projects can be delivered more effectively with information management.
A Changing Workforce
Consulting firms are made of people. The services they provide are only as good as their workforce. In the past decade, many things have changed in the way we all manage our personal and professional lives. Our expectations have shifted, particularly what we want from our job and our propensity for change.
It was once normal to stay with a company for most of a career, sitting at a desk 9-to-5, Monday to Friday, often working on trivial tasks. Today, we want work that is flexible, collaborative, temporary and highly technological.
Employees want to be challenged with relevant problems and new ways to address them. They want work that contributes to forming their identities. What is more, even if probably not as acute as in other sectors, even consulting is dealing with a shortage in skilled labour. In the survey conducted by Deltek, 44% of managers at consulting firms find it difficult to acquire new talent and 42% say they lack a successor for various positions.
Balancing the needs of older and younger generations presents a challenge. Consulting firms are committed on two fronts:
- Identify and retain new talent. We have seen how reputation is important when it comes to repeat business with clients, but it is equally relevant when filling roles and open positions on the job market.
- Ensure old and new employees stay. Having technology in the workplace is no good if it makes day-to-day work more complex, or if it does not become part of processes and routines because it is too complicated to use. Our business consulting customers are on the path to a truly digital workplace with the implementation of information management.
The Role of Information Management
Nobody wants to be in a job where hours are spent looking for a document needed to carry out a simple task, or having to go back and forth to colleagues and managers to get input on a proposal, or being singled out by HR for not attending last week’s training because the memo got lost.
Most of what we have seen regarding information management — securing information, enhancing the customer experience and generating significant time and cost savings — is also very relevant when it comes to employee satisfaction and meeting expectations.
When there’s a system in place that enables staff to find a document with a simple search, collaborate with colleagues without having to be in the same physical office, and provide notifications when an action is needed, it’s easier to foster a work environment where people can focus on solving problems that will grow the business.
Information management can also be easy to implement and intuitive to use. Imagine if a new software could be deployed to a full department within weeks, even in a particularly stressful period of the year.
And imagine if people could actually start using it right away, because they immediately understand how it works and the benefit, they can realize by making it part of their work routine.
This is how information management can make consulting firms a more appealing workplace for a modern workforce, while at the same time improving the days of those who have been with the company for some time.
This is how information management can make accounting firms a more appealing workplace for a modern workforce, while at the same time improving the days of those who have been with the company for some time.
Keeping Client Information Secure
Consulting services firms handle an enormous volume of confidential client information. From strategic and reorganization plans to details about mergers and acquisitions, sales and marketing data, personal identification data and classified business communications; the documents containing this information are delicate. When they fall into the wrong hands, the bond of trust between the company and their client is broken.
A 2019 IBM report on data breaches points to two main sources of threat:
- External — When a hacker attempts to gain access to information like personal identification numbers or credit card data, that they can then use to commit other types of fraud.
- Internal — When employees accidentally email the wrong person with a sensitive attachment, or a disgruntled former staff member tries to take certain documents with them.
One way or another, the cost for the organization is extremely relevant, both in terms of customer turnover — the same IBM report estimates lost business to be the biggest contributor to the whole cost of a data breach — and in terms of company image and reputation.
Working with consulting firms on this issue, we have found that a flexible information management environment can help address security requirements.
The Role of Information Management
“Who needs access to what?” is a great place to start the conversation about how to better manage and secure client information. Consulting services firms can greatly benefit from having systems and procedures in place to ensure that access to certain types of documents and information is only given to employees with relevant roles or in relevant groups at the right time. For example, if somebody’s input is needed when drafting an offer, there is no need for them to retain access to the document subsequently. With a similar logic, when staffers are promoted or leave the company, their access permissions should be modified accordingly and automatically.
The way documents are shared is another big piece of the information security puzzle. Consulting firms use emails and attachments widely to collaborate with colleagues and clients, and this is one of the biggest threats. Once an email is sent and a document shared, there is no control over who has accessed it, when, and what happens afterwards. Relying on information management means moving away from email attachments and into an environment that provides trackability of documents — as well as maintaining control and visibility on shared documents.
Flexibility in the choice between cloud or on-premises storage of information is another important factor.
Cloud has some clear benefits — namely easy maintenance, fast scalability and lack of upfront investment. And yet, whether to meet local regulations or customers’ expectations, consulting firms are often better off with a truly hybrid information management system, enabling them to choose quickly what information to store where.
Finally, with all this in place, it becomes easy to respond to audit requests. Imagine being able to prove, in just a few clicks, that you are following the most recent standards or that you are operating according to your customer’s desires. Collecting the right information and evidence in minutes rather than days saves everybody a lot of time.
This is how information security for consulting firms looks with intelligent information management.
The volume of documents and data any company is dealing with will only get bigger in the future. Consulting firms are no exception, and since time is their most valuable — and limited — resource, they need to make their wealth of information a facilitator of growth rather than an impediment.
We have worked with consulting customers for over a decade, and we walk alongside them through the many changes the industry has experienced. In this whitepaper, we have shared things we have learned along the way and made the case that information management enables the modernization and digitalization of consulting processes and procedures, delivering tangible improvements to both the top and bottom line.
It can make information easily accessible, while at the same time ensuring that control is retained across its full lifecycle. It can automate document-intensive processes, particularly those related to customers’ projects, so that no step gets delayed and deadlines are met. And it can enhance the workplace by cutting on paper and costs, making it possible for the staff to focus on things that really matter.
We know that information management, and M-Files, is the pathway to improved efficiency for consulting firms. And we want to close with two reasons why consulting firms consistently choose M-Files for their digital transformation.
Ease of implementation. There is no need to move your files from where they are, M-Files fits with the way your employees are working and with the tools they are using. It is also scalable, and that means that you can start with a pilot and then expand its use as you see fit.
Change management. M-Files is simple and easy to use, even for people who have no technology background. On top of that, our consultants and services are with you along the way, to make sure you can make the most of its implementation quickly.