Professional services are changing, mainly because of the emergence of new technologies. In this regard, it is relevant to look at the trends that will shape the firm of the future. Rufus Franck, founder of Consultants 500, gives an interesting overview of the situation in his article The Future of Professional Services Industry . His extensive experience of more than 16 years in the professional services industry has led him to create a virtual platform which allows businesses to connect with each other to find business advisors.
Changes for Professionals
Everyone needs professional advice. Businesses and individuals do not have the specific knowledge and experience of specialists who can help and guide us. In fact, it is evident that this industry is sustainable longterm. It also consists of a major part of the economy, particularly in the western world. Rufus Franck says that the major changes that will occur in this industry will mainly affect accounting, law and engineering fields. He mentions there will be a shortage of skilled labour, and a replacement of low-level services by technology in these areas. Although technology is a major cause of disruption, it is still accompanied by several other drivers of change, including:
- Deregulation: the growing trend toward deregulation now makes innovation possible in the market;
- Globalization: more and more professional services are outsourced, especially those related to low value-added activities;
- Demand: Customers focus on the value of services offered, seek fixed prices, and want transparency. In addition, they can easily compare prices as it is easier for them to search;
- Fierce competition: new players coming from emerging markets and innovative business models.
Nevertheless, it remains interesting to look at the role of artificial intelligence and digital technology in the professional services industry.
Technology: a threat or new opportunities?
We could say yes and no. In general, it could be a threat for professionals who cannot adapt, but a gold mine for those who know how to use it. For example, we expect technology will replace low-level services such as those related to research, analysis and comparison of information. These will be more and more automated and standardized. Indeed, some tasks will be performed directly using artificial intelligence, big data and machine learning: For example, the exponential growth in computing power combined with increasingly sophisticated approaches to artificial intelligence mean that systems like IBM’s Watson can potentially do the hard work of reading and analyzing vast amounts of legal opinions or medical research.
If they are not automated, these low-level services will be outsourced. One way or another, there will be fewer and fewer of these jobs. However, firms will be able to focus on more specialized aspects of their area of expertise. Would this explain the considered skilled labour shortage?
Technology will also allow to:
- Prevent problems instead of solving them: thanks to access to real-time data, problems can be discovered sooner;
- Use knowledge and/or sharing platforms: these will be common practice;
- Expand the market: the increasing use of new technologies and communication methods will increasingly give companies the opportunity to connect with customers on a global scale;
- Enhance transparency: the ability to search for service providers via online platforms provides information on the quality of their work;
- Improve customer service: freed from administrative tasks and through the outsourcing of certain processes, professionals can now focus on their best strengths, adding value for their customers;
Professional firms that will appropriately use technology as a complementary tool will likely be successful. On the other hand, those with obsolete business models may offer higher prices and longer lead times than their competitors.
You Won’t Recognize Your Customers Anymore
Over time, your customers’ behaviour may change, especially due to new technologies. Indeed, they will use it to educate themselves, which will reduce the information gap between customers and businesses. Or, as mentioned before, they will find their own service provider, especially on virtual platforms. Rufus Franck mentions that the Internet has by far become the main way to find the ideal advisor.
As far as costs are concerned, customers of the future will look for prices based on the results and not on an hourly rate. They will also give greater importance to the relationship with their advisor.
The Firm of the Future
As mentioned by Rufus Franck, predicting the firm of the future is a very hard task. That said, there are some key factors to consider, such as:
- Continuous improvement of business models: often requiring changes in culture and perspective; we also favour flexible organizational structures;
- the recruitment strategy to adopt: companies will draw a lot of external "non-traditional" labour, contractually committed;
- The choice of management: firms must make strategic choices based on the services offered and the markets they serve. Is it better to stick to the status quo, make some adjustments, or a radical change?
Thus, it is crucial that professionals take all these changes into account in order to adapt to survive. Disruptions caused by, among other things, the emergence of technology, have changed customers’ behaviour, expectations and needs. The firm of the future will especially have to review its structure, culture, ways of recruiting staff and its billing mode. Engineers, lawyers and accountants of this world do not have to deeply worry at the moment: technology won’t steal their jobs. However, it will undoubtedly contribute to changing it.
To end on a futuristic note, here are some interesting new business model examples:
- Elevate, Conduit law, Lawyers on Demand (law platforms);
- HardvardX; Khan Academy (free online courses);
- WebMD (medical advice site);
- UpWork, Freelancer, People per Hour (freelancers);
- TurboTax (accounting platform).
When you feel ready to move forward, contact our team to plan your professional services business' digital turn.