The B2B market faces a different set of challenges compared to B2C. In particular, professional services firms face issues relating to maximising billable hours, managing complex projects and planning for unpredictable demand.
Here are some key challenges that face professional services firms and tips on how you can overcome them.
- Managing complex projects
- Keeping up with customer expectations
- Maximising resource utilisation and billable hours
- Balancing project work with onboarding
- Achieving the visibility required to plan for ongoing demand
1. Managing complex projects
The professional services industry is growing and it’s growing fast. Globally, it’s estimated to be worth more than £5.8 billion ($8bn) by the end of 2022, up from £4.1bn ($5.7bn) in 2018. That’s a compound annual growth rate (CAGR) of 9.1%, up from the steady CAGR of 7.4% that it had been growing at since 2014.
With this growth comes increased project complexity. For example, projects may be overseas and involve a mix of subcontractors and other partners. The challenge doesn’t lie with delivering a project. Instead, it’s about delivering projects faster, more efficiently and within tighter budgets. And all the while, customer needs should be met and expectations exceeded.
However, the more complex a project is, the trickier it can be to plan for it in advance. So, you may not be able to accurately predict how much resource is required. This can put your business’ bottom line at risk - especially if unplanned changes and demands for increased resource come later in the project.
The solution: Gain a deeper understanding of upcoming projects, from expected costs and resource requirements to schedules, risks and revenue. A solution that combines key aspects of your business can help you gain complete visibility over projects (current and future).
2. Keeping up with customer expectations
Customer expectations are rising and this is partly due to advances in technology. For instance, the evolution of mobile tech has allowed stakeholders to become used to instantly accessing information on-the-go. They want that convenience to extend to their projects - so, instant access to project info without needing to reach out to your firm for an update.
In addition to more autonomy, customers are also expecting more transparency, accountability, higher quality of work and faster delivery. In other words, they want a better customer experience.
The solution: Review the experience your customers will enjoy and assess areas for improvement. Some features of a great customer experience include providing real-time project metrics, dashboards and adaptable billing models.
3. Maximising resource utilisation and billable hours
They say time is money and this couldn’t be truer for professional services firms. The number of billable hours for each employee directly correlates to your business’s profitability. Due to the fast-paced nature of the industry, it’s easy for your employees’ days to be filled with conference calls and meetings with customers. It’s even easier to forget to log those activities as billable.
However, forgetting to log billable hours is only part of the issue. A bigger challenge is ensuring your team have enough billable hours to start with. The admin work behind logging hours and managing email inboxes are just two examples of non-billable activities that might be clogging up your team’s daily schedules.
The solution: Maximise billable hours by improving your time and expense tracking and resource management processes. Is it easy to submit time and expenses on-the-go? Are you able to assign the right projects to the right people (AKA the people with the right skills and capacity)?
4. Balancing project work with onboarding
Hiring is often a catch-22. You’ll need to recruit more employees to help with the increasing workload. But hiring creates more work for you in the short-term - for example, recruitment lead time, the time and resources required to onboard etc. This is all time that isn’t billable and directly generating revenue for your firm.
The solution: Shorten your time frame for hiring and training, wherever possible. Is it possible to be clearer about the scope of work and the ideal candidate in the job listing? Can your interviews be more thorough? With training, look for tools that can automate any aspect of the onboarding process and boost visibility for managers.
5. Achieving the visibility required to plan for ongoing demand
Professional services firms are balancing their time between working on current projects and planning for future ones. But as we mentioned earlier, projects are becoming more complex. For example, customer budgets may scale up and down - and in response, a project’s scope will follow suit.
If you haven’t planned for these periods of increased demand or downtime, areas of your business may suffer. For example, one department may be over capacity while another doesn’t have enough work. This can impact project timelines as well as your team’s productivity and morale.
The solution: Access to real-time business intelligence can help you gain the visibility you need to make informed decisions. For example, a solution that can bring together key areas of your project-centric business can help you make more accurate predictions on workload and AI-driven recommendations can suggest how best to adapt.
How can your professional services firm improve its agility?
The global professional services market has been growing at an increasing rate. With that comes more challenges for businesses to navigate.
To ensure your professional services firm is keeping up with the growing challenges, you must improve your business agility. Our checklist covers the steps you must follow. Download it below.