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Innovation In Professional Services - Triggers and Effects
Innovation In Professional Services - Triggers and Effects

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The later part of the previous century and the first two decades of the 21st century are marked by wide-ranging disruptions in all walks of life. While wars, civil strife, and pandemics have caused disruptions, there has been one constant factor that has triggered disruptions. This factor is innovations made possible by advances in sciences and technologies.

Massive innovations in a diverse range of technologies have unleashed waves of disruptions in industry after industry. Our lifestyles have changed dramatically and they continue to change. No industry is immune from them. It is difficult to be on top of changes triggered by technological developments in materials, semiconductors, sensors, healthcare, space, communications, etc. This has led to increasing levels of specialization in every profession. 

One direct consequence of the above is that the companies that innovate in the tech sector and their user industries have come to depend on specialized services in areas like engineering, procurement, construction, product development, regulatory compliances, engineering, application development, package implementation, cloud, machine learning, artificial intelligence, cyber security, etc., to name some.

The uniqueness of the professional services sector

The need for specialized services mentioned above has given rise to a new sector that includes companies in IT, Engineering, Procurement & Construction (EPC), Pharma and Life Sciences, etc. While such professional services companies have been around for quite some time, it is only now that this sector is being recognized for what it is about - configuring, estimating, planning, and executing projects to deliver the specialized services mentioned above.

The professional services sector differs from the traditional industries. The traditional businesses sell well-defined goods and services (e.g. travel from point A to B or minutes of a telephone call or a movie show). These are priced and sold as standard items. Contrast this with what happens in professional services companies. They deal in projects. They bid for project contracts and realize their sales by completing the projects.

Triggers for innovation in professional services

In absence of anything better, professional services companies have come to rely on general-purpose enterprise software. However, project deliverables like time, materials, activities, milestones, etc., as units of saleable output place unique demands. Some large services companies have homegrown solutions to manage these demands. Most other companies rely on standalone software packages like opportunity management, project management, accounting, etc. They use a patchwork of such applications, spreadsheets, and collaboration tools like emails and chats for managing the challenges of project business. The results are dissatisfactory -e.g. Difficulties in bidding, misallocation of resources, missed revenues, lower than estimated profits, missed compliances, etc. 

Factors such as the above triggered the creation of a new type of enterprise software - Professional Service Automation.

The need for better opportunity management, project estimation, resource management and talent acquisition, project planning, and tracking, keeping project profitability as per estimations, optimal utilization of resources, and visibility of per project and per person profit provided additional triggers for innovation in the Professional Service Automation software packages.

The increasingly widespread availability of machine learning and artificial intelligence tools are the next triggers for innovation.

Effects of innovation in the professional services sector

Professional services companies are now encountering a different business landscape. The competition for outsourced services contracts is intense. The increasingly complex and conflict-ridden geo-politics is causing a high level of unpredictability. With both customers and employees becoming more demanding, professional services companies need to innovate in the way they manage their business.

Companies that use Professional Services Automation (PSA) software that seamlessly manages end-to-end business processes will have a competitive advantage. Companies that use ‘consoles’ of PSA for collaboration between sales and estimation, project managers and resource managers, and among project managers, delivery heads, and finance will not waste precious managerial bandwidth. They will be nimble-footed in dealing with customer demands. 

The ‘single version of the truth’ that a good PSA provides will give the top leaders of professional services companies confidence to navigate the shifting business landscape. 

Project culture

Project companies must have a project culture! While the project teams talk about and deal with project planning, tasks, milestones, and deliverables, other departments in most companies continue with their traditional paradigms. Such dissonance is very hurtful. A good PSA provides a full function software platform and a shared vocabulary. It provides consoles for data-driven actions. A good PSA is essential for building project culture in professional services companies.

Summary

Professional services companies like IT, Engineering, Pharmaceutical, EPC, etc. that deploy a versatile Professional Service Automation (PSA) software thrive in a highly dynamic and competitive business landscape.

About the Author: Sandeep Kumar , He is the founder & CEO of ProductDossier, an enterprise software product company. Prior to founding ProductDossier, he worked with Geometric Software (now acquired by HCL) and Tata Research Center. He is an alumini of Indian Institute of Science, Bengaluru.


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