In my 25+ years in the tech industry, with a specific focus on Professional Services Organizations (PSOs), I have never seen so much disruption as I have in the past three years. Covid lockdowns, the move to remote work, the Great Resignation – the professional services industry has faced a variety of successive pressures in recent years, all of which affected project revenues and operations.
Against this backdrop of constant change, client concerns around their choice of professional services provider are growing. According to research from the Hinge Research Institute - Inside the Buyer’s Brain, buyers concerned about PSOs overpromising and underdelivering increased by 41% from 2020 to 2022. Meanwhile, buyers concerned about poor customer experience and responsiveness when selecting a PSO increased by 86%.
A modern approach
Modernizing systems has been a common topic for a number of years and it’s something I often discuss with our Workday customers. In professional services, it's becoming very apparent that you need a modern system to track all your people and skills globally as a strong foundation for your business. After all, people represent the majority of costs for PSOs.
From a demand perspective, questions like, ’Where do we have projects? How do we plan for them? How do we estimate where new revenue is coming from?’ all can be answered by implementing a modern data approach. From my conversations with customers, I see firms moving from a local, decentralized approach to managing their people and resources to a more global, centralized one. In order to benefit from a more centralized data experience, Professional Services Organizations need to establish a foundation where they can more effectively share resources and information across the business and operate like one global organization. This is something that legacy systems do not support.
Siloed data, inaccurate information, and difficulty putting together reports are all common issues facing PSOs running on legacy systems. Those organizations lack a clear picture across HR, Finance and Delivery, and lack time for more strategic activities. It’s also impossible to plan and forecast on the fly.
Professional Services Automation (PSA) tools are also invaluable for CFOs. By tying in HR and finance for these delivery organizations, they’re able to view the data from a portfolio level and track profitability across projects. I hear all the time from professional services buyers that having this visibility across a single system is a game changer for them.
When our customers use Workday PSA, they understand their people, what they're working on, what they're driving towards, and how that's helping their career. They have a holistic view of delivery operations, what is being deployed from a services perspective, what the customer was promised, and the financial implications of any changes, making it easier to keep projects profitable.
A modern approach is going to become increasingly important to PSOs over the next few years. According to research, 42% of PSOs cited increased competition, from both existing and new players, as a top concern for the next three to five years. Our recent research, Closing the Acceleration Gap: Toward Sustainable Digital Transformation, found that 57% of professional services leaders see a growing gap between where their business is and where it needs to be to compete, while only 23% say their digital strategy allows them to keep pace or exceed the demands of the business.
To be a leader as a PSO, you need to leverage unified technology and end-to-end processes. Historically, organizations have relied on both tacit knowledge and inconsistent data, which has not necessarily been shared across practices or geographies. Those organizations are losing resources, they’re steering towards unhappy customers and less profitable projects.
Our customers benefit from using a common language generated by AI/ML for how they track individuals, the work they're doing, and the skills available across locations. They can catalogue skills and people globally, and start to find common denominators. An office in the UK may label a skill or asset one way, while in the US office, that exact same skill is called something slightly different.
For global PSOs with global customers, our systems offer countless ways to optimize operations. Take a multinational firm working mainly out of the US and the UK – does it make sense to fly one team across the world or can they start to leverage resources more globally?
Getting the right data to make that decision is something that legacy systems prohibit. They don’t offer the ability or flexibility to report that you have the same skillset locally, within the same time zone. This is more critical now than it was even a few years ago. Workday surfaces those data points so you can see who’s your strongest match and where and when they’re available.
Putting the right people on the right projects, getting that global overview, gaining those efficiencies – from a CFO's perspective, this is what’s going to make projects profitable and improve your bottom line.
Modern systems offer the insight needed to make better, more profitable decisions, with financial, people and projects data in real-time, and give PSOs the agility and scalability to adapt quickly to adopt new business and delivery models.
A great example of this in action is global real estate firm Cushman & Wakefield, which moved to Workday as part of its digital transformation. The business manages properties and transactions for owners and occupiers in 60 countries, and employs more than 50,000 staff around the world, many working remotely.
The real estate company was looking for a cloud-first system that was adaptive and agile, that provided mobile access, and that could quickly scale to meet the ever-changing needs of its clients and employees, as Neil Johnston, global CFO at Cushman & Wakefield explains.
It needed to be global, so anyone in the world could access the system and see the same data. But it also needed to have incredible detail and granularity because our stakeholders want to know what’s happening in their market to their people.
The new technology systems also needed to be able to handle the vast amount of data being processed, whether about buildings, or how often workers are coming into the office and using the space. Johnston adds:
Those insights inform how our clients – real estate owners and occupiers – will invest in office space in the future. So, we have to be able to gather that data and present it in an actionable form.
At Cushman & Wakefield, about 75% of costs are related to its people, so it was crucial the firm could integrate people and financial data to optimize the workforce, something offered by Workday’s integrated platform. The technology had to be user-friendly, seamless, and provide actionable data to improve outcomes for its clients and employees. Johnston says:
For a CFO, credibility is critical. For me the most important thing is when I’m looking at reports in Workday, the numbers I am looking at are the same as those that someone remotely or in a different city is looking at. When everybody is looking at the same information, you get the same result. Having that single source of truth is absolutely critical, not only for me in my role but for the organization as a whole.
Companies don’t change their core business systems frequently, so any new finance or HR tools being considered need to be adaptable and future-proof.
The last 20 years of legacy ERP was all about customization. Now, finance leaders are thinking about composability, machine learning, and interoperability. These are the big drivers for the next 20 years. You need to ensure the system you choose is not going to hold you back over the next 20 years, and that no matter how your business starts to change – and change is inevitable, after all – you have that flexible technology as the baseline to guarantee you can deliver projects and outperform your competitors now, and in the future.