I recently had a fantastic conversation on the Industry Insights by SAP podcast, talking with Matt Emmert, Solution Director of Professional Services at SAP, and host Tom Raftery about the future of professional services. You can listen to the entire 22 minute session here.
A central theme to our discussion was the role of data in professional services and the broader implications.
Analytics and measuring value creation
Many professional firms, not just those focusing on analytics, are helping their clients to capture and leverage data in their operations, sometimes in very specific domains such as legal or engineering.
Analytics can help measure the value created by the professional services engagement. This can enable innovative pricing structures related to the outcomes achieved, even in complex situations. The extended shift to alternative fee models can now accelerate with the richer data available, with the potential for greater upside for both service firms and their clients.
For these kinds of relationships to work they must be true partnerships, ‘knowledge-based relationships’ built on the trust that enables data sharing and deep collaboration to correlate it with value creation.
One great example of a professional-client partnership is KLM and Boston Consulting Group’s joint venture that has developed data analytics systems for airline operations, first to optimize KLM’s operations, and then to sell those capabilities to other airlines.
Platforms for service delivery
Rather than pulling together ad-hoc teams for projects, professional services can increasingly be delivered over platforms. Services such as KPMG Spark can scale delivery and extend the addressable market. Platforms can tap external as well as internal talent, for example Deloitte Pixel. Distributed organizations such as Axiom Law are in essence platforms to aggregate talented professionals.
Many major firms in IT services, strategy, and other domains including legal services, are now offering AI platforms to help their clients efficiently leverage the power of their data. These are usually not offered on their own, but as an essential complement to traditional service delivery in large-scale engagements.
Value in ecosystems
As business shifts to ecosystems the clients of professional firms are more often consortia or other collaborative organizations. They create value for the collective through sharing data and applying lessons learned. Sophisticated professional firms can help them to optimize, not just at the firm level, but at the consortium level.
When we consider the economy as a whole, the most powerful application of professional expertise is at industry level, optimizing value through collaboration. Bringing together what are in some ways competitors requires leadership, which can often best be provided by trusted external parties that can leverage their broad relationships and industry expertise.
Expert humans plus technology
What distinguishes professional services is the value created by people with deep domain expertise, creativity, and valuable relationships.
The positioning of many professional firms is increasingly adjacent to some software-as-a-service providers. Yet the unique value of professional firms stems from how well they tap the capabilities of their staff as well as a wider network of talent. That requires effective implementation of technology, to build networks, complement human expertise, and offer clients integrated offerings that can amplify their success as never before.
These shifts offer professional services firms the opportunity to generate heightened value for their clients, entire industries, and the economy as a whole.