5 keys to success for consulting firms in the fourth industrial revolution
While the professional services consulting industry continues to enjoy steady growth year over year, many market analysts agree that it is headed towards a decelerating trajectory in the fourth industrial revolution, due to two major problem areas: Slow firm adaptation to technology and outdated business practices.
Challenging market conditions pose problems for the consulting industry:
- Changing client behavior: Clients have become increasingly more demanding as they call for fixed fees that provide a deeper level of transparency on work and costs. This is causing clients to “shop around” for consulting services and to spread the engagement scope and tasks between several different firms.
- Waning profitability: Clients are also demanding better engagement value through lower pricing, which is squeezing the profit margins of many consulting firms. This is forcing firm leaders to recalibrate business models, despite a growth in overhead costs due to a talent crunch. Firms are looking for more efficient ways to manage operations and engagement costs.
- New competition: New players are entering the consulting industry, particularly boutique firms that can expertly handle certain types of engagement tasks. These new entrants are employing the latest digital technologies to deploy services much more cost-efficiently.
- Data breaches: Clients are worried about their sensitive data being held at consultant firms. This strategic information — such as data from mergers and acquisitions, sales and marketing, and personnel data — is a target for hackers and data breaches. Clients demand firms use the highest level of security in their systems.
5 keys to success for consulting firms to leverage
So what can a consulting firm do today to continue the trajectory of growth and prosperity in spite of these challenging market forces? The short answer is that the fourth industrial revolution allows us to leverage smart-technology investment to propel our firms to compete smarter and faster.
Win more business by leveraging data intelligence, automation, and AI.
- Understand how your business is performing through data analytics, i.e. total cost of delivery, payment for all billable work, and adherence to contractual obligations
- Leverage AI and intelligent automation to enable less people to do more work, especially the more mundane activities
Improve efficiencies by driving down the cost of services delivery with smarter work allocation and process automation.
- Eliminate/reduce phone calls, meetings, and emails, by driving operational efficiencies via an automated integrated system
- Fewer people required to do more work
- Support talent retention by ensuring your fee earners are providing value-add and strategic work versus manual/busy work
Maximize realization by reducing write-downs and write-offs while ensuring compliance to client requirements.
- Utilize automated terms management to ensure you are adhering to all agreement requirements
- Add automated time entry/capture/billing integration to ensure you are getting paid for all billable hours
- Create clear narratives outlining who is doing what work, for how long, and at what cost, so you can better understand the total cost of delivery and ensure profitability on future efforts
Manage risk and compliance by protecting your firm’s sensitive data and brand.
- Be sure you are doing business with the right clients from a regulatory and strategic perspective
- Use risk score-carding to ensure you don’t on-board clients that are not aligned with your corporate objectives and priorities
- Let automation advise you when there are client issues from a regulatory or strategic perspective
Drive client success by deepening your relationship with client and partners.
- Understand who your firm knows and what their relationships are with prospective clients by analyzing your captured data
- Keep appraised of key contacts, their jobs, and any new roles and changes
- Capitalize on your team’s skillsets so that you leverage the right team member to successfully deploy and complete engagements
All of these initiatives are enabled through innovative new technologies that allow you to do much more with considerably less. Smart automation is the linchpin to maximizing realization, lowering operational costs, enhancing data security, and winning more business through better client relationships.
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