It has become crucial for professional services companies to radically reconsider their business models to deliver better client and employee experiences. Companies face growing pressures to become more responsive and do more for less. The evolution of machine learning (ML), artificial intelligence (AI), and predictive analytics also impact how core business processes are executed.
Professional service companies must be able to react rapidly to these challenges while continuing to drive profitable growth.
What are the key business drivers in Professional Services?
First, let’s identify the main strategic priorities and business drivers impacting Professional Services companies in the digital economy.
First: Outcome-Based Engagements
The outdated “time and materials” business model is no longer profitable for professional services companies as it used to be in the past. Outcome-based models are currently replacing it. Clients focus more now on the business outcome of an engagement rather than the effort involved, and they are negotiating prices accordingly. For instance, one pivotal lever for companies is to adopt an insightful bidding process that results in accurate proposals that will ensure predictability and repeatability of outcomes and minimize delivery risks.
Second: Hiring the Right Talent
Professional services companies rely on the talent and knowledge of their resources to drive revenue, and their talent will remain a key differentiator. Empowering employees through an easy-to-use, highly automated back office and an agile front office enables employees to collaborate and innovate. Capturing employee feedback also improves employee experience and creates the proper culture to motivate the team.
Third: Knowledge as a Service
Professional services companies realize that one of their greatest assets is valuable expertise and content that can help their clients beyond the typical face-to-face engagement model. The content is no longer exclusive to clients only through formal engagements. This became a key point of differentiation. Meanwhile, innovative professional service companies continue to productize their service lines, create knowledge hubs and monetize their institutional expertise – a model that has proven in the COVID-19 pandemic to deliver a highly resilient revenue stream.
Source from SAP
How to achieve business transformation?
Intelligent ERP can play a pivotal role in enabling companies to unlock the value of nonlinear growth. RISE with SAP supports a reimagined set of end-to-end (E2E) business scenarios to support the strategic priorities of working in a digital environment.
Outcome-Based Bidding Process
If we go back to the bidding process, the traditional scenario would take up to 30 days, consuming manual scoping, the efforts of an entire team, and relying on personal engagement. In addition to extensive content management and linear review through multiple bid versions being developed, reviewed, and tweaked over numerous rounds.
While with the capabilities of S/4HANA cloud and RISE With SAP the process could take less than a week. The solution interprets unstructured customer requirements and translates them into packages of work that you can estimate intelligently based on proven past experiences. It will immediately identify similar past bids and projects and recommends the closest fit so that you can provide your customer with a timely proposal. Moreover, it intelligently captures time, effort, and expenses to help provide flawless execution.
Businesses that have leveraged such features have seen a 10% increase in win rates and a 1% increase in resource utilization.
Talent Networks
Digitalization of talent has made new business models possible by identifying, classifying, and attracting talent on an as-needed basis and effectively integrating talent into one team based on powerful virtual learning and collaboration platforms. Moreover, it simplifies sourcing and supervising flexible workers or freelance talents in the external workforce management.
SAP SuccessFactors HXM suite will help you deliver on your strategy and bridges between opportunities and delivery capabilities. It automatically collects employees’ and contingent workers’ ‘digital exhaust”. It builds a skills profile as they perform their daily jobs, pulling keywords and relationships from enterprise systems such as collaboration hubs, project management, and learning and career planning systems, therefore facilitating the hiring of the right talent.
Delivering Knowledge as a Service: Reimagine the quote-to-cash process in digital services
Professional Services companies must start to scale up to include new capabilities required by the new business models: packaging, selling, and consuming digital expertise offerings and charging on a usage, subscription, or outcome basis.
RISE with SAP can enable you to seamlessly and instantaneously define your dynamic end-to-end processes from the quote of a simple productized service or complex business solutions across the entire value chain: pricing, delivery, revenue recognition, billing, and invoicing.
Deloitte Case Study
“We have a vision to be the undisputed leader in professional services by 2020. Our own business model has evolved. We are doing things like building software and putting it out in the cloud, as well as changing our services model. That is one of the reasons we adopted SAP S/4HANA Cloud. We need to provide visibility of engagements, financial performance, and how we can improve profitability.” Paul Bray, Partner, Deloitte
Deloitte now has integrated and streamlined client to-cash processes with increased visibility and transparency allowing for:
- Real-time performance and profitability metrics
- Real-time revenue recognition eliminating lengthy batch processes
- Valuable insights into resourcing and deliverables
- Agility to imagine and develop new services or products
- Over 250,000 users benefiting from real-time visibility
Altivate can help you transform your professional services business. We enable our clients to become intelligent, sustainable enterprises by bringing together our comprehensive market experience and SAP portfolio of solutions and technology.