The seven PSO trends

**More consultancies have been developing new customer-focused business models which deliver subscription billing and personalized, multichannel offerings.**

1. New business models

More consultancies have been developing new customer-focused business models which deliver subscription billing and personalized, multichannel offerings – not just to create new revenue streams, but to satisfy the increasingly complex needs of their client base. We have also witnessed the remodelling of admin-heavy business processes which manage workforces, projects, and finances to reduce costs, generate growth, and improve People Experiences.

To support these new business models, firms have been accelerating digital transformation by investing in ERP for professional services. These systems streamline and connect processes to improve flexibility, collaboration, and visibility, while helping firms enhance efficiencies, win more bids, and transform work for people.

2. Talent: attracting it and keeping it

Service organizations have always been under pressure to attract, engage, optimize, and retain good people. Analyst firm SPI see talent as the central issue for PSOs as the talent crisis grows¹.

The market leaders already know the importance of transforming work for their people, by freeing them from manual tasks, allowing them to align more regularly with the company, and upgrading learning and performance management. Voluntary attrition is rising as employees have new and more priorities, input and control over their work, whereas involuntary attrition is declining as employers seek to retain the talent they have. Going forward, leaders will have to adapt their leadership styles, provide more training, understand how employees want to be treated and compensated, and establish the organization as a great place to work.

More and more organizations are doing this by integrating a talent enablement platform and a human capital management (HCM) application with PSA software and a modern ERP for professional services. These tools help firms compete for talent, improve employee engagement, optimize high-performing teams, and transform work for their people – creating a more collaborative workforce in which HR, Finance, and IT work together more closely and transparently.

To learn more, read our eBook:

Future-proofing
your talent strategy

3. Increased competition

For many years, the professional services market has been a dynamic business landscape characterized by the Everything-as-a-Service economy which had accelerated disruption and the appearance of new rivals with new business models. In the wake of 2020, with tightened budgets and fewer sales opportunities, competition has become higher than ever – and it’s only going to increase as firms emerge from a period of retrenchment and recovery and start looking to expand their offerings and portfolios in the coming years.

To win more business and deliver more profitable projects, many firms are deploying professional services automation (PSA) software alongside standardized methodologies and repeatable operating processes to gain greater transparency throughout every stage of the project.

Only the strong will survive, and the competitive landscape will change as PS executives look to mergers and acquisitions over the next few years. Leading firms will take this moment in time to increase headcount through aggressive hiring practices, or mergers and acquisitions. Lower performing firms will suffer and could ultimately go out of business.⁴

4. More market consolidation

In the high-growth professional services world, mergers and acquisitions are increasingly seen as one of the fastest ways to augment growth and to expand into hot new service and technology segments¹. Consultancy.eu says this trend for more acquisitions, partnerships, and alliances in the industry stems from the need for ‘specialist expertise and more rapid avenues for innovation”⁵.

5. Heightened client expectations

As your organization evolves, so do your clients. Your customers increasingly expect better, faster service, with more personalization, visibility, and engagement. This means there is a relentless need to develop a more sustained, informative, and transparent connection with the client to improve customer satisfaction and provide the best service possible.

The foundation for this approach is enabling people through technology: by implementing modern Enterprise Resource Planning (ERP), process automation (PSA) platforms and building high-performing teams. With integrated platforms that make your data transparent, your employees and clients can expect a more seamless experience. The benefits of improved customer satisfaction include increased revenue from additional deals with existing clients, increased referenceability, and a higher NPS.

Check out our eBook:

Client Relationships and
Service Excellence

6. The push to automate manual processes – RPA, AI and ML

PSOs are striving to improve productivity with an ERP for professional services which automates low-value tasks to streamline processes so people can spend more time on high-value work. A Constellation Research report says that PSOs “look to automation and AI to provide exponential gains in reducing full-time equivalents (FTEs), improving scale, and reducing errors.”⁷ 43% of firms believe that artificial intelligence could transform a vital part of their business, while 48% say it has the potential to transform their entire organization.⁸

Automation also represents a powerful tool in tackling the talent crisis. Removing administrative burdens from your people makes them more productive and empowers them to do the work they actually joined your organization to do. A productive workforce is a happier workforce, and will show improved engagement, wellbeing, and retention.

To learn more, read our infobrief:

IDC infobrief on
Smart Automation

7. A finance-first culture

Tracking costs, accurately forecasting spend and improving cost and operational efficiencies while aligning financial and operational reporting are key to business success.

Digital transformation is enabling a finance-first culture, in which operational and sales teams, for example, can understand the impact of their activity on the business’ bottom line.

Making such a vast cultural transformation is not easy, but leaders in this area are achieving it through the use of a flexible ERP for professional services.

A modern, flexible ERP integrates multiple solutions, consolidates data from all sources, and centralizes processes within a single environment to provide complete visibility across the whole company, allowing previously siloed teams to collaborate.

Read our ebook:

Finance First:
Unlocking innovation

_{Links and references}

_{¹ SPI PSO Maturity Benchmark Report 2022

² IMF World Economic Outlook Update: July 2022

³ Future-proofing your Talent Strategy eBook

⁴ SPI Delivering Superior Professional Services Performance in Uncertain Times 2020}

_⁵ _{Consultancy.eu – 4 Major Trends Impacting Professional Services Firms}
_⁶ _{Selling Services – the view from 2022 eBook}
_⁷ _{Constellation Research 2022: Unit4 Transforms from ERP to People Experience Suite}
_⁸ _{PAC Research 2022: Professional Services in Europe - A Benchmark for 2022}
_⁹ _{IDC 2021: Transforming the Service Industry with Smart Automation}
_¹⁰ _{Finance First: Unlocking Innovation}