Best in class in the professional services industry how ... · legal services, market research,...

I n par t ner s hip w i th

TREND S TUDY

Best in class in the

professional services industry – how companies

achieve transparency,

efficiency, and growth

E ike Bieber, P rincipal Consu ltant – Finance Indust ry

August 2016

B es t -i n- class i n t h e gl obal prof es s ion al s ervices i n du st ry – h ow com pan i es ach i ev e t ran sparen cy, ef f i c ien cy , an d grow t h -

C opyri gh t C X P Grou p, 2016 2

TABLE OF CONTENTS

Introduction....................................................................................................3

2- The top priorities and challenges in professional

services ..........................................................................................................4

What are the top business priorit ies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

What are the top business chal lenges? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3- Assessing the project value chain..............................................................8

Why is an integrated v iew requi red?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

How is the pro ject value chain supported in professional serv ices com panies? . . . . . . . 9

Softw are-related aspects of im portance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4- Focus on specific areas of the project and

services business.......................................................................................... 12

Project managem ent: Agili ty and speed of reaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Profitabi lity: Transparency and granularity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Finance & accounting: Usefulness of various aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Analyt ics: Abi lity of real -t im e m anagem ent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Collaboration: Abi li ty of real -t im e m anagem ent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Managem ent : Complexity due to dem anding business conditions . . . . . . . . . . . . . . . . . . . . . . 18

Market ing: The path to segm ent of one . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Conclusion ................................................................................................... 21

About SAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

About PAC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Disclaim er, usage rights, independence, and data protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25



INTRODUCTION

I n the light of digita liza t ion and changing market cond it ions, v irtua lly

ev ery enterp rise is facing intensify ing compet it ion and considerab le

business changes. P rofessiona l serv ices companies a re part of th is

dev elopment . They see their businesses being massiv ely a ffected by

changing customer p references and the need to respond to these

changes rap id ly. In a peop le-centric and rather unstab le business

env ironment, agility has become the key to success and further

grow th. At the same t ime, serv ices firms a re facing p ressure on p rices

as customers hav e become tough negot iators in t imes of increasing

p ricing t ransparency and globa l serv ice av ailab ility. P rofitab le

business takes center stage, and to achiev e th is, p rofessiona l serv ices

companies require a robust business model that p rov ides the right

v alue p roposit ion, offering, and capab ilit ies to the right customer at

the right t ime and p lace.

I n answer to these cha llenges, p rofessiona l serv ices companies hav e

their eye on technology and how it can support their business.

Making use of the technologica l possib il it ies means seiz ing the

opportun ity to increase efficiency, t ransparency, and growth. The

t rend study a t hand examines the relat ion between the dep loyment

of appropriate technology and greater success in the p rofessiona l

serv ices business.

To assess th is top ic, PAC recent ly conducted a surv ey of 300

p rofessiona l serv ices companies. PAC conducted roughly ha lf the

interv iews w ith I T managers (45%), and the other half w ith C- lev el

managers and decision makers from other business a reas (55%).

Fig. 1: Basic surv ey data

The surv ey sought insights from d ifferent sub - indust ries includ ing

management, business, IT and tax consu lt ing, aud it ing, account and

lega l serv ices, market research, marketing and adv ert ising, research

and dev elopment, a rch itecture, engineering, and const ruct ion , as

well a s rent ing, ma intenance and repair. The companies included in

the surv ey w ere recru ited a round the glob e and belong to the

segment of small and mid-sized firms (each w ith a minimum of 100

and a maximum of 1,000 employees).

Survey conducted in June 2016

JUNE

people surveyed from around the globe

300

From

professional

services JU AY

100 to 1,000 employees



2- THE TOP PRIORITIES AND

CHALLENGES IN

PROFESSIONAL SERVICES

WHAT ARE THE TOP BUSINESS PRIORITIES?

Surv ey respondents were asked to take into considerat ion selected

business top ics and to ev aluate the p riority that they a ttach to each

of them. The resu lt s rev eal that p rofessiona l serv ices companies hav e

a v ariety of top ics on top of their agenda, w hile none of the top ics

clearly stood above the others.

When we only consider the aspects to which companies attach the

h ighest p riority, the need to grow business with ex ist ing and new

clients stood out (with 66% of respondents confirming th is a s the

h ighest p riority). In the course of th is quest ion, it became ev ident that

th is is, in many cases, d riv en by the a im of expand ing into new

serv ice a reas a nd further geographies. How ev er, an equa lly st rong

focus lies on enhancing the ir ex ist ing work. The clear ma jority of

respondents a re eager to improv e current serv ice deliv ery, support,

and sa les. Virtua lly ev ery p rofessiona l serv ices company is a iming to

improv e it s ability to acquire, retain, and dev elop the right talent .

Fig. 2: Topics considered a priority by professional serv ices firms

Key business priorities for the years to come

high priority some priority

© P

AC

- a

CX

P G

rou

p C

om

pa

ny, 2

016

52%

66%

57%

52%

40%

35%

43%

28%

36%

39%

45%

43%

Enhance service delivery and support

Grow business with existing and new clients

Improve the ability to acquire, retain, and develop the right talent

Enhance sales

Expand business into new service areas

Expand business in new geographies



Considering the med ium to h igh relev ance of these top ics, w e get a

first idea on how important technology is for p ro fessiona l serv ices

companies. All of these aspects reflect the need for adv ancements in

a reas such as process automation, CRM, analytics , and scalability.

WHAT ARE THE TOP BUSINESS CHALLENGES?

Chal lenges related to business processes

We first consider requirements related to business p rocesses. I n t imes

of d igitalizat ion and a grow ing need to fu lfi l l v ery ind iv idual customer

demands, p rofessiona l serv ices companies a ttach h igh p riority to the

enhancement of p rocesses, a s surv ey respondents confirmed. The

ma in focus lies on the enhancement of p rocess efficiency : More than

one th ird of the companies (38%) consider th is to be a b ig cha llenge,

while more than ha lf of the respondents say that it is a moderate

cha llenge (54%). How ev er, the need to enhance p rocess qua lity and

t ransparency is a lmost of equal importance.

Fig. 3: Process-related challenges of professional serv ices firms

Strategic chal lenges

From a st rategic perspect iv e, business growth is an important

cha llenge for v irtually ev ery p rofessiona l serv ices firm, as cited by

ov er 90% of respondents. W ith 40% confirmat ion, the reduct ion of

costs is the ov errid ing cha llenge. The message is clea r: Firms a re

seeking p rofitab le growth. Customer centricity is taking center stage

in p rofessiona l serv ices today and , accord ing to the surv ey resu lt s,

about one th ird of companies a re act iv ely p riorit iz ing the

improv ement of CRM.

Required enhancements with regard to business processes

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

201

6

big challenge moderate challenge no challenge

29%

60%

11%

Enhance quality

23%

56%

20%

Enhance transparency

38%

54%

9%

Enhance efficiency



Fig. 4: Key strategic challenges of professional serv ices firms

Tactical chal lenges

With regard to business operat ion s, the most p ressing cha llenge is

related to sta ff p roduct iv ity and mot iv at ion and, a lmost equa lly

important , the need to react to ev er-changing market condit ions and

customer requirements in an appropriate manner. The lat ter st rongly

depends on the employees, of course, so the h igh percentage figure

is not surp rising.

Business decision -making, collaborat ion, and managing risk,

compliance a nd cash flow s a re a lso considered to be cha llenging by

the clear ma jority of surv ey respondents, a lthough the percentage

ind icating them as a b ig cha llenge is sl ight ly low er (each less than

one th ird ).

Key challenges – strategic aspects

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

201

6

big challenge moderate challenge

33%

40%

34%

26%

59%

52%

55%

61%

Create a stronger backbone for future growth and to control growth

Reduce costs

Improve customer relationship management and customer retention

Better react to ups and downs in business



Fig. 5: Key tactical challenges of professional serv ices firms

The surv ey resu lt s suggest that p rofessional serv ices companies a re

p lanning to inv est in adv anced ana lyt ics, collaboration technology,

and in the automat ion and d igita lizat ion of back-end p rocesses.

Technology is a v ita l element that enab les p rofitab le business with in

p rofessiona l serv ices. The comprehensiv e set of st rategic, tact ica l,

and operat iona l cha llenges, as w ell a s their interdependencies,

testify to the fact that business and IT need to work closely together

in order to succeed.

Key challenges – tactical aspects

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

20

16

big challenge moderate challenge

38%

37%

28%

32%

26%

24%

55%

54%

60%

56%

62%

56%

Increase employee productivity and motivation

Better react to changing market conditions and customer demands

Enhance business decision-making

Enhance collaboration of employees to manage projects

Increase efficiency in managing business risks and compliance

Enhance cash flow management



3- ASSESSING THE PROJECT

VALUE CHAIN

WHY IS AN INTEGRATED VIEW REQUIRED?

Back in the 1980s, M ichael E. Porter dev eloped the concept of the

v alue cha in, and sta ted that ev ery act iv ity with in the v alue cha in

can be a d ifferent ia tor and the u lt imate reason why a customer buys

a p roduct or serv ice. The v alue cha in concept can be app lied to

p rojects and can be used to rev iew the compet it iv e adv antage that

a company offers w hen deliv ering projects or serv ices.

We can therefore say that the p roject v alue cha in frames the

p rofessiona l serv ices business. Each p roject or serv ice engagement

sta rt s with the generat ion of a lead and the creat ion of an

opportun ity, and cont inues by the p reparat ion of a quote and a

p roject p lan. After order ent ry, the p roject or serv ice is executed,

based on a more deta iled p roject p lan that a llows the company to

record effort s and expenses as w ell a s document and report

milestones, etc. The p roject serv ice v alue cha in end s w ith b ill ing the

p roject or serv ice engagement, or it re- sta rt s by up -selling or cross-

sell ing to the client .

Fig. 6: Example of the project v alue chain

Accord ing to Porter, ev ery bu ild ing b lock in the p roject (or serv ice)

v alue cha in creates v alue and can be the decisiv e factor behind the

select ion of a serv ice prov ider.

Oppor-tunity

Project proposal and plan

Order Execution

Billing

Lead generation

Project value

chain



Now , in the d igita l age, th e concept is st i l l v alid but it needs to be

expanded . Apart from d ifferent ia t ing bu ild ing b locks, companies can

create a compet it iv e adv antage by th inking across the bu ild ing

b locks of the p roject v alue chain and by integrat ing them. In t imes of

t ransparency and ‘me-too’, a more holist ic approach can make the

d ifference.

I n order to assess the current state, w e asked the surv ey part icipants to

est imate the lev el of integrat ion of the p roject v alue chain that has been

reached in their company. 65% of respondents say that integrat ion is

current ly low (i.e. an integrat ion lev el below 50%), while 35% consider it to

be h igh ( i.e. an integrat ion lev el h igher than 50%). I nterest ingly, on ly one

respondent rep lied that the p roject v alue cha in was 100% integrated ,

while 10% sa id it was betw een 0% and 10%, which ind icates a v ery low

integrat ion lev el.

We can therefore conclude that there is room for improv ement w ith

regard to the integrat ion of the p roject v alue cha in and that many

p rofessiona l serv ices companies a re obv iously st i l l miss ing out on the

compet it iv e edge that a h igh integration lev el delivers.

I n the follow ing chapters, w e out line why an integrated v iew is

required and how it helps p rofessiona l serv ices companies to

succeed. M oreov er, w e exp lore selected bu ild ing b locks in the

p roject v alue cha in more deep ly to uncov er the requirements and

potent ial a reas of improv ement.

HOW IS THE PROJECT VALUE CHAIN SUPPORTED IN

PROFESSIONAL SERVICES COMPANIES?

An integrated v iew of the p roject v alue cha in helps p rofessiona l

serv ices companies to stay compet itiv e. Two examples:

I ntegrat ion enhances transparency because it , for instance,

enab les companies to figure out qu ickly which p rojects a re

running according to p lan. Cou ntermeasures can be taken

rap id ly in the ev ent of dev iat ions. When ca lcu lat ing a quote, an

integrated v iew helps the sa lesperson to figure out whether

former p rojects w ith the client were p rofitable or not , and why.

An integrated v iew of the d ifferent build ing b locks a lso fosters

efficiency. Based on a linkage betw een the d ifferent p rocess

phases, it becomes easier to p red ict the demand for resources,

which helps to av oid bott lenecks and the need to recru it externa l

sta ff for specific p roject tasks.

After ga in ing cla rity on the est imated integration lev els, w e w ere

keen to discov er how the p roject v alue cha in is organized and

supported in p rofessional serv ices companies.

39% is the av erage

integration level

as estimated by

the respondents



Fig. 7: Different possibilities for supporting the project value chain

There is l itt le surp rise in find ing that the ma jority of p rofessiona l

serv ices companies (66%) today use v arious non-integrated

app licat ions to support the p roject v alue cha in. Only 15% hav e their

systems integrated and those companies stated that they hav e

reached h igh integrat ion lev els w ith regard to their p roject v alue

cha in. 19% use one business app licat ion or system, which can be an

ERP system, but could a lso be Excel.

98% of the survey respondents confirmed

that Excel is in use to support at least

some part of the project value chain

Ex cel is in widesp read use ( i.e. the lev el of Ex cel use is h igher than

50%) in 62% of the p rofessiona l serv ices firms, but on ly a few depend

solely on Ex cel (16% sta ted a lev el of Ex cel use h igher than 90%). The

surv ey clearly confirms that Ex cel is st i l l an important tool for

organiz ing business, and this is pa rticularly t ru e for sma ller companies.

SOFTWARE-RELATED ASPECTS OF IMPORTANCE

The app licat ion landscape p lays a key role in today’s p rofessiona l

serv ices business. La rge parts of the business depend on it today. The

clear ma jority of the surv ey respondents attached h igh or some

relev ance to being ab le to enhance or expand the ex ist ing systems

as well a s to p rov ide mob ile support for business p rocesses and

funct ions. These answ ers reflect great interest in adv anced

app licat ions that p rov ide flex ib il ity and the possib il ity to respond to

specific needs, which can be a way to d ifferent iate from

competitors. The av ailab ility of cloud solutions and of usage-based

Organization of the project value chain

© PAC - a CXP Group Company, 2016

one business application or system

various integrated systems

various systems that are not integrated

66% The project value chain is covered and supported by...

15% 19%



payment models is on ly slight ly less relev ant. The h ighest p riority,

how ev er, is at tached to fast and easy imp lementat ion , which

underlines the fact that p rofessiona l serv ices companies a re h igh ly

caut ious and cost sensitiv e when it comes to I T investments.

Fig. 8: Relev ance of software-related topics

Relevance of selected software-related topics

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

20

16

high relevance some relevance

39%

26%

18%

29%

25%

14%

51%

57%

63%

51%

52%

57%

Fast and easy implementation

Extensions: the flexibility of adding business capabilities in existing system(s)

Enhancements: the availability of add-ons to enhance the existing system(s)

Mobile support of business processes and mobile access to business functions

Software as a service/SaaS

Payment per use



4- FOCUS ON SPECIFIC AREAS

OF THE PROJECT AND

SERVICES BUSINESS

PROJECT MANAGEMENT: AGILITY AND SPEED OF

REACTION

Most p rofessiona l serv ices firms recognize the importance of p roject

management . Consistent ly and p roperly app lied, it helps to control

spend ing and improv e p roject resu lt s. The p rojec t management

d iscip line can make business more efficient , sa t isfy customers,

emp loyees, and other stakeholders, and lead to a competit iv e

adv antage as a resu lt.

Consistent and p roper p roject management imp lies that a ll relev ant

p roject- and customer- rela ted informat ion is at hand on a v ery

granula r lev el whenev er it is needed. Only then is it possib le to

measure the v alue of a single specific p roject . Howev er, in the

majority of p rofessiona l serv ices companies, today’s system

landscape does not comply w ith this requirement. Only a quarter of

surv ey respondents sta ted that they could check the p rofitab ility of a

p roject w ith min ima l effort a t any t ime. Roughly a th ird of the

companies (31%) admit that th is – in theory – rather simp le

requirement is solv ed ineffect iv ely . That p robab ly includes sev era l

companies that cannot reliab ly check the p rofitab ility of a p roject at

a ll.

Fig. 9: Lev el of effectiv eness with regard to project management tasks

31% 44% check the profitability of single projects any time at the push

of a button?

How effectively do professional services companies…

Evaluation on a scale from 1 for not effectively at all to 10 for very effectively

semi-efficient scale 4-7

25%

efficient scale 8-10

not efficient scale 1-3

35% 49% respond almost immediately

when a project runs into trouble? 15%

Average rating

5.2

respond rapidly to a change in customer demands? 36% 53% 11%

4.6

4.2




I t is not surp rising that ev en fewer p rofessional serv ices companies

feel that they a re ab le to respond quickly to changes in an efficient

way. Changes can either be p roject- related (e.g. p roject no longer

on t ime or on budget) or customer- related (e.g. an ad-hoc change

request during the p roject). In these cases, action that is obv iously

more cha llenging than simply rev iew ing a status, such as checking

p rofitab ility, is required.

PROFITABILITY: TRANSPARENCY AND GRANULARITY

P red ict ing costs and effort s for a serv ice or p roject is demand ing for

p rofessiona l serv ices companies because the est imat ion of w orkloads

and tasks is more complex when peop le a re inv olv ed and the lev el of

manua l w ork is h igh. Consequent ly, hav ing cla rity on p rofitab ility is a

ma jor concern for p rofessional serv ices companies, which is why we

hav e analyzed this topic in more detail.

We asked surv ey respondents to rate the importance of hav ing a h igh

lev el of t ransparency with regard to p rofitab ility in v arious

d imensions. Surv ey resu lt s underline that p rofessiona l serv ices

companies require h igh cla rity and p recision w ith regard to

p rofitability in genera l. All d imensions were rated as ‘highly ’ or

‘somewhat ’ important by a clear ma jority of surv ey respondents.

Hav ing a clear v iew on p rofitab ility by p rojects rec eiv ed the h ighest

sha re of confirmat ion as being h igh ly important . Know ing the

p rofitability by region is relev ant for few er respondents as it st rongly

depends on whether p rofessiona l serv ices companies a re doing

business locally or internationa lly.

Fig. 10: Relev ance of transparency with regard to profitability information

Relevance of transparency with regard to profitability

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

20

16

high relevance some relevance

42%

50%

41%

42%

31%

30%

48%

40%

48%

46%

53%

45%

Profitability by customers

Profitability by projects

Profitability by business units

Profitability by particular offerings or services

Profitability by employee

Profitability by regions



Hav ing h igh t ransparency on p rofitab ility and being ab le to measure

th is on a h igh lev el of granula rity requires a h igh lev el of integrat ion

w ith regard to data and systems. P rofessiona l se rv ices companies

hav e room for improv ement here. At the moment, on ly a sma ll

percentage of surv ey respondents (16%) state t hat they can ret riev e

information on p rofitab ility in rea l t ime and w ith a h igh lev el of

automat ion. For most companies, more effort is required as they a re

either receiv ing the informat ion dynamica lly (31%) or manua lly (49%).

I t becomes clear that there is st il l a w ide gap between the opt ima l

sta te (i.e. hav ing h igh t ransparency on p rofitab ility in v arious

d imensions) and the rea l situat ion (i.e. how p rofitab ility in format ion is

actua lly ret rieved).

Fig. 11: Current status of the retriev al of profitability information

Current retrieval of profitability information


in real time and highly automated

manually dynamically

Today, information on profitability is received…

49%

Please note that 4% of respondents stated that they did not know

31% 16%



FINANCE & ACCOUNTING: USEFULNESS OF VARIOUS

ASPECTS

Surv ey respondents w ere asked to ev aluate the usefu lness of v arious

aspects that a re relev ant for the finance and account ing

department, and for the genera l management of a p rofessiona l

serv ices firm. The resu lt s show that each p re-selected aspect was

ra ted ‘v ery usefu l’ by the ma jority of respondents, while none of the

top ics clearly stood abov e the others.

The av ailab ility of deta iled informat ion and t ransparency on the

ut il izat ion of employees was giv en the h ighest percentage of rat ings

as being v ery usefu l (63%). Howev er, other aspects such as receiv ing

cost- related informat ion instant ly or being able to close the books

qu ickly w ere rated as v ery useful by almost as many respondents.

Fig. 12: Rating of usefulness of selected aspects for finance and accounting

2016

Usefulness of various aspects for finance and accounting

63%

61%

56%

53%

51%

52%

A high transparency level with regard to bench times of employees

Detailed information and transparency about the utilization of employees

A short timeframe for closing a quarter or a year’s end

Retrieving project-related cost allocation at the push of a button

Instant control of project- or customer-related KPIs

Easy and integrated recruitment and sourcing of external staff

Retrieving the number of unbilled days at the push of a button

A high transparency level with regard to the company’s liquidity situation

An integrated view of intercompany relations

57%

56%

56%

Would be very useful




ANALYTICS: ABILITY OF REAL-TIME MANAGEM ENT

Aspects such as the ones described abov e require adv anced

ana lyt ics. I f companies a re a iming to ret riev e up- to-date informat ion

to support decision-making ‘at the push of a button’ , it shou ld idea lly

be av ailab le in rea l t ime. We asked the surv ey respondents whether

their ana lyt ics systems a llow for rea l- t ime management of the p roject

v alue cha in and if yes, whether that cov ers the whole p roject v alue

cha in or on ly parts of it .

The resu lt ind icates that rea l- t ime ana lyt ics has rea ched a certa in

lev el of maturity in p rofessiona l serv ices firms. The clear ma jority of

these companies hav e the ab ility to ana lyze and manage at least

some components of the p roject v alue chain in rea l t ime.

84% of survey respondents confirmed

that real-time analytics is available for a

few, many, or all components of the

project value chain

Howev er, the ab ility to manage the ent ire p roject v alue cha in based

on rea l- t ime data is st i l l fa r from being standard (7%). A h igh

percentage of respondent s cannot do this in rea l t ime at a ll (13%),

w ith an add it iona l 3% who d id not know the answer to th is quest ion . It

therefore seems as if there ex ist s a solid basis for rea l- t ime

management that p rofessional serv ices firms can expand further.

Fig. 13: Current av ailability of analytics that allows real-time management

Current status of real-time analytics

© P

AC

- a

CX

P G

rou

p C

om

pa

ny,

20

16

How many components of the project value chain can be analyzed in real-time today?

all components 7%

most components

22%

a few components

55%

no components 13%

I don't know 3%



COLLABORATION: ABILITY OF REAL-TIME

MANAGEMENT

Know ledge work – which is a t the core of p rofessiona l serv ices

deliv ery – requires collaborat iv e w orking env ironments. Th is is of

part icula r importance in times of d igita l t ransformat ion , w ith rout ine

act iv it ies becoming increasingly automated and the t ime spent by

employees on complex tasks and in d ist ributed teams increasing.

Consequent ly, technica l collaborat ion p lat forms or tools a re needed

as a foundat ion that fosters teamwork and knowledge ex change.

Aga in, the surv ey underlines that p rofessiona l serv ices companies

a round the w orld hav e reached a certa in maturity lev el w ith regard

to collaborat ion technology. The clear ma jority of surv ey respondents

(82%) confirm that collaborat ion p la t forms or tools a re av ailab le and

in use. These tools and p la t forms a re fu lly integrated into the ex ist ing

system landscape in on ly a round a quarter of the companies (26%).

So aga in, we see enhancement potent ia l a s a solid and integrated

technica l framework that could fu rther increase the p roduct iv ity of

emp loyees – and most p robably their sat isfaction, too.

Fig. 14: Current status of collaboration technology

Current landscape of collaboration technology


have integrated collaboration platforms

or tools in use

do not have collaboration platforms

or tools in use

have non-integrated collaboration platforms or

tools in use

56% Are technical collaboration platforms or tools in use and are they integrated?

26% 18%



MANAGEMENT: COMPLEXITY DUE TO DEMANDING

BUSINESS CONDITIONS

Some add it iona l surv ey quest ions w ere closely linked to the top ic of

collaborat ion. We asked respondents under which circumstances

they accomplish their p rofessional serv ices business today.

In ternal s taff on ly, or in combination wi th external support?

We first a sked whether companies need interna l sta ff on ly or externa l

cont racted sta ff to execute a p roject or serv ice. We a lso wanted to

know whether physica l goods (e.g. repa ir pa rts) need to be managed

or consumed in order to carry out p rojects or to deliv er serv ices.

62% of the professional services

companies include external contracted staff and 58% use some kind of physical

goods to execute a project or service

The fact that the ma jority of companies not on ly w ork with interna l

emp loyees but a lso hav e to manage externa l peop le and physica l

goods in add it ion to their own peop le underlines the high lev el of

complex ity many p rofessiona l serv ices ex ecut iv es a re facing today.

The shortage of specific skil ls on ly add s to th is. Th is a lso confirms that

integrated technica l collaborat ion p lat forms or tools w ould help to

rea lize p rojects or serv ices efficiently and smooth ly.



Is business done in di fferent locations?

Surv ey respondents were a lso asked whether their company is doing

business in a d ist ributed env i ronment due to nationa lly or

internationally d ist ributed locations, b ranches , or subsidiaries.

63% of the professional services

companies work in a nationally distributed environment and 43% operate

internationally

Th is aga in adds to the complex ity of the business in the ma jority of

p rofessiona l serv ices companies and of managing th is business. Apart

from collaborat ion techniques, aspects of importa nce include mult i

capab ilit ies as well a s ease of imp lementat ion and ease of use in

order to support smooth business across a d ist ributed business

env ironment. Sca lab ility might be another relev ant aspect , in

part icula r for the (approx imately) 40% of respondents who confirmed

that their company is p lanning to expand (furthe r) internat ionally.

Is travel requ ired to del iver projects or services?

Last but not least , w e wanted to know whether employees in the

p rofessiona l serv ices companies included in the surv ey need to t rav el

for their jobs or not . I t is a lmost needless to say that – in add it ion to

st rong management – a w orkforce that is t rav ellin g on a regula r basis

requires reliab le collaborat ion tools, easy- to-use a ids to manage

t rav el expenses or routes, and most p robab ly mobile support of key

business p rocesses and funct ions.

MARKETING: THE PATH TO SEGMENT OF ONE

The top ic of d igita lizat ion is certa in ly not new to most market ing and

communicat ion experts and the p rofessiona l serv ices indust ry has

been part icu la rly qu ick to adopt d igita l techniques such as e-ma il

market ing to reach customers and to adv erti se their offering. Th is has

been part icu la rly help fu l because p rofessiona l serv ices cannot usua lly

p resent hapt ic products or materials to their customers.

Howev er, in these ‘a lways on’ t imes, customer requirements a re

changing and customer centricity goes a long w ith h igher

ind iv idua lizat ion lev els in all a reas – market ing and communicat ion

included. Market ing is a t it s best when a customer feels addressed in

a persona l and ind iv idua l manner. The era of segment-of-one

market ing has just begun, which requires good content , good data

94% of respondents

said that much or

some travelling is

needed for

executing projects

or serv ices.



insights, and h igh market ing automat ion lev els in order to manage

the d iv ersity in an efficient way.

We asked surv ey respondents to giv e an est imate of the ir company’s

current market ing performance and capab ilit ies. The resu lt s giv e a

mixed p icture. About ha lf of the respondents (52%) consider their

market ing capab ilit ies and performance sa t isfactory but not

outstand ing. Almost 40% seem to be more sat isfied w ith the w ork that

their market ing and communicat ion department or agency is doing.

From an outside perspect iv e, howev er, the result s imp ly that on ly 7%

achiev e exceptiona l resu lt s in market ing and communicat ion. In

t imes of ev er- increasing competit ion, p rofessiona l serv ices companies

should be interested in becoming the ‘best in class’ in market ing and

communicat ions, especia lly in light of the ex cellent p rogress that has

been made recent ly with regard to the av ailab ility and funct iona lity

of tools to support the marketing d iscipline.

Fig. 15: Current status of marketing capabilities and performance

Current marketing capabilities and performance

highly advanced

52% 9%


advanced immature

7% 31%

advanced average immature



CONCLUSION

The surv ey of 300 decision-makers from sma ll and mid-sized

p rofessiona l serv ices firms a round the globe rev ea led that the

ma jority of indust ry p layers hav e the ambit ion of grow ing and further

dev elop ing their businesses. On av erage, they attach the h ighest

p riority to the enhancement of serv ice deliv ery and to the support

and grow th of business, both w ith ex isting clients and new ones.

At the same t ime, the surv ey showed that p rofessiona l serv ices

companies a re aware of the cha llenges that lie ah ead of them. The

creat ion of a st ronger foundat ion for growth and gov ernance and

the improv ement of customer rela t ionsh ip management and

retent ion a re considered to be ma jor cha llenges in t imes of tough

competit ion, demand ing customers, and v ola t ile market cond itions.

Enhancements to business p rocesses – includ ing better efficiency,

qua lity , and t ransparency – a re of equa l importance to p rofessiona l

serv ices companies.

These aspects appear to be closely linked to the technologica l

foundat ion of the business. How ev er, while I T inv estments might help

solv e the most p ressing issues, the reduct ion of costs is considered to

be another ma jor cha llenge. Th is might make companies seek

solut ions that require limited upfront inv estments (e.g. cloud solut ions

that a re calculated on the basis of usage).

On the one hand , the ana lysis rev ealed h igh sensit iv ity among

p rofessiona l serv ices companies w ith regard to the v alue that an

integrated v iew of the p roject v alue cha in, adv anced market ing, or

ana lyt ics can b ring to business. On the other hand, how ev er, the

surv ey exposed sign ificant room for improv ement, and it seems as if

most decision -makers who answered the surv ey quest ions hav e

recognized and acknow ledged the sub-opt ima l or ev en crit ica l

a reas.

I n th is su rv ey, w e d id not specifica lly ask for IT - related inv estment

p riorit ies because a reliab le assessment w ould hav e been d ifficu lt

since business and IT decision-makers from d ifferent a reas w ere

inv ited to take part in the surv ey, and a ll these hav e d ifferent

interp retat ions and limited v iews on IT - rela ted aspects as fa r as our

experience shows. How ev er, the surv ey resu lt s clea rly suggest that

p rofessiona l serv ices companies a re aware of the p rogress that could

be mad e in business w ith the right technology to hand.

What does th is mean? There is, of course, no officia l defin it ion of

what the right technology foundat ion is for p rofessiona l serv ices

companies. Accord ing to the surv ey, how ev er, sev era l characterist ics

receiv ed common approv al, includ ing b road funct iona lity and h igh

integrat ion lev els in combinat ion with the ab ility to enab le agility,

flex ib il ity , and speed.



TABLE OF FIGURES

Fig. 1: Basic surv ey data ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Fig. 2: Top ics considered a p riority by p rofessiona l serv ices firms ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Fig. 3: P rocess- rela ted cha llenges of p rofessiona l serv ices firms.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Fig. 4: Key st rategic cha llenges of p rofessiona l serv ices firms ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Fig. 5: Key tact ica l cha llenges of p rofessiona l serv ices firms.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Fig. 6: Ex ample of the p roject v alue cha in ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Fig. 7: Different possib il it ies for support ing the p roject v alue cha in ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Fig. 8: Relev ance of software- related top ics .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Fig. 9: Lev el of effect iv eness with regard to p roject management

tasks .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Fig. 10: Relev ance of t ransparency with regard to profitability in formation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Fig. 11: Current sta tus of the ret riev al of p rofitab ility in format ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Fig. 12: Rat ing of usefu lness of selected aspects for finance and account ing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Fig. 13: Current av ailability of analyt ics that a llows rea l -time management ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Fig. 14: Current sta tus of collaborat ion technology ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Fig. 15: Current sta tus of market ing capab ilit ies and performance.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20



ABOUT SAP

As market leader in enterp rise app licat ion software, SAP (NYSE: SAP)

helps companies of a ll sizes and indust ries run better. From back

office to board room, warehouse to storefront , desktop to mob ile

dev ice — SAP empowers peop le and organizat ions to w ork together

more efficient ly and use business in sight more effect iv ely to stay

ahead of the compet it ion. SAP app licat ions and serv ices enab le

approx imately 320,000 business and pub lic sector customers to

operate p rofitably, adapt cont inuously, and grow susta inably.

Web site: www.sap.com

SAP SE - Walldorf

Dietmar-Hopp-Allee 16

69190 Walldorf Germany



ABOUT PAC

Founded in 1976, P ierre Audoin Consu ltants (PAC) is pa rt of CXP

Group, the lead ing independent European research and consu lt ing

firm for the softw are, I T serv ices and d igital t ransformation industry.

CXP Group offers it s customers comprehensiv e support serv ices for

the ev aluat ion, select ion and opt imiza tion of their software solut ions

and for the ev aluat ion and select ion of IT serv ices p rov iders, and

accompanies them in opt imiz ing their sourcing and inv estment

st ra tegies. As such, CXP Group supports ICT decision makers in their

d igita l t ransformation journey.

Further, CXP Group assist s software and IT serv ices p rov iders in

opt imiz ing their st ra tegies and go- to-market approaches w ith

quant itat iv e and qua lita t iv e ana lyses as well a s consu lt ing serv ices.

Pub lic organizat ions and inst itutions equa lly base the dev elopment of

their I T policies on our reports.

Cap ita liz ing on 40 years of experience, based in 8 countries (with 17

offices w orldwide) and with 140 employees, CXP Group p rov ides it s

expert ise ev ery year to more than 1,500 ICT decision makers and the

operat iona l d iv isions of la rge enterp rises as well as mid-market

companies and their p rov iders. CXP Group consist s of three b ranches:

Le CXP , BARC (Business App licat ion Research Center) and P ierre

Audoin Consu ltants (PAC).

For more informat ion p lease v isit: www.pac-online.com

PAC’s la test news: www.pac-online.com/blog

Follow us on Tw itter: @PAC_Consultants

PA C - CXP Gr oup

Ho l z s t r . 26

80469 M unich, Ger many

Te l . : + 49 ( 0) 89 23 23 68 0

Fax : + 49 ( 0) 89 71 96 265

info -ger many @pac-onl ine . com

w w w .pac -onl ine . com

http://www.pac-online.com/

http://www.pac-online.com/blog

http://www.twitter.com/PAC_Consultants



DISCLAIMER, USAGE RIGHTS,

INDEPENDENCE, AND DATA PROTECTION

The creat ion and d ist ribution of th is study w as commissioned by SAP.

For more informat ion, p lea se v isit www.pac-online.com.

Disclaimer

The contents of th is study were compiled w ith the greatest possib le

care. Howev er, no liab ility for their accuracy can be assumed.

Ana lyses and ev aluat ions reflect the state of our know ledge in Ju ly

2016 and may change at any t ime. Th is app lies in part icu la r, but not

exclusiv ely, to statements made about the future. Names and

designat ions that appear in th is study may be registered t rademarks.

Usage r ights

Th is study is p rotected by copyright . Any rep roduct ion or

d isseminat ion to th ird part ies, includ ing in part , requires the p rior

exp licit authoriza t ion of SAP as commissioner . The pub licat ion or

d isseminat ion of tab les, graphics etc. in other pub licat ions a lso

requires p rior authorizat ion.

Independence and data protection

Th is study was p roduced by P ierre Audoin Consultants (PAC) w ithout

in fluence from SAP as the commissioner of the study.

The part icipants in the study w ere assured that the informat ion they

p rov ided would be t reated confident ia lly. No statement enab les

conclusions to be d rawn about ind iv idua l companies, and no

ind iv idua l surv ey data was passed to the commissioner or other th ird

part ies. All pa rt icipants in the study were selected at random. There is

no connect ion between the p roduction of the study and any

commercia l relat ionsh ip between the respondents and the sponsors

of th is study.

Best in class in the professional services industry how ... · legal services, market research,...

Documents

Transcript of Best in class in the professional services industry how ... · legal services, market research,...