4 reasons your professional services firm should adopt digital transformation
How professional services companies can lead through innovation and grow their businesses.
Professional services companies are increasingly using digital technologies to more efficiently serve their customers, cut costs, and plan for volatility and uncertainty. And never has there been a more volatile or uncertain time than right now.
CFOs of professional services firms are well-positioned to become visionaries capable of developing the business strategy and shaping the company’s future. To do this, they need to take ownership of the digital transformation process. Although, it seems like many already are.
The CFO’s shifting mandate
CFOs of law firms, accountancy practices, agencies, and others in the professional services sector are very much the driving force of the digital revolution.
According to recent research by Sage, as part of its CFO 3.0: Digital transformation beyond financial management report, almost all (90 percent) of the senior financial decision makers we surveyed said their role has evolved and is no longer just about numbers and fiscal responsibility.
CFOs at growing businesses are nearly unanimous: Next-generation technology that incorporates emerging technology has been critical to their success. In fact, nine out of 10 businesses have adopted emerging technologies in some form, and over half of these businesses are implementing advanced or cutting-edge techniques.
4 reasons to digitally transform your professional services business
Here, we provide four key reasons why your professional services firm should start its journey to digital transformation, if it hasn’t already.
1. Ditch the manual processes
The explosion of new technologies, like cloud computing, big data, artificial intelligence (AI), and machine learning, means you no longer have to spend time on routine, repetitive, and predictable tasks.
In professional services, these tasks could include automating invoice re-issuing, streamlining the quote-to-cash cycle, and expediting time-and-expense processes. You’ll also eliminate manual effort and countless spreadsheets, cut project reporting time and close books faster.
This frees up your time to focus on the things that technology can’t handle in a professional services firm, like knowing where to focus to drive continuous project growth and improvement.
What’s more, you’ll also have time to develop interpersonal relationships with colleagues and clients, and play a bigger role in developing your business’s strategy and vision.
According to an Economist Intelligence Unit survey, 82 percent of respondents said that in five years’ time, specialised service providers will be more valuable to their business than those with broad offerings.
CFOs can use digitisation to help their firms become more specialised in certain areas, to provide niche expert advice, like legal advice in medical malpractice, or financial advice for small businesses.
2. Tap into your data insights
In embracing big data and AI, law firms, accountancy practices, and other professional services companies learn more about their customers and the industries in which they work. They also know which projects have higher margins, which clients are more profitable, and which employees are most productive.
This enables companies to reposition as business consultants in addition to their role as accountants, lawyers, or other professional consultants. As a result, they offer better advice and add value to the services that they offer their clients.
For example, using digital technologies, CFOs at professional services firms can pre-empt disruptive competition for their clients. They can analyse key metrics like project and client profitability, delivery costs, and employee utilisation across multiple entities, locations, industry segments, and service lines. This gives them real-time visibility into things like budgets versus actuals, to avoid cost overruns, optimise project performance and profit, and maximise the utilisation of teams.
These powerful insights, combined with human expertise, produce a significant competitive advantage for your firm.
3. Drive positive cultural change
Digital transformation goes beyond choosing and implementing technology: CFOs must also consider the cultural impact. How will these new solutions change how your employees work? And what skills will you need in future as roles and responsibilities change? Whatever the answers and whatever your approach, all change needs to be driven and managed from the top.
Communicate with your teams about:
- Why you’re implementing the new technology: Professional services firms are constantly trying to balance talent and available capacity with clients’ demands and workloads.
- How it will impact their roles: Timesheets will take 20 minutes to complete, instead of two hours; expense submissions will be automated.
- What outcomes they can expect: More time to develop their skills.
Together with a supportive management team, senior financial decision makers can champion the change programme throughout their various roles and across the business.
However, digital transformation can create organisational tension if it’s not managed strategically. For example, traditional lawyers and accountants may feel threatened by new hires, who bring crucial digital skills to the organisation.
This is where senior financial decision-makers will play a crucial role in cultural change and management. They will need to ensure unity of vision around the changes taking place and their goals for the business.
4. Boost agility
The ability to tap into on-demand support from cloud-based technology instantly improves your agility.
For example, you could move towards a hybrid staffing model that includes employees and contingent workers. This means you can quickly and easily scale your staff numbers up or down, depending on client demand and business needs.
Cloud-native business management applications enable you to share information with your clients, anytime and anywhere, either through technology or via contact with their lawyers and accountants. Online forms and chatbots can provide information to clients and complete simple tasks that used to take humans a long time to complete.
Changing client behaviour and expectations, as well as the need to reduce costs, increase speed, and engage with clients, are driving digital transformation initiatives in professional services firms. In using digital tools to become more specialist and focused in their legacy fields, professional services professionals can lead through innovation and grow their businesses.
As the CFO of a professional services firm, you have the opportunity to use digital transformation to do more than simply fend off these challengers and to reduce costs. You can also enable your colleagues to provide a more responsive, holistic, and bespoke service to your clients, so that you more effectively meet their needs.