Leading through innovation: How professional services can grow with technology
Sage’s Jordaan Burger: CFOs in the professional services sector are the drivers of the digital revolution.
Professional services are being affected significantly by new technologies, new service delivery models and new challengers. They are under pressure to serve their clients, trim costs, and plan for volatility and uncertainty.
Jordaan Burger, Sage’s financial director for the Middle East and Africa, sees more opportunities than challenges for professional services firms. He comments:
“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.”
The CFO’s evolving mandate
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 surveyed said that their role has evolved and is no longer just about numbers and fiscal responsibility.
CFOs at growing businesses are nearly unanimous in agreeing that next-generation technology that incorporates emerging technology has been critical to their success. In fact, nine out of ten businesses have adopted emerging technologies in some form, and over half of these businesses are implementing advanced or cutting-edge techniques.
In using digital tools to become more specialised and focused on 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 challenges 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,” says Jordaan.
Ditch manual processes
The explosion of cloud computing, big data, artificial intelligence (AI), and machine learning means that time spent on routine, repetitive and predictable tasks is greatly reduced. “Professional services firms are constantly trying to balance talent and available capacity with clients’ demands and workloads. There are potentially hundreds of applications for technology to streamline administration within these companies,” comments Jordaan.
Technology-enabled tasks could include automating invoice re-issuing, streamlining the quote-to-cash cycle, and expediting time-and-expense processes. Timesheets will take 20 minutes to complete, instead of two hours, while expense submissions will be automated. Online forms and chatbots can provide information to clients and complete simple tasks that used to take humans a long time to complete.
This frees up time to focus on the things that technology cannot handle, 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,” adds Jordaan.
Small but nimble
The growing demand for digital skills and specialist capabilities is creating opportunities for smaller, niche suppliers and new tech-savvy firms. According to an Economist Intelligence Unit survey, 72 percent of multinationals expect SME providers to play an important role in their business five years from now. Half of the executives surveyed say they would hire SMEs over large firms if they could strengthen their value proposition.
Small companies do not need large amounts of capital to access the same powerful software-as-a-service (SaaS) and cloud solutions large companies are using to drive their business. “As the world moves to more agile and decentralised ways of working in the wake of the pandemic, smaller services firms are well-positioned for changing markets. Today, it’s about speed and flexibility, rather than scale,” says Jordaan.
The Economist Intelligence Unit survey indicates 82 percent of respondents believe that, in five years’ time, specialised service providers will be more valuable to their business than those with broad offerings. “Many of the ones that will succeed, will find a niche to specialise in. For example, information security rather than being a jack-of-all-trades software developer or a management consultant that focuses on the logistics industry,” comments Jordaan.
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. With the help of machine learning, some law firms are reinventing themselves as legal services software companies that sell licences rather than advice.
“Today, business units within firms are often seeking external partners not just to perform the same work in a cost-effective way or to a higher standard, but also to revolutionise how the work is done,” explains Jordaan.
Audit, tax and advisory firm BDO uses a range of emerging technologies across its audit and advisory divisions. The firm is currently in the process of building our own platform to enhance audit in numerous ways. BDO also relies on some unusual technology applications – including drone technology to perform livestock counts.
“We recently visited a farm and used the drones to count the sheep. This technology considered the fact that the sheep were continuously moving around and has proven to be quick and accurate. The drones would fly above, capture the aerial shot, and the AI would determine the number of sheep,” comments Christopher O’Flaherty, analyst at BDO Financial Services.
Globally, professional services providers are often perceived to be slow adopters of technology, but this is changing due to increased competition and customer demand. In South Africa, professional services firms have embraced technology.
“It depends on the subsector, but South African professional services firms are generally enthusiastic users of technology to drive efficiencies and enrich their customer service. Over two-thirds of South African accountants in practice are ready for the next wave of digital technologies, like robotic process automation, artificial intelligence and blockchain, according to Sage research,” says Jordaan.
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 themselves 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 they offer their clients.
“These powerful insights, combined with human expertise, produce a significant competitive advantage for your firm,” concludes Jordaan.