For the last 20 years the ‘digital revolution’ has skirted around the edges of the professional services sector, tweaking a minor thing here or there but leaving the core business model relatively in-tact. In 2020 that has finally changed, a perfect storm of technology evolution, disruptive start-ups and a global pandemic have forced the sector into a new era, something we are terming ‘Professional Services 2.0’.
The ongoing COVID-19 pandemic has had a profound impact on the professional services industry. From forcing millions of people into remote working to disrupting the very nature of the service offerings, this pandemic has brought multiple challenges to these organisations. For business leaders around the globe, the only long-term solution to these challenges is transformation and digital is the way to get there.
While there is no doubt that the pandemic is accelerating the pace of digital transformation, technological advancements were already transforming the world over the last two decades, disrupting ways of living and working. Professional services businesses have started planning or implementing digital transformation programmes that were projected to last for at least three years. However, after COVID-19, businesses don’t have the luxury of time. They need to change, and they need to do it now.
How to digitally transform your business model
Digital transformation empowers professional services to enable new business models. It opens new ways of developing and offering their services using digital platforms to work and engage with their customers. It feeds businesses with novel insights about their customers’ needs, helping them better understand them and being proactive. Digital is also transforming the way professional services make profits, changing traditional pricing models. But how can you tap into these opportunities?
Providing the services of the future
Transforming outdated service offerings into digital-first and hybrid digital / physical offerings is what will differentiate businesses, improve customer satisfaction and create new opportunities for profit. Professional services that will invest in digital platforms that bring suppliers and buyers together are the ones that will survive and win in this digital age.
These platforms can work as networked marketplaces where your customers can access, interact and purchase your services on demand, work with your team in real-time and get support quickly, reducing the need for time consuming calls and emails. Because of their digital nature, these platforms are global and designed for scale, bringing enormous opportunities for expansion to new markets. Digital platforms also create communities and networks where the provider becomes the go-to-partner that offers timely expert and customised advice, helping customers succeed in their field.
Knowing your clients
From a survey that Calls9 undertook with In House Community to in-house counsel in 2020, we found that in-house lawyers want law firms to improve in knowing their clients and providing tailored advice. This, of course, is not limited to the legal services. People in general are now used to being offered personalised products, services and communications in their daily life and they expect the same from their professional services providers.
Using digital platforms with sophisticated data capture and data analysis ability is the best way to really understand your customers’ business needs in a very cost and time-effective way. Knowing your customers will help you improve and strengthen your existing services to match your customers’ preferences, or introduce new services tailored to their needs.
Changing your revenue models
Transforming business models through digital platforms, allows professional services businesses to offer more flexible pricing to their customers. Traditionally, professional services businesses followed capacity-leasing models using an hourly rate pricing methodology. However, in this digital age, customers are demanding more dynamic pricing models, moving towards outcome or subscription-based models.
Imagine purchasing services the same way you shop from Amazon or choosing a service provider like you choose a driver from Uber’s platform. It is easy, quick, flexible and cost-effective, exactly what today’s customers want.
Keep in mind that “successful businesses have business models that allow them to fulfil customer needs at a competitive price and a sustainable cost.” (Investopedia) Businesses that belong to Professional Services 2.0 have innovative, agile and people-centric business models that transform not only their business but also their sector.
Paul Smith is Head of Professional Services and Non-executive Director at Calls9 specialising in digital transformation and a member of the GO! Network.
Published date: March 4 2021