At the Intersect (Series) – Spotlight on Professional Services
Over the past six months, we’ve blogged about the uptick in innovation (and competition) that’s happening at the intersection of traditional industries such as healthcare and financial services. This trend, powered by new technologies, is often referred to as “convergence.” In today’s post, we turn the spotlight on the B2B professional services sector (e.g., accounting, consulting, law and other services firms) – a sector where, until recently, firms have been somewhat insulated from change by the complexity and opacity of their business models.
Today, transparency and competition are on the rise. New technologies have made it easier for professional services clients to find, price and source highly-skilled talent. And new competitors are putting pressure on fees.
Sources of disruption include:
New technologies such as the cloud, big data, machine learning and artificial intelligence.
New competitors including (1) tech-enabled start-ups and (2) platform businesses, which allow groups of service professionals to be found, screened and hired for highly-specialized projects. Platform businesses typically reduce costs and increase efficiency through streamlined workflows and alternative staffing models.
In-sourcing, i.e., the hiring of skilled consultants, lawyers and accountants for in-house positions.
Adding to the challenge, many buyers of professional services (e.g., finance, legal, IT, HR and strategy departments) are also facing fee-pressure and disruption. In late October, the Wall Street Journal reported that, according to new research, “two-thirds of large global companies expect to automate some or most of their finance-department tasks over the next two to three years.” In April, The Atlantic similarly conjectured that “advances in artificial intelligence may diminish the role [of lawyers] in the legal system or even, in some cases, replace them altogether.”
Against this backdrop, communications professionals face new opportunities and challenges. Traditionally, professional services firms have competed on the basis of reputation and relationships, aka “social proof.” Going forward, social proof will remain an important advantage, but most professional firms will need to deliver more.
In some cases, we’ll see firms position themselves as what Forrester calls “asset-based consultancies,” which deliver packaged frameworks, processes and analytics for do-it-yourself use. We’ll see others differentiate themselves as high-end specialty firms. There will be continued growth in SaaS-based solutions. And there will be new hybrid models that pair expert technology with expert advice, as well.
To do our job effectively as communicators, we’ll need to understand our clients’ positioning in the new environment. Then, we’ll need to help buyers understand what sets our clients apart. For example:
Firms adopting a high-end, specialist strategy will need to assemble a team of experts and put their knowledge on display.
Firms competing as asset-based advisories will need to demonstrate the value of speed, consistency and greater client control.
Firms selling robo-advisory and SaaS-based services will need to highlight the cost advantages, convenience and accuracy of next-gen solutions.
Firms offering a hybrid model will need to demonstrate the oversized value that comes from high-tech plus high-touch.
In a 2013 Harvard Business Review article titled Consulting on the Cusp of Disruption, Clay Christensen, Dina Wang and Derek van Bever wrote that we’re still in an early phase of professional services disruption. “Disruption is, after all, a process, not an event, and it does not necessarily mean all-out destruction.”
Still, there are clear signs that professional services disruption is accelerating. For communicators, the smart approach is to help our clients stay one step ahead.
Connect with Meg
Email: meg@blissintegrated.com
Twitter: @megwildrick
LinkedIn: Meg Wildrick
Photo Credit: Peter Nguyen, Unsplash