How to improve digital efficiency – Examples from professional services
The beauty of professional services business is the simplicity of the business model: you provide value for business customers with your expertise and consulting skills, and invoice for the work either on time & material basis, fixed project fees or sometimes with a risk & reward based success fee component included.
Competitive advantage is a sum of the people you hire, the mindset you have for solving customers’ problems and operational excellence – which we focus on in this article.
How to improve business efficiency?
Many organisations, regardless of the industry, approach efficiency problems system first. In professional services, these industry-specific operative ERP solutions are called PSAs (Professional Services Automation) where consultants mark their work hours and project managers track progress. While these tools are highly important, the role of any IT system is only to enable better business processes and achieve measurable business targets.
Before replacing an existing IT system with a new one, it is paramount to understand how well the enterprise architecture supports business processes. That typically helps uncover the real root causes driving the need for an IT system change.
Everything starts from the business strategy. Professional services companies are valued based on EBITDA, growth potential as well as market outlook. Typical business KPIs in professional services organisations include e.g. utilisation rate (UTZ), average hourly rate, employee & customer churn and satisfaction as well as growth targets.
Does your enterprise architecture support your business processes?
Modern composable business architecture serves business processes (not vice versa) and combines process or function specific tools & services that are fit for purpose. In the following diagram we illustrate the core business processes and examples of sub-processes.
Example of process map and business architecture of a professional services company
How to boost digital efficiency in professional services business?
There are many great SaaS tools and services with great APIs available to run a consultancy efficiently. However, for more forward-thinking organisations aiming to create competitive advantage, there are many ways to use technology creatively to optimise and integrate processes. Here are a few examples:
Minimise uninvoiced hours: Time tracking errors or miscommunication between sales and consulting cause missing or bad time tracking. This is typically one of the most high-value problems to be solved, because every hour marked correctly for the project order is pure EBIT. First step to improve is to create transparency and insights with data, which will help to take action, automate and optimise.
Apply process automation in finance & HR: As an example, we automate the payroll process by gathering data from various sources, including hourly and monthly salaries, all the way to payroll. This used to be done by an external finance controller on a monthly basis.
Intelligent staffing: Combine data from sales funnel, staffing, recruitment and HRIS / people systems to make better staffing decisions which will improve utilisation as well as employee & customer satisfaction.
Although this article drills down on digital efficiency gains in professional services business, the same principles apply to other industries as well. We have extensive experience and a successful track record in growing and developing profitable business operations in the services industry within and outside of the Futurice Ecosystem. In addition, we’ve helped several other companies in different industries from banking and healthcare to production and manufacturing.
To get a flying start in finding and fixing the most pressing bottlenecks in your business processes and architecture, take a look at the Enterprise Architecture Sprint.
