The professional service industry—any third-party consultancy or support service that helps businesses operate better–is massive. The professional services industry makes up about 2 percent of the global economy. However this market is changing rapidly.
The rise of Artificial Intelligence (AI) and automation mean that professional service businesses don’t only have to worry about human competitors; they have to worry about machines as well. The professional services sector will face an onslaught of new competition in the years ahead, and when it does, service-based businesses need to be able to set themselves apart and prove their value – or die trying.
As technology advances and the world shifts, every professional services business will be put under the microscope by its clients and forced to distinguish itself. Unfortunately, the fields in which differentiation is most critical can also be the ones that are hardest to showcase. Often there aren’t metrics to point to and firms can’t compete with algorithms in terms of price.
To be truly successful in the new marketplace, businesses need to find new ways to set their services apart to save themselves. The following are three ways firms can achieve this:
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AI has leveled the playing field, making information easily accessible to anyone with a smartphone, a rapidly growing segment of the population with mobile devices now outnumbering and multiplying faster than humans. As such, one of the biggest value-adds that any professional service can offer is its knowledge. Industry expertise, experience and understanding of the clients themselves are hugely important. In fact, a recent survey of professional services firms found that being able to demonstrate expertise is the most important factor for winning new business.
That said, knowledge at firms can easily become siloed if resources are limited. Even the smallest companies these days often need to operate globally, so having access to knowledge from all over the world is also a massive asset, lending firms provide extremely valuable insight that competitive alternatives might lack. One way to diversify knowledge is to alter corporate structure; for example, Grant Thorton UK moved to a shared enterprise format to give voice to all of its employees. Firms should also take a closer look at software to engage and interact with remote teams and leverage their expertise as well, without relying on workflow-slowing email back-and-forth.
Another way professional services firms can distinguish themselves is to highlight their creativity. Creative contributions can’t be outsourced, automated or devalued. A company’s creativity will always be a powerful leveraging point with clients. Finding the creative areas where a firm’s creativity flourishes and how to showcase that creativity can be a huge boon. For example, this might mean hiring diversely, providing creative resources, or even acquiring a whole new company like PricewaterhouseCoopers did last year.
Earlier this year the Financial Times wrote on this very topic, reporting that the big four accounting firms are pushing deeper into consulting in order to remain competitive in a market that is rapidly changing the status quo. Thinking outside of the box and looking to expand services is the only way firms will survive.
Most importantly, service-based companies must learn to dissolve the wall between themselves and their clients. Good service experiences ultimately boil down to relationships built on communication and trust—they’re what make or break any client engagement. According to Robert Eccles, author of “The Value Reporting Revolution,” the more information firms disclose, the more likely they are to win confidence and investment (within reason, of course.) Corporations are being held to increasingly high transparency standards (42% report this as a key factor in winning business!) and they’ll expect their service firms to adhere to the same level of disclosure.
There is good reason for the rigorous expectations that businesses will have for their chosen services, as illustrated by the fraud behind the European rotation. Client companies have a lot at stake. They’re entrusting some aspect of the future of their business to the care of an outside entity. The less a professional services firm is seen as an “outsider,” the easier it becomes to win a client’s long-term confidence and retain their business.
Artificial Intelligence harkens images of the Terminator and of machines of our own making taking over; however reality is not quite that scary. AI and automation provide an opportunity to move beyond business as usual. When business is going well, it’s easy to sit back and be complacent. But truly successful organizations are constantly evolving, with an eye to how things might change in the future. Professional services are incredibly nuanced and driven by humans and the wisdom they bring to the table. These firms add indispensable value to those they serve and the more they can clearly demonstrate this, the more they’ll thrive, even in the face of a more competitive environment.
Image: Michael Coredda