- October 31, 2019
- Category: News
For practically every sector, digital transformation is now a key business priority. In one study, 85% of enterprise decision-makers stated they have a two-year period to make significant inroads into digital transformation or they will fall behind their competitors and suffer financially. Ross Timms, Head of Strategy at Rufus Leonard, shares how professional services firms can overcome the two main barriers to successful digital transformation: definition and impact.
With $1.18 trillion predicted to be spent globally on digital transformation technology and services in 2019, according to IDD, this brings manifold opportunities to the professional services sector. From competitive differentiation, fighting the in-sourcing trend and more efficient acquisition, to the switch to outcome-based contracts rather than hours worked, digital transformation is fast becoming a driving force in the industry.
From this changing environment comes two key trends – increased servitisation and a move towards an on-demand workforce.
Professional services are increasingly leaning on digital channels and tools to meet rising customer expectations. This could be building their brand through meaningful thought leadership content, personalising client interactions or automating processes to save time and money. Differentiation comes when companies proactively add value for their clients – making themselves indispensable partners through digital tools that make processes easier or allow clients to self-serve.
And another key area for unlocking value is the intersection of tech and people. With 38% of the professional services workforce now considered ‘non-employees’, talent investment is now shifting towards a hybrid model of employees and contingent workers. This brings a new emphasis on digital collaboration tools, training and upskilling on-demand as a means of differentiating professional services’ workforces.
As clients demand more value, more quality and more efficiency, 41% of consulting practices cite ‘providing more value at the same cost’ as one of the top challenges.
Choosing the right transformation
To be successful, you need to know why you want to transform, and therefore what kind of transformation your business needs. Following 30 years of helping business leaders transform their organisations – from BT’s first website in 1996 to BBC’s future of voice strategy in 2019 – at Rufus Leonard [a creative agency and consultancy] we typically see three distinct types of transformation, each with their own characteristics:
Change how you do business
Responding to changing customer expectations, offering the same core business functions but delivering them in new ways, through new processes and new technology.
Example: PwC is one of the most renowned professional services firms in the world. They recognised the opportunity to move into new markets. Partnering with Sage, they launched My Financepartner; a subscription-based accounting service aimed at small, growth-oriented companies. Using cloud-based accounting technology paired with on-demand human expertise, My Financepartner lets companies tailor the accountancy support they need and choose when they want it. It allows them to both self-serve and quickly access expert accountants when needed. While this tool can help a business of any size, its use of digital tech to offer efficiency and scalability allows PwC to access new and nimble sectors like small businesses and start-ups who are looking for high value at a low cost.
Change your business
Changing your businesses offer to meet changing consumer needs and solve problems in new ways, often with new products or services.
Example: Over the past few years, many consultancy firms have recognised the need to evolve their offering for the digital age. This hasn’t meant changing their core business, but rather evolving their offering using digital as an integrated growth platform, positioning themselves as one-stop shops for digital needs (including digital transformation consultancy).
“Professional services firms are recognising the need to evolve their offering for the digital age. This brings a new focus on upskilling talent.”
– Ross Timms, Rufus Leonard
Most notable of these has been Accenture and their Interactive Division. One of the most acquisitive in the business, Accenture Interactive has made some notable deals in the past few years, including Karmarama in 2016, Irish shop Rothco in 2018 and Droga5 earlier this year. These acquisitions not only allow Accenture to keep up with digitally-evolving industries but works on reciprocity of skills – large consultancies bring strong existing client relationships, global and local opportunities and bigger budgets, while digital and marketing agencies bring creative talent and technological innovation. This gives consultancy firms the ability to offer more value than before.
Change your market
Disrupting the fundamentals of a market or creating a new market altogether.
Example: Founded by a trademark lawyer, data scientist and software engineers in 2012, TrademarkNow have been part of disruptive force in intellectual property law through the introduction of automated trademark management software. Gartner estimates the global Intellectual Property Software market will more than double in the next 5 years, reaching $5,089 million by 2024, up from $2,500 million in 2019.
TrademarkNow replaces manual research by providing name and image trademark search, watch and analysis. Its unique AI model can take real world complexities into account, and it covers 180 countries’ trademark registries as well as a slew of common law data sources, providing results in seconds. In 2016, the company almost tripled in size, and the following year it received series B funding of combined €3 million which has enabled a full suite of integrated trademark lifecycle management tools. In May 2019, the company launched a self-serve pay-per-search offering that made world-class trademark tools accessible to any anyone in the world, further disrupting the industry.
The drive to digital transformation needs to balance two things: the practical need and the requirement for a north star. The former is driven by pressure on profit and the need to move at the speed of the customer. The latter is driven by your firm’s mission, purpose or vision. Aligning your brand to your technology gives your platform a purpose, a role beyond the practical and a clear point of focus which drives transformation efforts.
Find the single point of focus
Defining the purpose of your transformation programme is integral to measuring its impact and success. Once you’ve defined your ‘why?’ you can distil this into a single point of focus that explicitly meets top-line commercial objectives.
Looking back at our three examples, all of them aligned their digital innovation to a single point of focus. PwC partnered with cloud-based technology to provide a service offer tailored to a new sector of growth. Accenture recognised the need to expand into new spaces to meet client demands and cultivate growth. TrademarkNow streamlined the many complex variables of intellectual property within a suite of intuitive and widely accessible tools, part of a wave of disruptive IP software replacing a once manual-industry. A purpose-led approach to innovation helped each of these firms define growth and performance goals and guided how technology and innovation could help meet those goals.
In turn, this single point of focus acts as a guiding star for how to leverage your brand, how to shape your customer experiences, understand what’s required of the organisation and your technology platforms. Ask yourselves, ‘how might we defend or improve our brand market position/ensure ongoing user relevance/create internal alignment/maximise platform performance?’.
Measuring the impact
Understanding this creates a clear platform to identify and align KPIs across the firm. Do you need to increase brand value/equity or increase share price? Do you need to create channel shift through self-serve or improve customer satisfaction? Do you need to reduce employee churn or improve workforce utilisation? Or, finally, do you need to increase platform utilisation or ensure security of data and information?
This approach makes sure that a micro view on performance aligns back to the macro measurement of impact and progress. It gives the firm the levers it needs to keep everyone on course over a multi-year programme of significant change. And, crucially, it provides a clear goal to galvanise everyone in the business.
However you chose to define success, bringing both vision and impact into a single tool is the biggest single step any organisation can take to make sure they are part of the 15% of companies that are successful with their transformation ambitions.