10 Major Trends that are driving the Professional Services Market
The professional services sector, which is really diluted to the basic definition of selling one’s time, has been largely unchanged while other industries are reeling from the rapid changes in technology.
According to the report of Market Research, the professional services industry is projected to grow by 5.4% from 2016 to 2020. By 2020, the market would have breached the $5 trillion mark. It’s not really that surprising considering that specialists in the professional services industry have historically been paid very well.
However, the professional services industry is not insulated from the digital disruption. A decade or so from now, for instance, the industry will be significantly different due to the changing client expectations and demands, distribution channels, technological advancements, nature of the jobs, as well as the skills demanded by the employers.
Here are the 10 major trends that are affecting the professional services market:
- Social media continues to evolve — Social media has become the preferred communication tool by people. One benefit is that the interaction is more personal compared to email and the response is almost instantaneous.
- Clients want more — According to Consultancy UK, clients now are demanding more from professional service providers in terms of the value, time, speed of delivery, accountability, and returns.
- Competition — In the same survey, 8 in 10 executives claimed that the competition has increased in the past 12 months. That means their market is shrinking. The power to pick and choose has shifted from the service provider to the client.
- Automation of business workflow — More and more companies are automating their processes and workflow, which radically changed their back-end operations. This makes them more efficient while allowing them to save on operational costs at the same time.
- Use of freelancing services — Outsourcing some of the tasks that the companies could not attend to has increased recently. And this will only be projected to grow in the next few years as freelancers fill the gap of personnel shortage.
- Modularization — Services are now being unbundled where clients can pick ala carte from the list of products that the company offers. The company will collaborate with other professional service providers for a large task that it won’t be able to deliver.
- Globalization — Technological advancements allowed the world to shrink down to digestible size. A client may outsource the project to a firm half a world away in order to cut down on costs. Companies need to think value-adding on top of their main services in order to compete.
- AI — Speaking of technology, more and more companies are utilizing artificial intelligence technology in order to deliver a more efficient service, as well as drive down their operational expenses.
- Virtual firms – It’s the same vein, the rise of virtual firms added another layer to the competition. Interaction between providers and clients is no longer face-to-face.
- Value-Oriented revenue model — The operative word here is value in order to create a customer experience. Companies are slowing down and have stopped looking at their clients as a source of revenue but rather people who need their help.
Technology is a major disruptor in any business. The professional services company need to continuously review and alter its business model, which also includes modifying internal culture, to be responsive with the times. The customer behavior has radically changed over the years and they are more discerning and demanding. That means companies that are still playing catch-up won’t survive for long. You should be able to change your perspective, invest in new innovations, and use technology to your advantage (such as the use of analytics, for instance, in order to understand customer behavior) in order to create demand.