Just like any other industry, professional services are facing a never-ending onslaught of challenges. Despite numerous opportunities for success, there are constant forces that act against companies in this sector. Along with other mounting issues in the economy and constantly changing business climate, organizations need to adapt to changes within their respective markets and internal demands.
Besides having reliable personnel, resources, and management tools to leverage success opportunities, managing business operations requires a great deal of sophistication and flexibility. So, what are the biggest challenges facing professional services companies today? Let’s dive in!
Customer Acquisition and Retention
One of the key sources of profit for professional services firms is their customers. With the ever-increasing competition in constantly changing markets, organizations find it challenging to acquire new clients and keep existing ones. Customer acquisition and retention challenges in the professional services industry arise from:
- Increased competition
- Lack of customer loyalty and trust
- Problems related to capturing customers attention
- New business models and changing market trends
- Markets crowded with advertising messaging
Ask yourself the following questions: What can be done to make our company more appealing to customers? What are the challenges faced by organizations in the industry that we can take advantage of? How can we develop innovative and effective marketing strategies to acquire new clients? From creating more personalized messaging to identifying customer pain points and offering relevant solutions, companies can significantly improve their customers’ experience.
At the same time, with so many firms competing for business, it may seem challenging to keep existing clients. It’s not a secret that customers only return to brands that they had good experiences with. Improving the quality of your services and increasing your customer engagement can help keep your customers satisfied and ensure they’ll come back to you. Try conducting surveys to get your customers’ feedback or send engaging emails providing your users with valuable information.
New Technology Adoption and Onboarding
In the digital transformation era, every organization needs to apply new technologies to stay ahead of the competition. The difficulty of adapting to new technology and keeping up with the trends is among the key challenges organizations face.
Complex and time-consuming technology adoption processes followed by staff training can be exhausting for organizations and their employees. Besides, there are technological changes and operational updates to be made within the companys existing IT environment. The first step that professional services organizations should take on the way to successful technology adoption is to assess and identify the current system gaps. To conquer the technology challenges faced by the service sector, you need to:
- Understand your technology needs.
- Keep an eye on trends in the industry, including new technologies that may influence your services and employees.
- Evaluate your team’s capabilities, skills, and priorities.
- Explore tools that can help you access and use new technologies effectively.
- Compare available technology options and their impact on your business to select the right software for your professional services company.
Talent-Sourcing and Further Retention
Talent sourcing is also part of the challenges faced by the professional services sector. A constant challenge for HR departments is to find qualified candidates and retain confident, reliable employees. The grueling talent-sourcing and inadequacy of the requisite expertise can slow down processes and threaten the balance of your workforce.
With so many firms looking for employees, recruitment processes can become chaotic and highly competitive. So, understand what potential candidates look for in their potential employers and devise custom strategies to attract the right talent to your firm.
To retain top talent:
- Offer competitive pay packages.
- Create a career development plan for employees.
- Listen to your people and make sure they have a voice in the organization.
- Adopt a careful new candidates’ selection process.
- Set up special mentoring programs for junior staff.
- Use technology to create engaging training programs and enable efficient collaboration between the teams.
Since markets change constantly, remember to keep your workforce abreast of the latest industry developments. Continue investing in employee development and personal growth opportunities while factoring in the latest developments in the market.
Resource Loading and Allocation
Resource management issues can hamper your business growth and are considered one of the biggest challenges faced by SMBs and large organizations. Finding the right employees to fill all your time slots is challenging. Not knowing how many hours each person has available can overload one person with tasks while another is not busy enough.
Another challenge facing professional services companies today is the lack of proper understanding of the available resources, their skills, and how to allocate them equally to keep everyone engaged and on pace with the projects.
To resolve resource loading and allocation issues and find the right people for the right work, you should:
- Understand and get a handle on your business requirements.
- Ensure all resources are available for your system-wide or project-specific requirements.
- Each member in the organization must understand their job description and specific roles in the company well.
- Evaluate your employees skills and knowledge.
- Use technology to track your staffs workload and reallocate your resources when its needed.
Remote and Hybrid Team Management
Remote and hybrid team management is one of the critical questions that has been raised in the business over the past few years. COVID-19 has been one of the significant challenges facing professional services companies today, forcing organizations to require hybrid and remote teams.
Keeping your employees’ efficiency, productivity, and collaboration at the same levels can be challenging without enough resources and training. Hybrid and remote teams can benefit companies looking to scale their workforce and business globally while also competing with organizations operating remotely. To achieve your remote and hybrid team management goals, be clear about your expectations. Leverage technologies to keep your teams connected and make sure they all are on the same page throughout the entire project development process.
Managing Cash Flows
Cash flow management is one of the major challenges facing professional services businesses today. Luckily, a solution already exists. In case you are oblivious to our Birdview financials management module, automated billing and invoicing is an indispensable tool for any company. Neglecting either one will seriously impact the company’s cash flow velocity.
An effective cash management strategy will help the organization negotiate better terms in its long-term contracts, save on working capital requirements, and reduce late fees. Billing seasonality can make cash flows challenging to predict. To manage cash flows effectively:
- Review your billing and invoicing schedule for accuracy and make adjustments as needed.
- Create a workflow to verify, classify, approve or reject invoices quickly.
- Ensure that the accounts department is equipped to handle large volumes of invoice data.
- Create a cash pooling system based on specific criteria so that all payments are made for all invoices at the same time.
- Leverage technology to automate most of your billing and invoicing processes to eliminate the risk of human error and payment delays.
Complete and accurate invoice reconciliation makes cash management a cinch. Establish how long it takes to collect from each client and factor that into your payment terms and conditions.
Whether you want to be aware of challenges faced by professional services companies before you start a business or want to maintain a successful business, the highlighted points will be of great help to you.
How Can PSA (Professional Services Automation) Help?
The list of challenges facing professional services firms in 2021 is long. But the good news is, Birdview PSA can help varied professionals improve performance and productivity and address the above-illustrated issues.
Do you aspire to ensure efficiency, accountability, and transparency in your projects, resources, and finances? Then you are looking at Birdview PSA. So, don’t look any further.