Open the bottleneck of innovation in professional services

There’s been a shift. Many professional services firms are being forced to rationalize costs and find innovative ways to do more with less.

Better ways to solve problems

Professional services firms usually focus on solving problems for their clients. However, they can often reduce their costs and differentiate their services by solving either internal problems or by improving the solutions they currently have. For example, many of today’s firms can recover costs by improving their decision making, recruitment and remote productivity.

Faster data-driven decisions

“When I'm working with management teams at professional service firms, we often need to consider the information being delivered to the decision makers in the firm,” Sanchez said. “We consider how that information could be improved upon, either with a dashboard interface or other types of reporting, to help leaders make decisions more quickly and more efficiently.”

More competitive recruitment

“It's also about being attractive to potential lateral hires,” Sanchez said. “Law firms often recruit partners from other firms. So, what's making you more attractive than other firms?” By automating work and streamlining processes, firms can effectively increase the billable hours they have available. Even better, they create an environment that helps recruit and retain the highest performers.

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Solutions for services firms

Do more with less

Doing more with less is never easy. There are always barriers that require smarter solutions and new approaches.

For example, many firms have a high volume of manual transaction processes. These firms often struggle to send bills and collect payments efficiently. Likewise, they might not manage their vendor payments effectively, sending payments early when that money could still be earning interest. Automating these processes — or not automating them — can come with unanticipated costs.

You might encounter unanticipated costs if you: 

• automate some manual processes.

“The challenge is usually the 20%,” Kohm said. “The 80% are the usual transactions that you can standardize and automate — it's a matter of automating the smaller bucket of transactions that are outliers.” These outliers can come from legacy processes, contracts or other past decisions.

• don't automate some manual processes.

The losses from lingering manual processes can add up or create larger issues down the road. “Manual transaction processes can break down and create a significant challenge for organizations — whether they are write-offs at some point, issues with outside auditors or issues with their board around their controls,” Kohm said. 

So, how do you find the right answer? To determine which processes should be priorities for automation, firms need to understand the real costs. That requires knowledge beyond automation technology. It requires business knowledge that can evaluate and document the problem processes to address.

Open the bottleneck

“One challenge that firms have is not letting their big solutions get in the way of smaller solutions,” Brown said. “When you take on a high-touch big build, it often bogs down your resources. So, while you're spinning on getting something big done, you're not solving a lot of small and medium-sized problems.”

Drive the change

Even small solutions need to be managed appropriately, sometimes including a plan to drive user adoption. “We see that a lot with attorneys,” Sanchez said. “They don't want to change the way that they're doing work, and the way that they've done it in the past. It's a people-first business.” Plus, IT and cybersecurity teams will have important questions about how to ensure the security of the firm’s data and systems.

To help manage and drive the success of small and innovative solutions, firms need to show that the solutions are secure, profitable and supported.

Ensure security

New solutions must not access data, enable users, or introduce APIs and other external elements in a way that the firm’s cybersecurity plan did not anticipate. “Get buy-in on the cybersecurity around the data that's being used, which might be big data that is being housed somewhere else,” Sanchez said.

Show the money

“I think if you put metrics behind the benefits, it can really help drive adoption,” Sanchez said. “Show those achievable results — where does this impact a partner, like distributable earnings, or how do they see it in their pocketbooks? That helps you build the case around the need for it, and the benefit of it.”

Pave the path

“You need to have a structured methodology for determining what you believe your ROI is going to be,” Brown said. “Make your best attempt at a type of formula your organization agrees to use.” This standardized calculation can come from the stage where you prioritized the process for automation.

Lead the way

“A new solution needs to be championed from the top, as well as having champions within the organization to drive both adoption and the direction of the solution,” Sanchez said. An economic downturn may help solidify support for digital transformation, so now could be the perfect time for leaders to drive tech efficiencies that are both small and large.

Together, these tactics can help feed a flow of new solutions that open the bottleneck of transformation. “That's the only way you can effectively manage a pipeline of automation that you want to get done, short of the loudest voice or the most senior person getting what they want,” Brown said. “If you want to democratize it, then you need ROI, you need folks on your team or within your organization that are sponsoring that, and you need to have the capability to actually get it done.”

The need for “now”

“I think the need for cost reduction is going to be a continual trend, where firms are looking at how to minimize costs in this recessionary period,” Sanchez said. “It's a real trend that we're seeing in the marketplace, and something that we'll continue to see — organizations investing in ways to be leaner and weather the storm through economic upturns and downturns.”

What are some of the things that you can do to identify the costs you can trim, and what are some of the things that you can do once you've identified them? The potential for cost savings from automation solutions is powerful, from internal business services to external client services.

“Ultimately, professional services is a competitive space,” Brown said. “When you're talking to customers, they expect to see a combination of not only subject matter knowledge but technology as well. You can be assured that your competitors are showing clients how they're solving problems with solutions that are anchored in not only in the subject domain and brand reputation, but also in technology.”