What are professional services? The answer to this question is far-reaching—a wide variety of service types and business models fall under the professional services umbrella. Sometimes it’s hard to encapsulate exactly what defines a professional services organization—oftentimes it has a subjective, “I know it when I see it” feel to it.
While the definition of what professional services are is always shifting as our economy evolves, it’s much easier to define what professional services organizations do:
Professional service organizations provide support in the form of contracted advice and/or performing tertiary tasks and duties.
Regardless of the specific product or service rendered, it’s common to see both B2C and B2B practices within the professional services industry. Some organizations focus on exclusively one or the other, but many practice in both.
Clients come in all shapes and sizes, but the majority of clients that professional service organizations assist share a common perspective: it’s often savvy and efficient to hire an outside expert.
Small business owners ranked “time management” as the third largest challenge they face. The first and second biggest challenges? Cash flow (obviously) and marketing/advertising (a professional service in its own right).
Spending additional time, energy, and resources on tasks that could be masterfully—and cost-effectively—tackled by a third-party professional is not a wise management strategy.
Types Of Professional Services
Products and services vary drastically by company and industry. However, the common ground among professional services providers lies within the logistics of how business is conducted.
Communication, data management, scheduling, financial reporting, and payment processing are some of the processes universally shared by all professional services providers.
Ideally, professional services providers use one system to manage their entire business to ensure work is profitable and delivered in a timely fashion. Sure, lawyers will have different needs than IT professionals, but the core pillars and processes of the professional services industry remain the same.
Below we’ll cover four of the core professional services and how each type of service provider can stay ahead of the competition in their respective lanes.
Accounting
Breakdown: Accounting agencies and service providers exist for a reason—assigning a manager within your organization to handle your finances by way of using spreadsheets typically isn’t a prudent business practice.
Tax management, expense tracking, and payroll considerations are just a few examples of what makes up the 9 to 5 of an accounting firm.
How They Can Stay Ahead: Putting aside the day-to-day duties that accountants are bonafide experts at, accounting firms that want to stay a step ahead of the competition need to place an additional emphasis on a different aspect of their business: customer and vendor communications.
For accounting firms to act as premier professional servicers, they need to be equipped with the right tools. In this case, utilizing software equipped with customer and vendor management portals will benefit all parties involved. Streamlined communication channels, virtual invoice payments, and the ability to remotely view billing and transaction histories at any time will create satisfied clients—it may even prevent those dreaded 10:00 pm “ask” emails.
After all, accountants in particular have a special appreciation for accuracy, consistency, and transparency—it’s quite literally the foundation of what they do for a living.
Consulting
Breakdown: Excluding the aberration of 2020, the global consulting industry has steadily increased in size every year for the last 10 years. Data collected by Glassdoor indicates that US-based consultants make (on average) around $89,000 annually—well higher than the overall US compensation average.
Perhaps that’s in part to the diversity of specializations within the consulting industry. Strategy consultants, management consultants, operations consultants—the list goes on. I’m sure at least a few more will be added to the list before this blog is published.
How They Can Stay Ahead: While the methodologies and specializations for consultants may vary, their goals remain uniform—to provide a premier, professional, and profitable experience for their clients.
The best way to do that? Be at the forefront of addressing the main challenges that businesses will be facing in the next 3 to 5 years. According to a survey of 1300 professional services consulting firms, the top five main challenges businesses will face, all have one thing in common: technology and its rapid rate of adoption within the industry.
- Unpredictability in the marketplace
- Changes in how buyers buy your services
- Increased competition from new firms/competitors
- The need for new skills
- Automation/artificial intelligence
Challenges 2, 4, and 5 correlate directly with technological advancements—e-commerce is more prominent than ever, development-centric skill sets are dominating the global workforce, and technologies with a focus on automation and machine learning are continuing to grow in popularity and practicality.
Challenges 1 and 3 may be age-old challenges, but they certainly have a new, technological twist to them. Moore’s Law would suggest that technological progress is advancing at a higher rate than ever before, leading to increased levels of uncertainty in how (and, in a lot of instances, when) technology will impact any given industry. As more and more businesses in all industries adopt more efficient and profitable technologies, competition will naturally increase. After all, technology tends to level the playing field.
IT Services
Breakdown: IT services encompass a wide variety of skills and disciplines. Web design, cybersecurity, software development, and database management—are all distinct from one another, yet fall under the same umbrella of “IT.”
The diversity of what falls under the umbrella of “IT services” is part of the challenge businesses face. If an organization offers a single service (for example, web design) it may not generate enough of a client base to continuously extract revenue. Conversely, if an organization offers a staggering collection of services, it may fall into a “quantity over quality” conundrum which could eventually lead to revenue woes.
Many businesses have found a sweet spot. For example, some companies may offer web design services while also managing digital marketing campaigns and social media efforts. And, low and behold, some companies are still intent on doing it all. And that’s ok—but with such a varied array of services, how can companies efficiently keep track of it all?
How They Can Stay Ahead: No matter the type of IT service a business offers, some things never change. Having real-time information available is always crucial, as is the ability to smartly manage projects.
Most of all, in an extremely skill-intensive industry like IT services, having the ability to quickly assess the skill sets, qualifications, and certifications of both existing team members and prospects in the pipeline will pay dividends down the road.
The importance of cultural fit within an organization has not been understated as of late—hiring the right cultural fit within a company leads to less employee turnover, more productivity (especially in regard to remote work), and overall higher satisfaction.
“Cultural fit” isn’t just an organizational-wide consideration—it’s important that every team and cluster of employees within an organization is able to mesh well together.
Before worrying about the projects and tasks themselves, it’s important to consider how employees are placed together. By utilizing all of the tools available to accurately assess candidates and current employees alike, IT services teams will be able to tackle any task in front of them.
Legal and Law Firms
Breakdown: Of all of the professional services that we’ve discussed so far, I think it’s a fair assumption to say that legal services should be the last type of service that any business attempts to solve unaided. (Disclaimer: not legal advice.)
In America, everyone has their own opinion on certain laws, legal practices, and even lawyers themselves. The beautiful part about our legal system and its practice is that we have the unalienable right to maintain and voice opinions of all flavors and varieties.
Though our nation’s legal practices and procedures don’t come without scrutiny, one thing is for certain—many of the societal advancements that we’ve benefitted from have come after tireless, tedious, and often thankless hours of legal work.
How They Can Stay Ahead: If there is a criticism to be made about the legal profession in America, it mainly revolves around its “pay-to-play” model. Yes, the 6th Amendment guarantees every citizen the right to counsel. However, every American knows the reality in which we live: the more you pay, the more you get.
This isn’t an issue that can be solved overnight, nor can it be solved by any single person or law firm. Most lawyers aren’t Cochrans and Shapiros—they’re public defenders, paralegals, and employees of smaller firms that don’t have the luxury of attracting clients with 8-figure net worths.
Providing legal services is about doing right by your clients. One way to do that without a Hollywood-esqe budget is to utilize technology to its fullest.
Document management, time and expense tracking, and client communication channels don’t have to be disconnected and burdensome to maintain. They can be managed in a single, easy-to-use platform. Technology should work for you—not the other way around.
Ensuring Professional Services Success
On the surface, it may seem that lawyers and software developers don’t have much in common. If you ask them, they might even agree.
But, what they share is their ability to provide a service that they’ve trained for—training that, in many cases, has encompassed the vast majority of their adult lives. Success comes in all shapes and sizes, especially when you’re talking about the professional services industry.
Servicing customers is never an easy task. There are a million tips and tricks out there on what to say, do, and act like in order to deliver the best results. Many of those pieces of advice are worthwhile.
At the end of the day, it all boils down to the same thing—leveraging the tools and technology at your disposal in order to provide the best service possible.