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For Global Professional Services Firms, Remote & Hybrid Workforce Means More Compliance Issues

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The rapid transformation of business models and digital innovation has brought change across the professional services industry. Most professional services firms have adopted working remotely and need modern tools to manage business processes, projects, people, & revenues in a highly competitive market and drive future growth and profitability.

Being geographically and organizationally spread, large professional services firms tend to use very many disparate systems to take care of their day-to-day functions around work, time, projects, and people. As a function of this model, services businesses tend to manage their compliance and data governance function in a decentralized model. A case in point is a services organization which has a fragmented ecosystem and a mix of point solutions and home-grown options to manage their project time. They also have half-baked features in backend systems and manual processes across the entire global organization. Disparate, disconnected time tracking systems affect their revenues and profitability, but a lesser understood fact is that there is a huge impact on labor compliance and overall governance aspects.

Until now, service organizations have been thinking of compliance as defining a set of rules and frameworks to maintain business compliance. But let’s consider what compliance is capable of doing and how it can drive more profitability for the business. As a Deloitte report points out:

“Organizations will integrate compliance programs from across their enterprise to drive efficiencies … Facilitating integration of compliance programs through greater knowledge sharing, leveraging of common systems and controls and coordination between teams will drive synergies through harmonizing processes and approaches” to the various aspects of a compliance program.

Profitability is a primary growth enabler in professional service firms, but the lack of a holistic approach for compliance and data governance is not only adding to their operational costs but impacting their potential growth opportunities. Labor compliance has been a key focus over the last few years especially with professional services firms being hit with multiple overtime, meal breaks and other labor litigations closely tied with how time is spent, in what measure and on what tasks. Having time data handy and leveraging that with local pay rules information informs any IT services or consulting firm if they are on track w.r.t their mandatory compliance needs.

Integration of the entire time tracking ecosystem is a primary challenge and hindering their future growth. As professional services are looking to scale their business and enter new markets, the siloed approach for compliance and data governance will only exacerbate the problem in the future. It’s time to re-evaluate your business and be a future-ready company.

Data Silos Increase the Risk of Non-compliance

Did you know that organizations pay anywhere between $8M and $30M a year towards non-compliance? As business models shift towards a hybrid digital workplace, one of the risks organizations face is compliance with the latest industry standards and recognizing revenue in a compliant way without complex timesheets and manual spreadsheets.

Today most large service organizations manage compliance within a fragmented organizational structure. This fragmented approach has led to an impeded visibility of employee’s project hours and processes that may fail to comply with various regulations.

Also, government regulations like the Fair Labor Standards Act (FLSA) require meticulous record-keeping to track activities, and extensive documentation to prove compliance. Difficulties in interpreting laws, a lack of processes, and widely varying regional requirements all combine to make compliance with labor regulations a struggle for many organizations. Between 2010-2019, US businesses paid $5.3 billion to settle wage and hour labor disputes. Of that, $731 million got paid out in 2019 alone. The cost of non-compliance is more than twice that of compliance costs. Services organizations need to stop looking at compliance as a mere function to comply with certain rules and regulations, but look beyond enforcing these rules and embedding compliance as an invisible layer within the business.

Never before has technological advancement offered more innovation and transformation opportunities for large services organizations. Intelligent technologies allow firms to grow revenue and minimize compliance burden.

Take this large IT enterprise of around 50K employees with two dozen time tracking systems, multiple ERPS, and 60+ rules engines. Within a year, they could consolidate their time tracking systems, harmonize their data governance and manage their compliance requirements from a single platform. They could also eliminate the number of home-grown regional compliance systems they were using. By harmonizing their data governance, they could consolidate their financial data and downsize a few legacy ERP systems – a big operational cost savings for their business. Integrating their time tracking to a single platform not only had a ripple effect on their overarching organization’s ecosystem which gave them global real-time visibility into their employee time. It also allowed them to reduce the number of other internal back-office systems that relied on payroll processing and interconnected to the overall ecosystem.

Inefficient Data Governance Hits Productivity

Maybe you can relate to this one firm: They have thousands of employees speaking at least a dozen languages residing in 25 different countries using over 20 different project time capture platforms that do not integrate for billing in multiple currencies. It’s not that uncommon!

As organizations are finding their unique competitive advantage, they need to track 100% of their employee time and track how their employees are spending their time, how much time was spent towards billable tasks vs. non-billable tasks, how much they should bill a client, are their projects executed on time, and budget and more.

Large enterprises that operate across geographies collect a ton of data every day across multiple time tracking systems, ERP systems, payroll systems, and reporting systems – a combination of on-premise and cloud systems. They also deal in different languages, currencies, workflows, which are integral to business operation. However, with the current point solutions and excel-driven applications, they cannot scale and meet the complex business requirements of global businesses. Without a centralized data governance model and standardizing data across the enterprise, automation of tasks becomes unachievable, and manual operational efforts increase.

More manual processes mean more errors – be it converting currencies or transferring data between systems. As you might guess, the entire process is not only cumbersome but also inefficient. Without up-to-date and accurate real-time insights, organizations miss out on data-driven decision-making opportunities. A lack of data quality and availability limits employee managers to know how their team is spending their time and can cause employees to spend a significant time on non-value-added tasks.

Thriving in a Hybrid Digital World

Today’s interconnected digital landscape is the reason for the professional services firm’s significant shift to a hybrid digital world. Organizations realize that the tightly controlled, proprietary operations they once ran don’t work anymore, and to get ahead in this new hybrid digital workplace, a connected ecosystem is crucial.

Imagine a platform that can not only save you hours on managing compliance but adapt to individual organization hierarchies and business processes while supporting all localization needs such as templates, workflows, languages, and currencies. It also helps you break down data silos and fix all the broken processes and fractured ecosystems.

Not only this, it can be deployed rapidly, leveraging scalability, with easy employee adoption and enabling you to enter new growth markets quickly. It allows your organization to monitor 100% of the employee time across projects and easily share and exchange critical project time data across multiple systems without disruption. Also, you can leverage pre-built connectors and a robust API that can plug and play with any business ecosystem and seamlessly share gross pay, costing, and billing data with existing payroll, HRMS, or ERP systems without jeopardizing the important processes already in place.

As we are marching into the hybrid digital era, forward-looking CFOs, COOs and CIOs are driving a one company, one platform initiative to harness the power of the global workforce to drive their businesses forward. After all, businesses that empower employees to work from anywhere while providing them with the technology and policies that support the environment will reap benefits in terms of more engaged and productive workers, higher employee retention, and more.

In addition, real-time visibility into projects, time, compliance, and resources will enable service organizations to accelerate their operational excellence and profitability across the organization.

Breaking down silos can spark innovation in unexpected ways for a services business. Now that remote employees have become an inevitable part of your workforce, you need a unified time tracking solution with built-in compliance and data governance to reduce operational costs and drive more profitability.

Want to understand the business case for unifying enterprise time tracking for your organization? Sign up for our Workshop customized to your organization needs.

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Shivani Bajaj


Shivani Bajaj

Shivani is an Director - Product Marketing at Deltek | Replicon. She is a technology enthusiast who loves tinkering with technology products. Deltek | Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Deltek | Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.


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