Repeat after me. Unicorns are NOT real. Unicorns are mythical creatures.
Our team had a blast at this year’s Technology & World Services Conference (TSW), where we showcased our comprehensive Professional Services Automation solution. TSW is always a great opportunity to meet, learn from, and share with the best professional services companies across the globe – and this year was no exception!
TSW provides a front row seat to the new and evolving trends shaping the professional services landscape. This year the spotlight was on how to engineer successful businesses outcomes – a hot topic in a number of workshops and keynotes. This makes sense, as:
“Professional Services’ success is dictated by your ability to pivot your business based on trends and shifting customer expectations.”
As succinctly described above, responding to the new and constantly evolving needs of your customer base will involve some abrupt changes and ongoing adjustments. Businesses that don’t keep pace will eventually find themselves scrambling to catch up.
I ultimately left the conference with three key takeaways:
RIP, Billable Hour
Long a staple of professional services engagement models, the billable hour is now slowly fading away. Ostensibly, customer preference is driving this shift in billing, but organizations should be aware they have a stake in it too. The potential to improve average revenue is limited when businesses revolve exclusively around the billable hour. A complete, holistic view of resource time expands your organization’s ability to optimize revenue and other metrics. As the world moves more towards a subscription-based economy, services organizations’ revenue is increasingly tied to outcomes. We are seeing a rise in the number of fixed-bid, milestone and value-based pricing engagements. This is driving significant changes in how PSOs think about and manage their businesses.
Of all these changes, the single most difficult is forecasting. You may be asking, forecasting what, exactly? The answer: forecasting everything. Customer engagements, fixed-bid project profitability, effort estimate accuracy, resource utilization, performance trends…everything! This is critical – when you’re only making a fixed amount, all estimates must be meticulous and precise. Similarly, referencing historical trends help you ride the curve instead of struggling to catch up. Otherwise, you’re dropping the ball on profitability, margin, and other core metrics. Accurate forecasting and positive outcomes are directly correlated. Unless you plan and forecast, you can’t execute.
A New Core Competency
Data science, machine learning, predictive analytics, and more will be entering the fold and transforming PSOs in the years to come. While these technologies are ultimately about helping you understand your business and forecast outcomes, it can be difficult to develop these new core competencies. Luckily, Replicon is here to help, and get you ahead of the curve. By providing a unified platform with a single source of truth – time – PSOs can start to build the data sets required to train forecasting tools, and be confident in their data and profitability metrics. By managing the whole, PSOs can streamline service workflows, stop revenue leakage, facilitate growth, and prepare for tomorrow.
Thanks for a great time, and see you next year!