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I n par t ner s hip w i th
TREND S TUDY
Best in class in the
professional services industry – how companies
achieve transparency,
efficiency, and growth
E ike Bieber, P rincipal Consu ltant – Finance Indust ry
August 2016
B es t -i n- class i n t h e gl obal prof es s ion al s ervices i n du st ry – h ow com pan i es ach i ev e t ran sparen cy, ef f i c ien cy , an d grow t h -
C opyri gh t C X P Grou p, 2016 2
TABLE OF CONTENTS
Introduction....................................................................................................3
2- The top priorities and challenges in professional
services ..........................................................................................................4
What are the top business priorit ies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
What are the top business chal lenges? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3- Assessing the project value chain..............................................................8
Why is an integrated v iew requi red?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
How is the pro ject value chain supported in professional serv ices com panies? . . . . . . . 9
Softw are-related aspects of im portance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4- Focus on specific areas of the project and
services business.......................................................................................... 12
Project managem ent: Agili ty and speed of reaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Profitabi lity: Transparency and granularity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Finance & accounting: Usefulness of various aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Analyt ics: Abi lity of real -t im e m anagem ent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Collaboration: Abi li ty of real -t im e m anagem ent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Managem ent : Complexity due to dem anding business conditions . . . . . . . . . . . . . . . . . . . . . . 18
Market ing: The path to segm ent of one . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Conclusion ................................................................................................... 21
About SAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
About PAC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Disclaim er, usage rights, independence, and data protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
B es t -i n- class i n t h e gl obal prof es s ion al s ervices i n du st ry – h ow com pan i es ach i ev e t ran sparen cy, ef f i c ien cy , an d grow t h -
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INTRODUCTION
I n the light of digita liza t ion and changing market cond it ions, v irtua lly
ev ery enterp rise is facing intensify ing compet it ion and considerab le
business changes. P rofessiona l serv ices companies a re part of th is
dev elopment . They see their businesses being massiv ely a ffected by
changing customer p references and the need to respond to these
changes rap id ly. In a peop le-centric and rather unstab le business
env ironment, agility has become the key to success and further
grow th. At the same t ime, serv ices firms a re facing p ressure on p rices
as customers hav e become tough negot iators in t imes of increasing
p ricing t ransparency and globa l serv ice av ailab ility. P rofitab le
business takes center stage, and to achiev e th is, p rofessiona l serv ices
companies require a robust business model that p rov ides the right
v alue p roposit ion, offering, and capab ilit ies to the right customer at
the right t ime and p lace.
I n answer to these cha llenges, p rofessiona l serv ices companies hav e
their eye on technology and how it can support their business.
Making use of the technologica l possib il it ies means seiz ing the
opportun ity to increase efficiency, t ransparency, and growth. The
t rend study a t hand examines the relat ion between the dep loyment
of appropriate technology and greater success in the p rofessiona l
serv ices business.
To assess th is top ic, PAC recent ly conducted a surv ey of 300
p rofessiona l serv ices companies. PAC conducted roughly ha lf the
interv iews w ith I T managers (45%), and the other half w ith C- lev el
managers and decision makers from other business a reas (55%).
Fig. 1: Basic surv ey data
The surv ey sought insights from d ifferent sub - indust ries includ ing
management, business, IT and tax consu lt ing, aud it ing, account and
lega l serv ices, market research, marketing and adv ert ising, research
and dev elopment, a rch itecture, engineering, and const ruct ion , as
well a s rent ing, ma intenance and repair. The companies included in
the surv ey w ere recru ited a round the glob e and belong to the
segment of small and mid-sized firms (each w ith a minimum of 100
and a maximum of 1,000 employees).
Survey conducted in June 2016
JUNE
people surveyed from around the globe
300
From
professional
services JU AY
100 to 1,000 employees
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2- THE TOP PRIORITIES AND
CHALLENGES IN
PROFESSIONAL SERVICES
WHAT ARE THE TOP BUSINESS PRIORITIES?
Surv ey respondents were asked to take into considerat ion selected
business top ics and to ev aluate the p riority that they a ttach to each
of them. The resu lt s rev eal that p rofessiona l serv ices companies hav e
a v ariety of top ics on top of their agenda, w hile none of the top ics
clearly stood above the others.
When we only consider the aspects to which companies attach the
h ighest p riority, the need to grow business with ex ist ing and new
clients stood out (with 66% of respondents confirming th is a s the
h ighest p riority). In the course of th is quest ion, it became ev ident that
th is is, in many cases, d riv en by the a im of expand ing into new
serv ice a reas a nd further geographies. How ev er, an equa lly st rong
focus lies on enhancing the ir ex ist ing work. The clear ma jority of
respondents a re eager to improv e current serv ice deliv ery, support,
and sa les. Virtua lly ev ery p rofessiona l serv ices company is a iming to
improv e it s ability to acquire, retain, and dev elop the right talent .
Fig. 2: Topics considered a priority by professional serv ices firms
Key business priorities for the years to come
high priority some priority
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52%
66%
57%
52%
40%
35%
43%
28%
36%
39%
45%
43%
Enhance service delivery and support
Grow business with existing and new clients
Improve the ability to acquire, retain, and develop the right talent
Enhance sales
Expand business into new service areas
Expand business in new geographies
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Considering the med ium to h igh relev ance of these top ics, w e get a
first idea on how important technology is for p ro fessiona l serv ices
companies. All of these aspects reflect the need for adv ancements in
a reas such as process automation, CRM, analytics , and scalability.
WHAT ARE THE TOP BUSINESS CHALLENGES?
Chal lenges related to business processes
We first consider requirements related to business p rocesses. I n t imes
of d igitalizat ion and a grow ing need to fu lfi l l v ery ind iv idual customer
demands, p rofessiona l serv ices companies a ttach h igh p riority to the
enhancement of p rocesses, a s surv ey respondents confirmed. The
ma in focus lies on the enhancement of p rocess efficiency : More than
one th ird of the companies (38%) consider th is to be a b ig cha llenge,
while more than ha lf of the respondents say that it is a moderate
cha llenge (54%). How ev er, the need to enhance p rocess qua lity and
t ransparency is a lmost of equal importance.
Fig. 3: Process-related challenges of professional serv ices firms
Strategic chal lenges
From a st rategic perspect iv e, business growth is an important
cha llenge for v irtually ev ery p rofessiona l serv ices firm, as cited by
ov er 90% of respondents. W ith 40% confirmat ion, the reduct ion of
costs is the ov errid ing cha llenge. The message is clea r: Firms a re
seeking p rofitab le growth. Customer centricity is taking center stage
in p rofessiona l serv ices today and , accord ing to the surv ey resu lt s,
about one th ird of companies a re act iv ely p riorit iz ing the
improv ement of CRM.
Required enhancements with regard to business processes
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big challenge moderate challenge no challenge
29%
60%
11%
Enhance quality
23%
56%
20%
Enhance transparency
38%
54%
9%
Enhance efficiency
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Fig. 4: Key strategic challenges of professional serv ices firms
Tactical chal lenges
With regard to business operat ion s, the most p ressing cha llenge is
related to sta ff p roduct iv ity and mot iv at ion and, a lmost equa lly
important , the need to react to ev er-changing market condit ions and
customer requirements in an appropriate manner. The lat ter st rongly
depends on the employees, of course, so the h igh percentage figure
is not surp rising.
Business decision -making, collaborat ion, and managing risk,
compliance a nd cash flow s a re a lso considered to be cha llenging by
the clear ma jority of surv ey respondents, a lthough the percentage
ind icating them as a b ig cha llenge is sl ight ly low er (each less than
one th ird ).
Key challenges – strategic aspects
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big challenge moderate challenge
33%
40%
34%
26%
59%
52%
55%
61%
Create a stronger backbone for future growth and to control growth
Reduce costs
Improve customer relationship management and customer retention
Better react to ups and downs in business
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Fig. 5: Key tactical challenges of professional serv ices firms
The surv ey resu lt s suggest that p rofessional serv ices companies a re
p lanning to inv est in adv anced ana lyt ics, collaboration technology,
and in the automat ion and d igita lizat ion of back-end p rocesses.
Technology is a v ita l element that enab les p rofitab le business with in
p rofessiona l serv ices. The comprehensiv e set of st rategic, tact ica l,
and operat iona l cha llenges, as w ell a s their interdependencies,
testify to the fact that business and IT need to work closely together
in order to succeed.
Key challenges – tactical aspects
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38%
37%
28%
32%
26%
24%
55%
54%
60%
56%
62%
56%
Increase employee productivity and motivation
Better react to changing market conditions and customer demands
Enhance business decision-making
Enhance collaboration of employees to manage projects
Increase efficiency in managing business risks and compliance
Enhance cash flow management
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3- ASSESSING THE PROJECT
VALUE CHAIN
WHY IS AN INTEGRATED VIEW REQUIRED?
Back in the 1980s, M ichael E. Porter dev eloped the concept of the
v alue cha in, and sta ted that ev ery act iv ity with in the v alue cha in
can be a d ifferent ia tor and the u lt imate reason why a customer buys
a p roduct or serv ice. The v alue cha in concept can be app lied to
p rojects and can be used to rev iew the compet it iv e adv antage that
a company offers w hen deliv ering projects or serv ices.
We can therefore say that the p roject v alue cha in frames the
p rofessiona l serv ices business. Each p roject or serv ice engagement
sta rt s with the generat ion of a lead and the creat ion of an
opportun ity, and cont inues by the p reparat ion of a quote and a
p roject p lan. After order ent ry, the p roject or serv ice is executed,
based on a more deta iled p roject p lan that a llows the company to
record effort s and expenses as w ell a s document and report
milestones, etc. The p roject serv ice v alue cha in end s w ith b ill ing the
p roject or serv ice engagement, or it re- sta rt s by up -selling or cross-
sell ing to the client .
Fig. 6: Example of the project v alue chain
Accord ing to Porter, ev ery bu ild ing b lock in the p roject (or serv ice)
v alue cha in creates v alue and can be the decisiv e factor behind the
select ion of a serv ice prov ider.
Oppor-tunity
Project proposal and plan
Order Execution
Billing
Lead generation
Project value
chain
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Now , in the d igita l age, th e concept is st i l l v alid but it needs to be
expanded . Apart from d ifferent ia t ing bu ild ing b locks, companies can
create a compet it iv e adv antage by th inking across the bu ild ing
b locks of the p roject v alue chain and by integrat ing them. In t imes of
t ransparency and ‘me-too’, a more holist ic approach can make the
d ifference.
I n order to assess the current state, w e asked the surv ey part icipants to
est imate the lev el of integrat ion of the p roject v alue chain that has been
reached in their company. 65% of respondents say that integrat ion is
current ly low (i.e. an integrat ion lev el below 50%), while 35% consider it to
be h igh ( i.e. an integrat ion lev el h igher than 50%). I nterest ingly, on ly one
respondent rep lied that the p roject v alue cha in was 100% integrated ,
while 10% sa id it was betw een 0% and 10%, which ind icates a v ery low
integrat ion lev el.
We can therefore conclude that there is room for improv ement w ith
regard to the integrat ion of the p roject v alue cha in and that many
p rofessiona l serv ices companies a re obv iously st i l l miss ing out on the
compet it iv e edge that a h igh integration lev el delivers.
I n the follow ing chapters, w e out line why an integrated v iew is
required and how it helps p rofessiona l serv ices companies to
succeed. M oreov er, w e exp lore selected bu ild ing b locks in the
p roject v alue cha in more deep ly to uncov er the requirements and
potent ial a reas of improv ement.
HOW IS THE PROJECT VALUE CHAIN SUPPORTED IN
PROFESSIONAL SERVICES COMPANIES?
An integrated v iew of the p roject v alue cha in helps p rofessiona l
serv ices companies to stay compet itiv e. Two examples:
I ntegrat ion enhances transparency because it , for instance,
enab les companies to figure out qu ickly which p rojects a re
running according to p lan. Cou ntermeasures can be taken
rap id ly in the ev ent of dev iat ions. When ca lcu lat ing a quote, an
integrated v iew helps the sa lesperson to figure out whether
former p rojects w ith the client were p rofitable or not , and why.
An integrated v iew of the d ifferent build ing b locks a lso fosters
efficiency. Based on a linkage betw een the d ifferent p rocess
phases, it becomes easier to p red ict the demand for resources,
which helps to av oid bott lenecks and the need to recru it externa l
sta ff for specific p roject tasks.
After ga in ing cla rity on the est imated integration lev els, w e w ere
keen to discov er how the p roject v alue cha in is organized and
supported in p rofessional serv ices companies.
39% is the av erage
integration level
as estimated by
the respondents
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Fig. 7: Different possibilities for supporting the project value chain
There is l itt le surp rise in find ing that the ma jority of p rofessiona l
serv ices companies (66%) today use v arious non-integrated
app licat ions to support the p roject v alue cha in. Only 15% hav e their
systems integrated and those companies stated that they hav e
reached h igh integrat ion lev els w ith regard to their p roject v alue
cha in. 19% use one business app licat ion or system, which can be an
ERP system, but could a lso be Excel.
98% of the survey respondents confirmed
that Excel is in use to support at least
some part of the project value chain
Ex cel is in widesp read use ( i.e. the lev el of Ex cel use is h igher than
50%) in 62% of the p rofessiona l serv ices firms, but on ly a few depend
solely on Ex cel (16% sta ted a lev el of Ex cel use h igher than 90%). The
surv ey clearly confirms that Ex cel is st i l l an important tool for
organiz ing business, and this is pa rticularly t ru e for sma ller companies.
SOFTWARE-RELATED ASPECTS OF IMPORTANCE
The app licat ion landscape p lays a key role in today’s p rofessiona l
serv ices business. La rge parts of the business depend on it today. The
clear ma jority of the surv ey respondents attached h igh or some
relev ance to being ab le to enhance or expand the ex ist ing systems
as well a s to p rov ide mob ile support for business p rocesses and
funct ions. These answ ers reflect great interest in adv anced
app licat ions that p rov ide flex ib il ity and the possib il ity to respond to
specific needs, which can be a way to d ifferent iate from
competitors. The av ailab ility of cloud solutions and of usage-based
Organization of the project value chain
© PAC - a CXP Group Company, 2016
one business application or system
various integrated systems
various systems that are not integrated
66% The project value chain is covered and supported by...
15% 19%
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payment models is on ly slight ly less relev ant. The h ighest p riority,
how ev er, is at tached to fast and easy imp lementat ion , which
underlines the fact that p rofessiona l serv ices companies a re h igh ly
caut ious and cost sensitiv e when it comes to I T investments.
Fig. 8: Relev ance of software-related topics
Relevance of selected software-related topics
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39%
26%
18%
29%
25%
14%
51%
57%
63%
51%
52%
57%
Fast and easy implementation
Extensions: the flexibility of adding business capabilities in existing system(s)
Enhancements: the availability of add-ons to enhance the existing system(s)
Mobile support of business processes and mobile access to business functions
Software as a service/SaaS
Payment per use
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4- FOCUS ON SPECIFIC AREAS
OF THE PROJECT AND
SERVICES BUSINESS
PROJECT MANAGEMENT: AGILITY AND SPEED OF
REACTION
Most p rofessiona l serv ices firms recognize the importance of p roject
management . Consistent ly and p roperly app lied, it helps to control
spend ing and improv e p roject resu lt s. The p rojec t management
d iscip line can make business more efficient , sa t isfy customers,
emp loyees, and other stakeholders, and lead to a competit iv e
adv antage as a resu lt.
Consistent and p roper p roject management imp lies that a ll relev ant
p roject- and customer- rela ted informat ion is at hand on a v ery
granula r lev el whenev er it is needed. Only then is it possib le to
measure the v alue of a single specific p roject . Howev er, in the
majority of p rofessiona l serv ices companies, today’s system
landscape does not comply w ith this requirement. Only a quarter of
surv ey respondents sta ted that they could check the p rofitab ility of a
p roject w ith min ima l effort a t any t ime. Roughly a th ird of the
companies (31%) admit that th is – in theory – rather simp le
requirement is solv ed ineffect iv ely . That p robab ly includes sev era l
companies that cannot reliab ly check the p rofitab ility of a p roject at
a ll.
Fig. 9: Lev el of effectiv eness with regard to project management tasks
31% 44% check the profitability of single projects any time at the push
of a button?
How effectively do professional services companies…
Evaluation on a scale from 1 for not effectively at all to 10 for very effectively
semi-efficient scale 4-7
25%
efficient scale 8-10
not efficient scale 1-3
35% 49% respond almost immediately
when a project runs into trouble? 15%
Average rating
5.2
respond rapidly to a change in customer demands? 36% 53% 11%
4.6
4.2
© PAC - a CXP Group Company, 2016
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I t is not surp rising that ev en fewer p rofessional serv ices companies
feel that they a re ab le to respond quickly to changes in an efficient
way. Changes can either be p roject- related (e.g. p roject no longer
on t ime or on budget) or customer- related (e.g. an ad-hoc change
request during the p roject). In these cases, action that is obv iously
more cha llenging than simply rev iew ing a status, such as checking
p rofitab ility, is required.
PROFITABILITY: TRANSPARENCY AND GRANULARITY
P red ict ing costs and effort s for a serv ice or p roject is demand ing for
p rofessiona l serv ices companies because the est imat ion of w orkloads
and tasks is more complex when peop le a re inv olv ed and the lev el of
manua l w ork is h igh. Consequent ly, hav ing cla rity on p rofitab ility is a
ma jor concern for p rofessional serv ices companies, which is why we
hav e analyzed this topic in more detail.
We asked surv ey respondents to rate the importance of hav ing a h igh
lev el of t ransparency with regard to p rofitab ility in v arious
d imensions. Surv ey resu lt s underline that p rofessiona l serv ices
companies require h igh cla rity and p recision w ith regard to
p rofitability in genera l. All d imensions were rated as ‘highly ’ or
‘somewhat ’ important by a clear ma jority of surv ey respondents.
Hav ing a clear v iew on p rofitab ility by p rojects rec eiv ed the h ighest
sha re of confirmat ion as being h igh ly important . Know ing the
p rofitability by region is relev ant for few er respondents as it st rongly
depends on whether p rofessiona l serv ices companies a re doing
business locally or internationa lly.
Fig. 10: Relev ance of transparency with regard to profitability information
Relevance of transparency with regard to profitability
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42%
50%
41%
42%
31%
30%
48%
40%
48%
46%
53%
45%
Profitability by customers
Profitability by projects
Profitability by business units
Profitability by particular offerings or services
Profitability by employee
Profitability by regions
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Hav ing h igh t ransparency on p rofitab ility and being ab le to measure
th is on a h igh lev el of granula rity requires a h igh lev el of integrat ion
w ith regard to data and systems. P rofessiona l se rv ices companies
hav e room for improv ement here. At the moment, on ly a sma ll
percentage of surv ey respondents (16%) state t hat they can ret riev e
information on p rofitab ility in rea l t ime and w ith a h igh lev el of
automat ion. For most companies, more effort is required as they a re
either receiv ing the informat ion dynamica lly (31%) or manua lly (49%).
I t becomes clear that there is st il l a w ide gap between the opt ima l
sta te (i.e. hav ing h igh t ransparency on p rofitab ility in v arious
d imensions) and the rea l situat ion (i.e. how p rofitab ility in format ion is
actua lly ret rieved).
Fig. 11: Current status of the retriev al of profitability information
Current retrieval of profitability information
© PAC - a CXP Group Company, 2016
in real time and highly automated
manually dynamically
Today, information on profitability is received…
49%
Please note that 4% of respondents stated that they did not know
31% 16%
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C opyri gh t C X P Grou p, 2016 15
FINANCE & ACCOUNTING: USEFULNESS OF VARIOUS
ASPECTS
Surv ey respondents w ere asked to ev aluate the usefu lness of v arious
aspects that a re relev ant for the finance and account ing
department, and for the genera l management of a p rofessiona l
serv ices firm. The resu lt s show that each p re-selected aspect was
ra ted ‘v ery usefu l’ by the ma jority of respondents, while none of the
top ics clearly stood abov e the others.
The av ailab ility of deta iled informat ion and t ransparency on the
ut il izat ion of employees was giv en the h ighest percentage of rat ings
as being v ery usefu l (63%). Howev er, other aspects such as receiv ing
cost- related informat ion instant ly or being able to close the books
qu ickly w ere rated as v ery useful by almost as many respondents.
Fig. 12: Rating of usefulness of selected aspects for finance and accounting
2016
Usefulness of various aspects for finance and accounting
63%
61%
56%
53%
51%
52%
A high transparency level with regard to bench times of employees
Detailed information and transparency about the utilization of employees
A short timeframe for closing a quarter or a year’s end
Retrieving project-related cost allocation at the push of a button
Instant control of project- or customer-related KPIs
Easy and integrated recruitment and sourcing of external staff
Retrieving the number of unbilled days at the push of a button
A high transparency level with regard to the company’s liquidity situation
An integrated view of intercompany relations
57%
56%
56%
Would be very useful
© PAC - a CXP Group Company, 2016
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C opyri gh t C X P Grou p, 2016 16
ANALYTICS: ABILITY OF REAL-TIME MANAGEM ENT
Aspects such as the ones described abov e require adv anced
ana lyt ics. I f companies a re a iming to ret riev e up- to-date informat ion
to support decision-making ‘at the push of a button’ , it shou ld idea lly
be av ailab le in rea l t ime. We asked the surv ey respondents whether
their ana lyt ics systems a llow for rea l- t ime management of the p roject
v alue cha in and if yes, whether that cov ers the whole p roject v alue
cha in or on ly parts of it .
The resu lt ind icates that rea l- t ime ana lyt ics has rea ched a certa in
lev el of maturity in p rofessiona l serv ices firms. The clear ma jority of
these companies hav e the ab ility to ana lyze and manage at least
some components of the p roject v alue chain in rea l t ime.
84% of survey respondents confirmed
that real-time analytics is available for a
few, many, or all components of the
project value chain
Howev er, the ab ility to manage the ent ire p roject v alue cha in based
on rea l- t ime data is st i l l fa r from being standard (7%). A h igh
percentage of respondent s cannot do this in rea l t ime at a ll (13%),
w ith an add it iona l 3% who d id not know the answer to th is quest ion . It
therefore seems as if there ex ist s a solid basis for rea l- t ime
management that p rofessional serv ices firms can expand further.
Fig. 13: Current av ailability of analytics that allows real-time management
Current status of real-time analytics
© P
AC
- a
CX
P G
rou
p C
om
pa
ny,
20
16
How many components of the project value chain can be analyzed in real-time today?
all components 7%
most components
22%
a few components
55%
no components 13%
I don't know 3%
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C opyri gh t C X P Grou p, 2016 17
COLLABORATION: ABILITY OF REAL-TIME
MANAGEMENT
Know ledge work – which is a t the core of p rofessiona l serv ices
deliv ery – requires collaborat iv e w orking env ironments. Th is is of
part icula r importance in times of d igita l t ransformat ion , w ith rout ine
act iv it ies becoming increasingly automated and the t ime spent by
employees on complex tasks and in d ist ributed teams increasing.
Consequent ly, technica l collaborat ion p lat forms or tools a re needed
as a foundat ion that fosters teamwork and knowledge ex change.
Aga in, the surv ey underlines that p rofessiona l serv ices companies
a round the w orld hav e reached a certa in maturity lev el w ith regard
to collaborat ion technology. The clear ma jority of surv ey respondents
(82%) confirm that collaborat ion p la t forms or tools a re av ailab le and
in use. These tools and p la t forms a re fu lly integrated into the ex ist ing
system landscape in on ly a round a quarter of the companies (26%).
So aga in, we see enhancement potent ia l a s a solid and integrated
technica l framework that could fu rther increase the p roduct iv ity of
emp loyees – and most p robably their sat isfaction, too.
Fig. 14: Current status of collaboration technology
Current landscape of collaboration technology
© PAC - a CXP Group Company, 2016
have integrated collaboration platforms
or tools in use
do not have collaboration platforms
or tools in use
have non-integrated collaboration platforms or
tools in use
56% Are technical collaboration platforms or tools in use and are they integrated?
26% 18%
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MANAGEMENT: COMPLEXITY DUE TO DEMANDING
BUSINESS CONDITIONS
Some add it iona l surv ey quest ions w ere closely linked to the top ic of
collaborat ion. We asked respondents under which circumstances
they accomplish their p rofessional serv ices business today.
In ternal s taff on ly, or in combination wi th external support?
We first a sked whether companies need interna l sta ff on ly or externa l
cont racted sta ff to execute a p roject or serv ice. We a lso wanted to
know whether physica l goods (e.g. repa ir pa rts) need to be managed
or consumed in order to carry out p rojects or to deliv er serv ices.
62% of the professional services
companies include external contracted staff and 58% use some kind of physical
goods to execute a project or service
The fact that the ma jority of companies not on ly w ork with interna l
emp loyees but a lso hav e to manage externa l peop le and physica l
goods in add it ion to their own peop le underlines the high lev el of
complex ity many p rofessiona l serv ices ex ecut iv es a re facing today.
The shortage of specific skil ls on ly add s to th is. Th is a lso confirms that
integrated technica l collaborat ion p lat forms or tools w ould help to
rea lize p rojects or serv ices efficiently and smooth ly.
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Is business done in di fferent locations?
Surv ey respondents were a lso asked whether their company is doing
business in a d ist ributed env i ronment due to nationa lly or
internationally d ist ributed locations, b ranches , or subsidiaries.
63% of the professional services
companies work in a nationally distributed environment and 43% operate
internationally
Th is aga in adds to the complex ity of the business in the ma jority of
p rofessiona l serv ices companies and of managing th is business. Apart
from collaborat ion techniques, aspects of importa nce include mult i
capab ilit ies as well a s ease of imp lementat ion and ease of use in
order to support smooth business across a d ist ributed business
env ironment. Sca lab ility might be another relev ant aspect , in
part icula r for the (approx imately) 40% of respondents who confirmed
that their company is p lanning to expand (furthe r) internat ionally.
Is travel requ ired to del iver projects or services?
Last but not least , w e wanted to know whether employees in the
p rofessiona l serv ices companies included in the surv ey need to t rav el
for their jobs or not . I t is a lmost needless to say that – in add it ion to
st rong management – a w orkforce that is t rav ellin g on a regula r basis
requires reliab le collaborat ion tools, easy- to-use a ids to manage
t rav el expenses or routes, and most p robab ly mobile support of key
business p rocesses and funct ions.
MARKETING: THE PATH TO SEGMENT OF ONE
The top ic of d igita lizat ion is certa in ly not new to most market ing and
communicat ion experts and the p rofessiona l serv ices indust ry has
been part icu la rly qu ick to adopt d igita l techniques such as e-ma il
market ing to reach customers and to adv erti se their offering. Th is has
been part icu la rly help fu l because p rofessiona l serv ices cannot usua lly
p resent hapt ic products or materials to their customers.
Howev er, in these ‘a lways on’ t imes, customer requirements a re
changing and customer centricity goes a long w ith h igher
ind iv idua lizat ion lev els in all a reas – market ing and communicat ion
included. Market ing is a t it s best when a customer feels addressed in
a persona l and ind iv idua l manner. The era of segment-of-one
market ing has just begun, which requires good content , good data
94% of respondents
said that much or
some travelling is
needed for
executing projects
or serv ices.
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insights, and h igh market ing automat ion lev els in order to manage
the d iv ersity in an efficient way.
We asked surv ey respondents to giv e an est imate of the ir company’s
current market ing performance and capab ilit ies. The resu lt s giv e a
mixed p icture. About ha lf of the respondents (52%) consider their
market ing capab ilit ies and performance sa t isfactory but not
outstand ing. Almost 40% seem to be more sat isfied w ith the w ork that
their market ing and communicat ion department or agency is doing.
From an outside perspect iv e, howev er, the result s imp ly that on ly 7%
achiev e exceptiona l resu lt s in market ing and communicat ion. In
t imes of ev er- increasing competit ion, p rofessiona l serv ices companies
should be interested in becoming the ‘best in class’ in market ing and
communicat ions, especia lly in light of the ex cellent p rogress that has
been made recent ly with regard to the av ailab ility and funct iona lity
of tools to support the marketing d iscipline.
Fig. 15: Current status of marketing capabilities and performance
Current marketing capabilities and performance
highly advanced
52% 9%
© PAC - a CXP Group Company, 2016
advanced immature
7% 31%
advanced average immature
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CONCLUSION
The surv ey of 300 decision-makers from sma ll and mid-sized
p rofessiona l serv ices firms a round the globe rev ea led that the
ma jority of indust ry p layers hav e the ambit ion of grow ing and further
dev elop ing their businesses. On av erage, they attach the h ighest
p riority to the enhancement of serv ice deliv ery and to the support
and grow th of business, both w ith ex isting clients and new ones.
At the same t ime, the surv ey showed that p rofessiona l serv ices
companies a re aware of the cha llenges that lie ah ead of them. The
creat ion of a st ronger foundat ion for growth and gov ernance and
the improv ement of customer rela t ionsh ip management and
retent ion a re considered to be ma jor cha llenges in t imes of tough
competit ion, demand ing customers, and v ola t ile market cond itions.
Enhancements to business p rocesses – includ ing better efficiency,
qua lity , and t ransparency – a re of equa l importance to p rofessiona l
serv ices companies.
These aspects appear to be closely linked to the technologica l
foundat ion of the business. How ev er, while I T inv estments might help
solv e the most p ressing issues, the reduct ion of costs is considered to
be another ma jor cha llenge. Th is might make companies seek
solut ions that require limited upfront inv estments (e.g. cloud solut ions
that a re calculated on the basis of usage).
On the one hand , the ana lysis rev ealed h igh sensit iv ity among
p rofessiona l serv ices companies w ith regard to the v alue that an
integrated v iew of the p roject v alue cha in, adv anced market ing, or
ana lyt ics can b ring to business. On the other hand, how ev er, the
surv ey exposed sign ificant room for improv ement, and it seems as if
most decision -makers who answered the surv ey quest ions hav e
recognized and acknow ledged the sub-opt ima l or ev en crit ica l
a reas.
I n th is su rv ey, w e d id not specifica lly ask for IT - related inv estment
p riorit ies because a reliab le assessment w ould hav e been d ifficu lt
since business and IT decision-makers from d ifferent a reas w ere
inv ited to take part in the surv ey, and a ll these hav e d ifferent
interp retat ions and limited v iews on IT - rela ted aspects as fa r as our
experience shows. How ev er, the surv ey resu lt s clea rly suggest that
p rofessiona l serv ices companies a re aware of the p rogress that could
be mad e in business w ith the right technology to hand.
What does th is mean? There is, of course, no officia l defin it ion of
what the right technology foundat ion is for p rofessiona l serv ices
companies. Accord ing to the surv ey, how ev er, sev era l characterist ics
receiv ed common approv al, includ ing b road funct iona lity and h igh
integrat ion lev els in combinat ion with the ab ility to enab le agility,
flex ib il ity , and speed.
B es t -i n- class i n t h e gl obal prof es s ion al s ervices i n du st ry – h ow com pan i es ach i ev e t ran sparen cy, ef f i c ien cy , an d grow t h -
C opyri gh t C X P Grou p, 2016 22
TABLE OF FIGURES
Fig. 1: Basic surv ey data ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Fig. 2: Top ics considered a p riority by p rofessiona l serv ices firms ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fig. 3: P rocess- rela ted cha llenges of p rofessiona l serv ices firms.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Fig. 4: Key st rategic cha llenges of p rofessiona l serv ices firms ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fig. 5: Key tact ica l cha llenges of p rofessiona l serv ices firms.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Fig. 6: Ex ample of the p roject v alue cha in ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fig. 7: Different possib il it ies for support ing the p roject v alue cha in ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Fig. 8: Relev ance of software- related top ics .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fig. 9: Lev el of effect iv eness with regard to p roject management
tasks .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Fig. 10: Relev ance of t ransparency with regard to profitability in formation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fig. 11: Current sta tus of the ret riev al of p rofitab ility in format ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fig. 12: Rat ing of usefu lness of selected aspects for finance and account ing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Fig. 13: Current av ailability of analyt ics that a llows rea l -time management ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Fig. 14: Current sta tus of collaborat ion technology ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fig. 15: Current sta tus of market ing capab ilit ies and performance.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
B es t -i n- class i n t h e gl obal prof es s ion al s ervices i n du st ry – h ow com pan i es ach i ev e t ran sparen cy, ef f i c ien cy , an d grow t h -
C opyri gh t C X P Grou p, 2016 23
ABOUT SAP
As market leader in enterp rise app licat ion software, SAP (NYSE: SAP)
helps companies of a ll sizes and indust ries run better. From back
office to board room, warehouse to storefront , desktop to mob ile
dev ice — SAP empowers peop le and organizat ions to w ork together
more efficient ly and use business in sight more effect iv ely to stay
ahead of the compet it ion. SAP app licat ions and serv ices enab le
approx imately 320,000 business and pub lic sector customers to
operate p rofitably, adapt cont inuously, and grow susta inably.
Web site: www.sap.com
SAP SE - Walldorf
Dietmar-Hopp-Allee 16
69190 Walldorf Germany
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C opyri gh t C X P Grou p, 2016 24
ABOUT PAC
Founded in 1976, P ierre Audoin Consu ltants (PAC) is pa rt of CXP
Group, the lead ing independent European research and consu lt ing
firm for the softw are, I T serv ices and d igital t ransformation industry.
CXP Group offers it s customers comprehensiv e support serv ices for
the ev aluat ion, select ion and opt imiza tion of their software solut ions
and for the ev aluat ion and select ion of IT serv ices p rov iders, and
accompanies them in opt imiz ing their sourcing and inv estment
st ra tegies. As such, CXP Group supports ICT decision makers in their
d igita l t ransformation journey.
Further, CXP Group assist s software and IT serv ices p rov iders in
opt imiz ing their st ra tegies and go- to-market approaches w ith
quant itat iv e and qua lita t iv e ana lyses as well a s consu lt ing serv ices.
Pub lic organizat ions and inst itutions equa lly base the dev elopment of
their I T policies on our reports.
Cap ita liz ing on 40 years of experience, based in 8 countries (with 17
offices w orldwide) and with 140 employees, CXP Group p rov ides it s
expert ise ev ery year to more than 1,500 ICT decision makers and the
operat iona l d iv isions of la rge enterp rises as well as mid-market
companies and their p rov iders. CXP Group consist s of three b ranches:
Le CXP , BARC (Business App licat ion Research Center) and P ierre
Audoin Consu ltants (PAC).
For more informat ion p lease v isit: www.pac-online.com
PAC’s la test news: www.pac-online.com/blog
Follow us on Tw itter: @PAC_Consultants
PA C - CXP Gr oup
Ho l z s t r . 26
80469 M unich, Ger many
Te l . : + 49 ( 0) 89 23 23 68 0
Fax : + 49 ( 0) 89 71 96 265
info -ger many @pac-onl ine . com
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DISCLAIMER, USAGE RIGHTS,
INDEPENDENCE, AND DATA PROTECTION
The creat ion and d ist ribution of th is study w as commissioned by SAP.
For more informat ion, p lea se v isit www.pac-online.com.
Disclaimer
The contents of th is study were compiled w ith the greatest possib le
care. Howev er, no liab ility for their accuracy can be assumed.
Ana lyses and ev aluat ions reflect the state of our know ledge in Ju ly
2016 and may change at any t ime. Th is app lies in part icu la r, but not
exclusiv ely, to statements made about the future. Names and
designat ions that appear in th is study may be registered t rademarks.
Usage r ights
Th is study is p rotected by copyright . Any rep roduct ion or
d isseminat ion to th ird part ies, includ ing in part , requires the p rior
exp licit authoriza t ion of SAP as commissioner . The pub licat ion or
d isseminat ion of tab les, graphics etc. in other pub licat ions a lso
requires p rior authorizat ion.
Independence and data protection
Th is study was p roduced by P ierre Audoin Consultants (PAC) w ithout
in fluence from SAP as the commissioner of the study.
The part icipants in the study w ere assured that the informat ion they
p rov ided would be t reated confident ia lly. No statement enab les
conclusions to be d rawn about ind iv idua l companies, and no
ind iv idua l surv ey data was passed to the commissioner or other th ird
part ies. All pa rt icipants in the study were selected at random. There is
no connect ion between the p roduction of the study and any
commercia l relat ionsh ip between the respondents and the sponsors
of th is study.
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