Growth is the lifeblood of a professional services enterprise. As senior executives, revenue growth for professional services is an essential determinator of your success. Studies indicate that the revenue growth strategy that decision-makers at professional services pursue could drive 30% higher returns compared to their peers. Growth could be organic or inorganic. Organic growth relies on a company’s internal resources to increase revenue and may be slower to achieve. Inorganic growth is through mergers, acquisitions, or takeovers. On a slightly different note, some organizations take knee-jerk reactions to manage growth by considering professional services automation – PSA software is an enabler of an organizational revenue growth strategy.
What should professional services businesses do to foster growth?
Leaders must review the below dimensions frankly and honestly!
Dimension # 1: “Is our organization ready for growth”?
It is not common to find cases where the senior management has blinding faith in their revenue growth strategy! Charged by the excitement to grow, they end up creating ‘organizational chaos’, which very quickly destroys the fabric of the company and alienates employees including top performers.
Based on Paul Magill and Andrew Kelley’s Growth Readiness Framework, assessing your company’s readiness for growth involves –
- Seeing the full set of growth opportunities.
- Selecting the optimal subset of growth opportunities to pursue.
- Supporting the selected opportunities by moving talent and investment toward them at speed and scale.
- Seizing the growth opportunities through rigorous strategy choices and execution.
Further, senior leaders must be brutally honest in their capability assessment as reflected below.
In today’s digital world, the Process and Enabling Tech dimensions must be complemented by state-of-the-art PSA Software solutions that turbocharge the growth momentum.
Dimension # 2: What are the principles to achieve transformational growth!
Decision-makers must realize that achieving growth is not a random exercise; it involves a few key principles.
Some of the principles include:
- Looking past some established myths such as pursuing growth during a crisis could distract an organization from existing issues. Research by McKinsey shows that investing in growth during a downturn delivers the best results for organizations with healthy cash positions and balance sheets. Another myth is that growth transformation could be time-consuming and expensive.
- Transformational growth requires a bolder approach to goals and targets.
- Take a multi-pronged approach to drive growth rather than just a one-to-one approach.
- Ensure that the growth flows constantly – be it quick wins or big bangs!
Dimension # 3: Focus on data and digitalization.
Leaders at professional services firms must track performance that matters. Performance measurement and analysis must be real-time and proactive – driven by predictive analytics. It is common knowledge that organizations generate tons of data every single day. Unless business data is scrubbed and insights extracted, organizations risk losing their competitive standing. In this regard, organizations must take a two-pronged approach:
- Push towards 100% digitization of processes, workflows, approvals, and outcomes.
- Develop data analytics competencies with a thrust on predictive analytics. For this, companies must invest in the latest PSA tools such as a PSA Software / PSA Tools play a critical part.
Dimension # 4: Bringing the discipline of project and portfolio management.
When aspiring for growth, most professional services organizations fall into the trap of ad hoc management of the associated lines of business (portfolios) and programs & projects. It is a common observation that most organizations do not bother about the ‘discipline of program and project management’ – poorly defined workflows, non-standard processes, spreadsheet/emails/document-based management, irrelevant metrics, etc.
If leaders are serious about growth, they must invest in world-class professional services automation software solutions that drive efficiency and productivity across the board. The chosen tool must offer a holistic view of program and project management by addressing opportunities, proposals, scope, schedule, resources, costs, risks, procurement, collaboration, reporting & analytics, etc. Additionally, top-class software offers seamless systems integration with ERPs, CRMs, and Accounting applications to offer one version of business truth!
Dimension # 5: Putting a premium on execution.
“Plans are useless, but planning is essential.” – goes a management quote.
When it comes to business value, it boils to the abilities of an organization to execute. There are numerous case studies where organizations failed despite grand strategies and plans – their problem lies in their execution weakness.
Robert Kaplan and David Norton call this the “The Execution Premium.”
Flawless execution is multi-dimensional and covers –
- Application of appropriate project and program management methodologies.
- Managing scope and associated changes.
- Ensuring that the deliverables meet or exceed quality norms.
- Monitoring execution against schedule.
- Managing resource allocation and utilization.
- Effort tracking via timesheets.
- Monitoring risk triggers and initiating necessary action plans.
- Managing stakeholder engagement.
- Collaborating with external vendors for outsourced products and services.
- Revenue recognition through a milestone-based approach.
- Managing billing and cash flow.
- Controlling costs to protect project profitability.
- Incorporating lessons learned swiftly.
The differentiator for execution success between organizations largely depends on the presence of holistic PSA tools. Teams continue to rely on spreadsheets, documents, and emails as the basis of project and program execution – a clear recipe for disaster!
While most organizations struggle to execute against their plans, a small percentage of professional services companies go through it like a breeze – aided by PSA Software that is configured to the specific context and needs of the organization.
To summarize –
- Growth is the lifeblood of a professional services enterprise.
- Review if your organization ready for growth.
- Ensure that you follow the key principles to achieve transformational growth.
- Lay a strong foundation for data and digitalization.
- Foster the discipline of project and portfolio management.
- Put a premium on execution.
- Invest in a top-class professional services automation solution or PSA software.