Workday Global Study: Professional Services Leaders Say Digital Transformation Is Key to Resilience

The 2020s have been a time of uncertainty and upheaval. From COVID-19 and remote work to a global skills shortage and potential economic headwinds, professional services firms have navigated unprecedented change over the past three years. As a result, leaders must ensure their business models and financial plans are poised to deliver a new level of agility to navigate this change.

“We hear firms saying it’s more important now than ever to have a good handle on your business,” says Patrice Cappello, global head of professional services industry strategy at Workday. “Because we don’t know what might happen, we have to plan for every eventuality.”

However, “Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” Workday’s global survey of 1,150 senior business executives, found that only 38% of professional services leaders say their organization is digitally well equipped to ensure business continuity in times of crisis.

Perhaps even more concerning, only 29% say they’re confident in their organization’s current financial and business plans or their future digital transformation plans. This compares to 40% and 45% of all leaders, respectively.

What’s causing this crisis of confidence? A lack of visibility across the organization. Almost 2 in 3 (62%) professional services leaders say their inability to connect operational, people, and financial data to business outcomes impairs the organization’s agility.

“You can’t make big decisions to adjust to external pressures if you don’t know what areas of the business are most impacted,” says Cappello.

Many leaders are adapting the way they plan for the future, as they see both the supply of skilled talent and the demand for services continuing to flux. To avoid overextending themselves in a tight market, they need to make strategic decisions about the services they offer.

Using Tech to Inform Real-Time Decision-Making

How can leaders get the information they need to make more confident decisions? The first step is creating a single source of truth for the entire organization.

“Many firms that haven’t gone through digital transformation will tell you that the first half of most executive meetings is spent arguing about who has the right set of data,” says Cappello.

To become more resilient and responsive in a rapidly changing landscape, leaders know they need an integrated system that will give them an accurate, up-to-date view of data from across the business. In fact, professional services leaders say the most important tool to help them make real-time decisions is technology to unify financials, people, and operations.

When a firm’s data is accessible within a single system, leaders can assess whether they have the needed resources to handle different scenarios in the near and mid-term. Each possible change in the business landscape—whether a global economic downturn or a sudden demand surge for a specific service line—would have its own domino effect.

Understanding how both talent and funding would need to be redistributed across the firm in different scenarios lets leaders plan for how they can hit revenue targets regardless of what the future might bring, says Justin Joseph, senior director of product strategy for the professional services industries at Workday.

“If you have a better handle on who your people are, what skills they have, and what skills you need to generate the revenue that you’re planning for, that helps a lot,” he says. “The interconnectivity here is critical.”

However, more than half (55%) of professional services leaders say their organization’s data is somewhat or completely siloed. And only 27% are confident in the agility of their organization’s current technology, compared to 42% of all leaders.

“People who have started the transformation journey prior to all this disruption feel they are in a much better place,” says Cappello.

Looking to the future, professional services leaders understand that digitalization is now a fundamental expectation, even if many firms are still working to get there. More than half (53%) say investing in technology to better integrate data between disparate systems is their top priority for finance teams to meet evolving business needs. This was ranked significantly higher than any other finance investment.

“Most of our industry has been hamstrung by technology forever,” says Cappello. “They’ve had to run their services business on software that was designed for distributors or manufacturers. But today they have an entirely different set of options.”

Tapping the Right Talent to Drive Digital Growth

Technology that’s customized for the professional services business can help firms map their services to the skills they have on hand and determine where they may need to close the gap.

But recalibrating the talent pool isn’t as simple as reallocating budgets. “People aren’t fungible,” says Joseph. “They’re somewhat unpredictable, and they’re not static. We’ve seen a large increase in the focus on managing people much more intelligently with systems.”

In fact, more than one-third (36%) of professional services leaders say faster acquisition and deployment of new skills and teams presents the top opportunity for digital growth in the next 12 to 18 months. The three top skills they’re looking for are:

1. Advanced analytics and data visualization.
2. Developing and embedding new revenue streams.
3. Working in collaborative, self-organizing teams.

However, 62% of professional services leaders say their teams lack some, most, or all of these skills, compared to 48% of all leaders. In response, many firms are simply throwing money at the problem—boosting compensation to keep top talent in the fold.

“That is not a long-term solution,” says Joseph. “They’ve got to start focusing on talent retention internally. And they need to use systems that support problem-solving.”

But the talent shortage is hindering transformation efforts as well. More than half (51%) of professional services leaders say a lack of workforce skills is the biggest barrier holding them back from achieving their digital transformation goals.

While there’s always a gap between what a firm does today and what leaders want in the future, this gap is wider in professional services than other sectors. Roughly 3 in 4 (74%) professional services leaders say their digital strategy is often or always outpaced by the needs of the business. Only 55% of all leaders say the same.

As challenges loom, firms aren’t planning to pick up the pace on their transformation programs. In fact, 2 in 3 say the pace of digital transformation has either slowed from where it was a year ago or they expect it to slow down in the future.

But economic uncertainty should push firms toward transformation, not away from it, says Cappello. To endure in a time of crisis, leaders should quickly understand how customer needs are shifting and move resources as required to deliver. The key is being resilient and responsive—and the right technology can make all the difference.

“The equation is managing the supply and demand,” she says. “Through these difficult times, you have to have a really good understanding of what your supply is and have a plan to deliver top-of-the-line service and game-changing services. That’s what you need to compete.”

To learn more about how Workday helps professional services firms drive digital transformation, visit our website.