Future-Proofing Your Professional Services Firm: 4 Key Challenges

Borrowing the results from recent other Professional Firms’ business surveys, it seems to me that the top concerns for Australian executives (and most probably other parts of the world) are the same in the short term as they are for the medium term. That being, cyber risks, talent recruitment/retention and upskilling a work force for the digital world.

There are many other concerns for professional services executives, most likely too many to cover in this article, but the main ones I would like to touch on are listed below.

• Cybersecurity and data storage
• Digital Transformation / Technology Disruption
• Talent retention, Productivity and Engagement
• Increased Competition and Marketing Messaging

Cybersecurity and data storage

The number one issue currently = cyber attack or data breach and how to keep client data secure.

The use of technology has encompassed everything. The connectivity of everything means that data and the systems protecting this data need to be robust and secure. Little mistakes like a lack of upgrades to hardware and software (to save a few bucks) will not cut it in the modern world. Employee security processes need to be continually monitored and updated so as not to fall behind the bad guys.

The damage to brand and reputation for a professional services firm from a cyber attack or data breach will be expensive and time consuming for management and executives. The preventive costs are necessary and are now a normal cost of doing business. The data of professional services firms is much too valuable to leave at risk.

Technology Disruption

Generative Artificial intelligence (AI) is going to change the professional services landscape. Advisors will need to engage with this technology and assist clients with navigating the maze. As professional services executives we need to manage our own teams and the use of AI in our Firms. Truly competitive firms must learn to guide clients on technology-driven journeys.

Digital transformation is an opportunity now for firms to become proactive users. There is a need to elevate the professional services firm beyond just a service delivery to an “educating clients” before the need arises model. To become data-driven businesses, Firms need to explore how to turn the data they have access to into intelligence that will be impactful for their client base. Invest in innovation. Real time insights are key to winning clients. Firms need to invest in solutions that derive more meaning from available data. With this transformation – professional services firms will need to have the people with the right skills.

Talent retention

For many years now, this issue has been high on the agenda as a concern for all professional services firms. Firms will need to consider Work From Home (WFH) options, increased flexibility via job-sharing and desk sharing.

Remuneration practices, staff wellbeing, inclusive culture, mentoring and coaching are all aspects of employment that employees expect to be considered and provided when searching for organisations to work with.

The hybrid model of office attendance is embedded in psyche of the employee currently. The need to allow flexibility and to maintain and build the business culture in the office is a balancing act which is still been worked through. Certainly, both sides of this discussion have pros and cons.

Productivity and engagement are the see-saw in the office playground. Many experts believe culture and productivity are impacted by WFH, whereas employees believe they perform better and are most likely to stay longer with the organisation that provides WFH.

Executives argue that team culture and ideas generation is impacted by the decentralisation of the workforce. In my opinion, wasting time in unnecessary meetings and dealing with irrational regulation impacts productivity and engagement more.  

Increased Competition & Marketing Messaging

Strategic days and business plans always seem to look for growth opportunities and new markets through acquisition and/or organic growth. Yet due to more pressing concerns around cyber risks, talent retention and upskilling of existing team members, the growth strategies are taking a back seat. A slowing economy does not assist nor does heavier regulation and burdens from governments.

For new market entrants and nimble start ups the ability to increase competition to the more established players via the use of technology and multiple marketing platforms has changed the dynamics in some industries. The volume of messaging (advertising) that is coming at clients/customers has created a need to develop more succinct messaging, manage costs and understand the return on investment for the marketing dollars spent.

Traditionally, as the economy slows, organisations would reduce the marketing spend to save costs. In this modern world that may just be the wrong strategy to execute. Businesses will need to continue to spend wisely to counter the increased competition and sheer volume of messaging.    

Many clients and referral parties we talk with, list some other risks in the near term for their professional services firms:

• Economic slowdown or slow recovery
• Failure to innovate or meet greater customer demands
• Business interruption
• Regulatory and Legislative changes

The above are certainly risks that are material but I have interwoven how these risks are impacted by the four major risks I described in more detail.

For More Information

For more information on any of the above topics or an initial consultation, please contact Ian Walker (Executive Chairman) or any of the Archer Gowland Redshaw advisers on (07) 3002 2699 | info@agredshaw.com.au.