A Guide to Project Management for Professional Services
According to a recent report, North America and Western Europe represented two of the largest professional services markets in the world. Year on year, the professional services industry continues to grow in these markets and in regions across the globe.
But, what are professional services? What challenges do these industries face? And what tools can firms leverage in order to bring more value to clients and stakeholders?
At Wrike, we feel it’s important for teams in all industries to be able to use our tools for growth, productivity, and to head off the challenges of an ever-changing client-focused marketplace.
In this guide to project management for professional services, we’re offering an overview of the wider industry as well as a look at some of the challenges and tools professional services organizations should be aware of.
What are Professional Services?
Professional services is a broad term that refers to any business or department whose core output is a service or particular expertise, rather than a manufactured product. Examples of this include accounting, advertising and marketing, and legal services.
Consultants are also considered to be working within the professional services industry, again, because they are offering their expertise.
Independent vs. embedded professional services
Many professional services firms are external and, therefore, independent of the companies they work with. These firms are called independent professional services organizations. The alternative to this would be an embedded professional services team.
While independent professional services firms largely exist outside of a company’s formal internal structure, an embedded professional services team can be considered to be part of a larger organization.
PS teams in this scenario are less driven by "client satisfaction" and more driven by KPIs and metrics that represent the broader interests of an organization.
What do professional service firms do?
Services-based companies can cater to businesses in a myriad of ways. Oftentimes, PS firms and teams provide services that align with the growth, legal compliance, and technology goals of an organization.
For instance, a company may need to comply with new internet data regulations being enacted in their country or region. This business might then hire legal and IT services firms specializing in compliance. Rather than producing something for the organization, these firms are instead offering their expertise to help ensure that the company remains in compliance with the law.
An example of an embedded professional services team might include a creative or marketing apparatus that already exists within an organization.
For example, a company may decide they would like to promote their business at an industry-specific event or expo. They might then approach the marketing and creative teams within their organization to come up with physical and digital promotional material like posters, one-pagers, digital ad copy and more. These teams may not even realize it themselves, but they are, in a sense, acting as a professional services arm of the enterprise.
Other examples of a professional services team’s duties might include accounting/payroll specialists who help onboard new hires for an organization, or even architecture firms who work closely with construction businesses during the planning stages of a new build.
What are the biggest challenges that professional services teams face?
Because professional services are not a monolith, it may be hard to identify just one specific set of challenges that firms face.
58% of PS teams interviewed by Deltek in 2018 said they spent “hundreds of hours producing reports.” Hurdles like this can have a significant impact on how teams can deliver value to clients and pursue profitable projects. But it’s not the only kind of challenge that teams face.
Different industries in the sector will have different pain points but, generally, project managers in the professional services industry face serious challenges around resource management, ineffective project planning, and productivity.
Defining project scope is a key part of effective project planning
In professional services, poor project definition can be a barrier to on-time and on-budget delivery. When the outlines of an initiative are hazy or ill-defined, issues like scope creep can set in, which inevitably leads to overspend and client dissatisfaction. This is one of the biggest challenges facing professional services firms.
In fact, according to Wrike’s 2019 Professional Services Work Management Benchmark Report, 97% of teams experience project delays, with changing client expectations being the number one reason.
Establishing the parameters of a project is a necessary step in project management, especially since changing client expectations can be dependent on any number of variables — not all of them reasonable.
It can be tempting for some client-facing firms to adopt a “customer is always right” approach without properly taking resource constraints into account. But, because resources are often limited, teams may find themselves in a difficult position when it comes to allocation and optimization.
Billable hours are the key to profit margins
Professional services firms are uniquely sensitive to factors like employee utilization rates. Low employee utilization may signal poor resource management processes or even hint that certain projects are not as profitable as they could be.
For instance, a PS firm that offers legal or accounting services would place billable hours at the top of its priority list. Why? Unlike firms that depend on ill-defined metrics like “client satisfaction,” these industries rely heavily on carrying out work on behalf of a customer – i.e. tax preparation, trademark filings etc. Therefore, the time spent on this work must be accounted for.
A software solution that tracks time, allows for automated workflows, and enables dynamic requests, can cut down on the amount of time employees spend doing non-billable work (i.e. easily-automated administrative work or meetings that could be a simple request form).
Keeping an eye on these metrics will also give insight into current productivity levels and future projects to pursue.
Increased visibility and strategic decision making are the keys to client retention
Project management software that improves workflow, client visibility, and team productivity can help professional services teams track the health of an initiative and become more accountable for the work they produce.
Without a way to properly manage and monitor all these vital aspects of project management, scaling up and optimizing team performance can be difficult.
Many professional services firms are now turning to software solutions like Wrike, which offers practical features such as time tracking for billables, automated requests, workload management and more.
With the challenges that professional services teams face, choosing the right tools can help firms unlock benefits like higher profit margins and better client retention rates.