COVID-19, Professional Services Firms and Digital Transformation

https://natwestbusinesshub.com/articles

Extracts from an interview recorded in 2020 for Natwest Business Magazine with our co-Founder Rick Seabrook, discussing the impact of Covid-19 on professional services firms and their accelerated adoption of digital. 

Ask the professionals: can COVID-19 transform technology in professional services?

Rick Seabrook, is founder of Panoram which specialises in helping professional services firms and their clients with digital change. Here he discusses the impact of COVID-19 on professional services’ journey towards digital transformation.

How have professional services bolstered their digital resilience during COVID-19? Are they now getting the basics right? Is there more to be done?

If you mean, do most firms have the basics in place to be able to continue remote operations both now and in the near future, then I’d say on the whole, yes. That is undoubtedly true at the higher ends of the market and becomes more sporadic the smaller the firms are.

Necessity has been the mother of invention. Firms quickly responded to lockdown to procure necessary hardware and software, introduced new policies and procedures around working practices and put in place the measures needed to support effective remote working, reduce paper-based workflows, and introduce online collaboration and e-signatures and so on.

But digital resilience is also about firms being ready to innovate and grow as fully digital-first businesses and here I’d say we still have a long way to go.

What is a digital-first way of working for professional services? 

For professional services firms, we encourage them to consider that clients are increasingly operating digitally, and as a result, the expectation of their professional services providers will be that they are too.

So, a digital-first way of working for professional services needs to start with the client experience and challenging every aspect of how clients are engaged, served and delighted on both a transactional and ongoing basis. And similarly, internally, how professional services firms run their delivery processes and enable employees to work in smarter, efficient and more agile ways. And it can further expand into ways in which firms approach the market and make money through new business models, ecosystem collaborations and inventions.

I think right now, many professional services firms don’t understand digital in this way, and that is a significant problem. There are very few, if any examples, of genuine digital-first professional services firms who are looking to innovate and radically transform their operations and the way they serve their clients. Being truly digital-first requires firms to accept that they may even need to challenge large parts of their practice to future-proof their overall brand.

Will COVID-19 result in an acceleration in innovation? 

On the whole I think the pandemic has made innovation in professional services more likely to accelerate. As clients themselves look to innovate out of the unique economic shock we’re experiencing, this will have a knock-on effect for professional service firms who will, in turn, need to respond and become vastly more efficient and innovative in how they serve their markets.

I have heard from several firms, where clients are coming to them and saying: “Let’s innovate together. We’re open to your ideas. We’re having to dramatically change parts of our business, help us with that.” So these clients are encouraging ideas about how their professional service suppliers can plug into these new ways of working.

It may be that a more widespread culture of innovation develops in professional services which has not been the case in the past. But I think it will come from clients triggering the conversation. Historically, evidence shows that professional services firms tend to innovate at the pace at which the market demands rather than for the sake of it themselves.

Immediate opportunities for technology-led change will come in firms embracing the cloud, both on the data and applications sides, automation of client processes such as data capture, document workflows and collaboration, and a renewed focus on some of the hygiene factors such as information security and information management.

While a lack of funds following the pandemic could dampen appetites for new technology, what is the cultural resistance to tech in professional services? 

I think the affordability issue can be addressed by firms looking at current fixed costs and making decisions around real estate and workforce; while variable costs can undoubtedly be addressed in higher adoption of cloud technologies and better use of existing enterprise technologies. 

In terms of cultural barriers, I have a slightly different view from many who seek to place the blame for a lack of technology adoption on the culture of professional services firms. I think of other factors such as client unwillingness to innovate and frankly some very poor-quality technologies in the professional services tech marketplace, these are also significant impediments to driving radical service transformation. 

Who should be owning the conversation about technology and innovation in professional services?

Undoubtedly the Managing Partner or CEO. This is a leadership issue. In the future, your digital strategy is your business strategy, so technology and innovation agendas should be set at the top of the organisation.

Technology is moving fast; how do professional services manage the risk of obsolete technology?

This is a significant risk, but in my experience refers not so much to obsolete technology as to redundant technology. Or in other words, a technology that the firm has been persuaded to purchase but is actually not delivering any underlying value in terms of savings or increased revenue or margins. 

The legal market I am involved in has vast amounts of money pouring into bespoke, proprietary technologies that solve a narrow issue sometimes quite badly and expensively. Our advice to firms is to look at your core enterprise systems and seek to exploit the underlying functionality in those systems before buying new tech. Microsoft 365 is an excellent example of technology that can be quickly configured to provide all the document, contract, email and case management needs of a firm as well as client collaboration.