Is Poor Organizational Agility Impacting Your Firm’s Performance?

Organizational agility—defined loosely as a combination of flexibility, nimbleness, and speed—is increasingly regarded as a source of competitive advantage in today’s fiercely competitive and fast changing markets. The ability to transform information into insight in response to market changes is critical success. Companies who want to compete successfully in the global marketplace must think of ways to respond quickly and make their processes more flexible.

What is Driving this Need for Flexibility and Speed?

According to Consulting on the Cusp of Disruption, an October 2013 article in Harvard Business Review, professional services and consulting have been immune to disruption for two reasons: opacity and agility. Clients find it very difficult to judge a firm’s performance in advance, because they are usually hiring it for specialized knowledge and capability that they themselves lack.

However, in recent years, firms are seeing their competitive position eroded by technology, alternative staffing models, and what the authors call the democratization of data. Some examples of disruptive trends in the professional services industry include:

Client Sophistication

Many C-suite executives have come from the consulting ranks and understand how professional services firms operate. These executives are intent on reducing scope and cost of work they outsource and adopt a more activist role in selecting and managing the resources assigned to their projects.

Project Modularization

More and more, work is done anywhere by anyone who can do it better, cheaper and faster. Companies are discovering how to break a project down into mostly decoupled, atomized work components that can be performed by small independent teams scattered across the globe. These work components are then put together by an integration team to create their final product.

Project Delivery Innovationorganizational-agility

Clients want professional services firms to deliver cost-effective services in smaller, fixed price contracts, but at the same time want to retain highly seasoned professionals equipped to address their most challenging industry-specific process needs. To succeed in this environment, professional services firms must continually improve their service delivery methods to increase client value and profitability and lower cost.

Productization of Services

Professional services firms can deliver services in an ad hoc manner for every client or package them in structured yet flexible ways. By packaging, pricing, and marketing these mature service offerings, a professional services firm gains a streamlined sales process for both new and existing clients, more predictable outcomes, and higher profitability.

Value-Oriented Billing

The basic source of revenue for professional firms remains hourly billing, but value billing is a growing trend. Currently, value-oriented billing is easiest to apply for services where the value is explicit, such as tax savings, damage awards, ad placements, or the size of an acquisition or merger.

Blend of Industry Lines

Until 1995, Fortune magazine maintained separate Fortune 500 lists for industrial and services companies. However, it became increasingly difficult to distinguish between the companies offering products and those offering services. Product companies now sell services, while services companies sell products.

 

Professional services organizations that are best able to anticipate market changes will be better able to innovate and continue to develop value added services that meet customer needs. Download our whitepaper, How Flexibility and Speed Can Give Professional Services Firms Competitive Advantage, to learn and understand how your professional services firm can quickly adapt to this new environment.

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  1. Reblogged this on smay772.

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