Selling to Tech Means Investing in Customer Content

Selling technology used to be about features, functionality and specifications, supported by heaps of technical documentation. This is no longer sustainable as organizations increasingly adopt an outcome-based approach, looking for solutions that are tailored to their particular issues and circumstances, and that deliver measurable results. One-size-fits-all products have already started to lose out to those companies that can provide a personalized solution to suit each individual customer’s needs.

However, as the pace of innovation and disruption accelerates, many technology organizations are struggling to have a clear understanding of who the customer actually is. As their expertise continues to expand beyond a core suite of products or services, they are becoming multi-layered businesses offering solutions to companies of all shapes and sizes, from corporate behemoths to small-scale, resource-constrained operations with a handful of employees.

Additionally, the typical decision-making process of a tech buyer is more complex than ever. Technology investment decisions are no longer the preserve of CTOs or CIOs only, but of an extended cross-functional buying committee consisting of stakeholders, influencers and implementers who often have competing interests. Frontline users increasingly do their own research into how the latest tech solutions can support their specific initiatives and projects, and are therefore consulted during the shortlisting and final selection process. In SMEs and mid-tier businesses, around eight people are involved in the process, while for large enterprises (10,000+ employees), this number often exceeds 20. As such, targeting the IT decision maker with content detailing technical performance is no longer a viable approach.

CMOs are now ten times more likely to be primarily responsible for building the business case for digital marketing and CX technology investment than CTOs (40% vs. 4%). Compared to their IT peers who typically initiate a protracted due diligence and business case evaluation process before signing off on a purchase decision, CMOs are more likely to purchase technology based on immediate needs.

Understanding and addressing the diverse informational needs of this extended buying committee has become a major challenge. While six in ten (62%) technology organizations claim they always or frequently craft content based on specific points or stages in the buyer’s journey, creating content that appeals to multi-level roles within the target audience is the top challenge for 68%. This is as much of a challenge for top performers as it is for their less successful peers. It comes as no surprise then that direct vendor engagement continues to decline, with 51% of tech buyers engaging with customer service reps once a month or less and 24% never engaging with them.

Four in five enterprise technology buyers place a high degree of importance on tech providers being thought leaders. Encouragingly, there’s evidence that technology organizations are putting content front and center: content management, creation and localization is the second most time-intensive task of tech marketers, accounting for nearly a fifth (18%) of their working hours and surpassing data management, integration and analysis (14%).

The vast majority (80%) of tech buyers look outside the technology buying committee for information and advice on technology solutions, with reviews, surveys and usage stats from fellow technology users accounting for 51 % of these dependable sources of information. The reason many tech buyers prefer to probe these external sources is twofold: more often than not, the content produced by vendors is intently focused on the pre-sale stages and it doesn’t always incorporate first-hand insights from existing customers.

There are three key areas technology organizations need to focus on to produce customer-centric content that engages target audiences and addresses their top-of-mind concerns: (i) using personas to build a coherent picture of buyers and understand what motivates them and guides their investment decisions, (ii) prioritizing audiences’ educational needs over the organization’s promotional messages, and (iii) creating content that builds loyalty with customers. Most importantly, they shouldn’t lose sight of their audience, and how they can use engaging content to convey their brand voice, values and expertise at every stage of the buyer’s journey.

Want to learn what a technology professional can do to improve customer experience now? Check out the ON24 Webinar Benchmarks Report for Technology for tech-specific insights.

Building Better Digital Experiences for Media and Publishing

Across all sectors, the role of technology is shifting from driving efficiency to being an enabler of innovation, and the media and publishing industry is no exception. The boundary between media and technology is blurring every day – some see it as a crisis in the making, others are convinced it opens up unprecedented opportunities. One thing is undeniable: technology can help build better digital experiences for media and publishing companies — the kind audiences crave.

Learn How Informa Mastered Webinars for More Than 100 Brands

Leading companies in this space have adopted a tech-first approach from the very beginning and have stayed true to their tech-powered roots. For Netflix, the technology is just as important as the content and this is what gives the company an edge over its competitors. Technology and data underpin everything Netflix does, as it uses anything from powerful recommendation engines, to AI-powered compression algorithms to ensure the best possible picture quality using the smallest amount of bandwidth, to a content delivery network specifically tailored to its needs. Netflix’s success has led to ‘content bingeing’ becoming a normal and enjoyable way in which audiences consume media.

Three Ways To Build Better Digital Experiences for Media and Publishing Now

The ads of the future will be highly immersive and non-intrusive

Advertising is not defunct, but its future hangs in the balance. Bring advertising and storytelling together in a way that resonates with your customers and is an extension of their media experience.

Keep the communication going with your customers

Providing high-quality content is no longer enough to build a successful media brand. Your audience expects you to have an in-depth understanding of their wants and needs, and go the extra mile to deliver a seamless experience. Use webinars to open a dialog with your customers and build a customer-centric experience based on robust engagement and content performance insights.

Use technology to build a direct relationship with the consumer

With the direct-to-consumer race heating up, getting ready for a tech-driven future is critical. Explore how emerging technologies can help you transform content creation and distribution processes, attract and retain fickle viewers, and deliver personalized media experiences that make them feel known and valued.

The Power of Technology

“One of the things that’s really challenging in our space,” said Chris Goss, Director of Studio Technology at Netflix, “is the fact that the business of content creation is very, very slow to adapt to new technology. Bringing in these two sides gives us a unique opportunity to fuse the world of Silicon Valley and Hollywood together. It comes with a lot of challenges, and one of those challenges is the fact that traditional IT has always been seen as ancillary, not integral to our process, [but] there’s all this room for growth and innovation in entertainment.”

Discover how Thomson Reuters Extended Its Summit Reach by 73% at a Fraction of Its Cost

Artificial intelligence (AI), machine learning (ML) and virtual reality (VR) are expected to revolutionize the media and publishing industry and influence all parts of the value chain. Pioneering brands have already started to reap the rewards. Swiss news publisher Neue Zürcher Zeitung (NZZ) and the Wall Street Journal used machine learning to build flexible paywalls and individualize the experience. Intel and NBC provided the first ever live-VR experience from the PyeongChang 2018 Games, with more than 50 hours of live VR content.

How Media and Publishing Can Execute

Technology use cases in the media and publishing industry are far-reaching, such as automating workflows and processes, supporting data-driven decision-making, personalizing the customer experience and predicting demand. Most importantly, technology will help boost creativity – arguably the power engine behind any media business – and optimize content monetization strategies. According to Guy Finley, Executive Director at the Media and Entertainment Services Alliance (MESA), organizations equipped with an “AI-enabled feedback loop based on real-time, consumption metrics will up their creative batting average, which will thus increase production and commercial ROI”.

Discover how webinars can help media and publishing professionals improve their digital experiences with the ON24 Webinar Benchmarks Report for Media and Publishing.

Why Tech Is in Love With Everything-as-a-Service

Today’s digital technology can do more than ever before so it’s not surprising that technology providers are adjusting the way they package their solutions. They are responding to tech buyers’ demands for more control, easier and faster access to cutting-edge technologies, more ways to mitigate risks associated with costly and lengthy implementations, and improved ability to scale capacity on demand. In essence, providers are responding to tech’s love for everything-as-a-service.

Adoption of the everything-as-a-service (XaaS) model for technology procurement and deployment has picked up speed in recent years as its benefits for tech buyers – increased flexibility, efficiency and agility – have become more apparent. Flexible consumption models, either subscription-based or pay-per-use, are a far cry from the traditional upfront purchasing or licensing models, giving tech buyers more control over what they consume and how much they pay for it.

The Rise of Tech’s Love for Everything-as-a-Service

The rate of adoption is on the rise: among US companies that consume at least 15% of their enterprise IT on a XaaS basis, 71% report that XaaS accounts for more than half of their technology. Additionally, 24% currently consume over three-quarters of their enterprise IT as a service or are planning to reach that level within the next two years.

While the tech buyers’ original motivation for everything-as-a-service adoption was to cut costs, there’s increasing evidence that XaaS models are used to power digital transformation efforts and help them stay on the leading edge of technology by democratizing innovation. Seven in ten companies claim that XaaS is ‘very’ or ‘critically’ important to their business success, while 61% say they’re mostly or fully achieving accelerated innovation with these flexible models. Companies are 2.6 times more likely to prefer accessing innovation capabilities, such as artificial intelligence and advanced analytics, as a service.

Three ON24 Tips for Marketing to Tech

 Use flexible consumption models to become more nimble

Tech buyers want vendors to innovate and enhance their offering better and faster, which means you need to adopt a more flexible and agile development and delivery approach. Make the most of the XaaS economy by tapping into the wealth of engagement data generated throughout the customer lifecycle, using it to optimize your customers’ experience and uncover additional revenue opportunities.

Cut above the noise with industry-specific case studies and robust insights

Tech buyers have a growing appetite for genuine insights and external endorsements, and are more interested in finding out how you can help solve their unique business challenges rather than going through a long list of tech specs. Think in terms of outcomes, communicate succinctly and use success stories to demonstrate your technology’s potential.

Develop collaborative outcome-based solutions

As the complexity of tech stacks increases and customers demand tailored solutions that help address their unique business challenges, out-of-the-box solutions are no longer viable. Innovation is fostered through collaboration, so work with partners who have the right skills and competencies to pursue a diverse range of market opportunities.

How Tech can make Everything-as-a-service a Differentiator

Tech vendors also need to be clear how they position themselves in a crowded market. In the marketing space alone, over 7,000 individual solutions exist. As such, vendors need to create clarity and understand how they position themselves relative to the approach taken by their buyers – whether they are using an integrated stack based on a single cloud provider, a ‘best of breed’ approach that assembles many different solutions from different providers together, or a mixed approach that might be based on one core platform, such as a CRM, ERP or other widely-used databases.

In terms of benefits for vendors, XaaS enables recurring, steadier revenue streams, healthier margins and a renewed focus on building long-term relationships with customers. Flexible consumption models generate a treasure trove of data pertaining to engagement and usage throughout the customer lifecycle, which can feedback into interaction optimization efforts.

However, making use of data appears to be an area that technology marketers need to improve on. Three in five technology CMOs struggle to extract insight from data (61%) and believe that data protection legislation will make it harder to build direct relationships with customers (59%) Only a quarter of tech CEOs agree that their organizations are exceeding their customers’ expectations for personalized experiences.

Tapping into all available data to better connect with target audiences, personalize interactions at any point in the buying cycle and understand which products or features resonate more with customers is crucial for success in the XaaS economy. Embedding data into everything technology vendors do, and democratizing it so it can be used throughout the organization, is what sets leaders apart from the pack.

Want to learn what a technology professional can do to improve customer experience now? Check out the ON24 Webinar Benchmarks Report for Technology for tech-specific insights.

How FinServ Can Get On Board with Financial Education

Research has shown that consumers are most likely to turn to their primary financial institution (55%) when seeking financial literacy resources, ahead of online sources (45%) or their family and friends (39%). The payoff is certainly not negligible: a financial education program would prompt nearly a fifth (18%) of consumers to bring more business to their financial provider.

Millennials are one of the most important segments to consider when developing a content program. They are constantly on the lookout for opportunities to improve their financial health and prefer using digital channels to access content, usually turning to comparison and advice websites. Over half (55%) of millennials said that a financial education program offered by their financial provider would be ‘extremely’ or ‘very’ valuable (compared to an average of 38% across all consumers surveyed).

Santander’s Prosper and Thrive content hub, which was set up to deliver regular financial content to this key demographic, is an example of a successful content initiative. Designed to resemble a media outlet, the hub features practical content prospects can relate to and helps the bank move away from a heavy focus on product promotions.

C. Decker Marquis, Santander’s SVP and Director of Digital, Social Media and Multichannel Marketing, explained the rationale behind its financial education offering:

“We wanted to talk to people earlier in their decision-making process, and wanted our content to be found when they had lifestyle questions.” She added: “You wouldn’t necessarily think about coming to a bank for the types of stories we feature, but we want our audience to feel like we understand them and their goals.”

How to Financial Services Can Connect with Content

Despite these success stories, there’s evidence that content creation is one of the areas that’s downplayed in the industry. In many cases, content marketing is perfunctory at best. In 2018, FSI companies were less inclined than their peers in other sectors to cite ‘creating compelling content for digital experiences’ as their most exciting opportunity (7% vs. 15%). They were also less likely to prioritize content marketing, content management and creation of video content.

Deploying a mix of content types is the best way to reach audiences, whether you operate in the B2C or B2B space. Almost four in five (78%) treasury and finance professionals consider webinars to be useful or very useful, only slightly behind conferences and white papers/research reports, and sharing the third spot with infographics and interactive tools.

Finance organizations need to be careful not to fall into the quantity over quality trap though. Three in five (59%) executives working for asset management companies claim that too much content is being produced in the industry and the vast majority (94%) agree that content in financial services needs to be more targeted.

Compliance, Legal Aren’t the Hurdles Financial Ed Thinks It Is

While this indicates there’s a lot more work to be done, it also suggests that restrictions imposed by legal and regulatory teams don’t slow down content initiatives that much and content can move quite quickly through the long approval workflows. Compliance teams increasingly sit in marketing departments and are involved early, at the planning stages, to enable swift content production.

In order to stand out in a world overloaded with information and be seen as a trusted partner, finance organizations need to frame the messages they want to convey with the help of their content program in a way that resonates with their audiences. It’s also worth looking beyond close competitors to get a glimpse into how other sectors are serving the same audiences.

Content in the finance industry is used both to inspire and help assess options, and it’s worth remembering that consumer and business audiences have slightly different needs. Consumers crave transparency and timely advice, are eager to understand the impact of their financial choices and don’t want to miss out on good financial opportunities, and content can dramatically influence their perceptions. Finance professionals prefer well-researched, data-driven content and look for impartiality, specialist insight and practical guidance.

Discover how professionals in the financial services industry can provide a better digital experience with ON24’s Webinar Benchmarks Report: Financial Services Trends.

The Professional Services Industry Needs Freelancers

The professional services sector is knowledge-intensive, using expertise as a primary differentiator and largely relying on people to stay competitive. While talent is undoubtedly a key asset in the industry, talent management continues to be one of the biggest challenges. In 2018, two-thirds (65%) of executives in service-centric industries stated that their organization had to turn down work because they lacked the necessary resources and skills to deliver that work, up from just 35% in 2017.

Traditionally, professional services organizations have relied quite heavily on subcontractors and freelancers to perform some of the work. However, the focus has been on augmenting existing resources during busy periods rather than using external talent as a primary recruitment strategy. As maintaining full-time in-house talent across disparate competencies has become increasingly difficult and some skills continue to be in short supply, professional services companies need to think beyond the traditional operating models.

Use the open talent economy to source expertise

While only a quarter (26%) of professional services executives claim to use on-demand, online marketplaces for freelancers, two-thirds (66%) expect to use them in three years’ time. Additionally, 58% report that they would be unable to conduct business as usual without an external workforce, the highest among all industries.

ON24 Tips:

Capitalize on webinars to showcase the expertise you have access to.

Webinars are a gateway to your most important asset: expertise. Feature both in-house and external experts in your webinars to reveal what your brand is all about. A combination of market insights, case studies, video interviews and in-depth testimonials can prove highly effective.

Demonstrate thought leadership with a comprehensive webinar program.

To capture new business, you need to be at the center of industry conversations and improve your position as a thought leader. Webinars can help you drive those conversations, focus on your points of difference and show how you’re using technology to augment the services you provide.

Develop proprietary data-fueled insights to establish authority.

Understand your prospects’ motivations and pain points, then use that information to create data- or research-focused webinars to highlight your expertise in the areas they’re interested in. Establish authority by contextualizing insights, not just processing information.

Forming external talent networks allows professional services companies to tap into infinite capacity and pull together virtual teams to work on client projects on an as-needed basis. Technology can now automate the process of sourcing and commissioning contingent and freelance workers, and will continue to play a key role in managing and maintaining these ‘talent clouds’.

Why Talent On-Demand Is Necessary

Adopting a more flexible approach to talent management also provides easier access to so-called ‘smart creatives’, who combine technical knowledge, business acumen and creativity. Google’s Eric Schmidt believes these people can have a transformational impact within organizations: “When you put today’s technology tools in their hands and give them lots of freedom, they can do amazing things, amazingly fast.”

Executives in the professional services industry report that 43% of their total workforce spend is on non-payroll workers and service providers. However, there’s evidence that contingent workers are usually undermanaged as only 16% of professional services executives strongly agree that their organization has a talent strategy that encompasses both employees and the external workforce.

Embracing the open talent economy and managing the external workforce more effectively enables professional services providers to deliver innovative services and respond more quickly to new opportunities, as they have permanent access to critical capabilities and skills – many of which are usually in short supply. It also empowers them to gain a firm foothold in the Knowledge as a Service (KaaS) economy.

How Digital Can Help Associations Rethink Memberships

Figures from Marketing General show that in 2009, association executives were most likely to say that members’ top reason to join was access to specialized information. In 2018, networking opportunities were by far the most popular choice, with 58% of associations citing them as the top reason, compared to only 25% for specialized and/or current information.

In a world where networking avenues abound, connecting with like-minded peers has never been easier. While providing networking opportunities continues to be a time-tested strategy for member acquisition and retention, associations should also focus on what can truly set them apart: high-quality learning and continuing education experiences.

A Tip to Consider

Use a webinar engagement score to measure the effectiveness of your outreach activities.

If your association is among those struggling to measure member engagement, use data from your webinars to find out what works and what doesn’t. These can be complementary to any other figures you are using, such as Net Promoter Score. Read our briefing on ON24’s Engagement Score to find out how multiple types of webinar actions can create a single, easy-to-understand metric.

The argument is compelling. The vast majority (82%) of members have completed some sort of professional development within recent years, but only 53% have chosen their association as a provider. These same members rated the quality of training and education provided by their employers as being significantly lower than that received from their association. Additionally, there’s evidence that offering certification has a positive effect on renewal rates: 43% of associations that saw a renewal increase also offer certification.

Providing educational material that supports professional development and career advancement is a key differentiator for associations faced with growing competition. As the data above shows, there are ample opportunities to tap into current market demand and meet members’ evolving needs.

Provide a Better Pharma Buying Experience with Digital

Life sciences companies aren’t limited to only working on developing their innovations, such as new drugs. Building relationships is also critical.

Research from Bain and Company shows that at least two-fifths of physicians’ brand preference is attributable to customer experience factors beyond the product. These include, for example, how well pharma companies support physicians by providing answers to medical questions or connecting them with peers. Quite worryingly, physicians gave pharma companies an average Net Promoter Score of -11 across all interactions.

It’s clear life sciences organizations need to shift from pushing products to expanding the value proposition, becoming solution providers and proactive members of the healthcare delivery ecosystem. But are they ready to address these needs and be at the forefront of this transformation?

The answer is mixed.

The State of Digital Content in Life Sciences

According to Accenture’s recent State of Content for Life Sciences, more than three-quarters (78 percent) of marketers in the pharma and biotech sectors claim their organization produces a moderate to enormous amount of digital content and assets, with three in five (58 percent) spending more than $50 million on content each year.

However, only 11 percent report they have a clearly documented content strategy that meets current and future needs (compared to 42 percent across all industries) and only 13 percent believe they leverage content well. There’s an obvious disconnect between having content capabilities and being able to aptly communicate complex information.

Content created by life sciences organizations is still very much product-focused and zeroes in on the marketing message instead of the educational component so many HCPs and other stakeholders and customers crave. While the efficacy and safety profile of drugs remain the most sought-after information in the pharma sector, requests for real-world evidence and impact on patients’ lives have seen a marked increase as well.

The Digital Content Trends Shaping Life Sciences

Using key opinion leaders (KOLs) or influential medical experts — either practitioners or researchers — can certainly help elevate the conversations with HCPs. However, the traditional scope of the KOL’s role has changed. Whereas life sciences companies might have relied on a single KOL throughout the lifecycle of a product, they now need to match the right KOL to each stage in the development and marketing of a product. Instead of perceiving them as conduits of information, organizations need to develop strong, mutually beneficial partnerships with KOLs.

Another trend that is reshaping the life sciences industry is a growing focus on patient services. As the market is shifting toward value-based, personalized healthcare, the demand for delivering patient services has also increased.

These services range from helping patients better understand their disease and how they can manage it, to helping them adhere to treatment plans and connecting them with others affected by the same condition. Examples include AstraZeneca’s Day-by-Day coaching service for patients recovering from a heart attack, providing a combination of digital content and one-to-one coaching, and the dedicated social network for heart failure patients and caregivers launched by Novartis.

Delivering Services Into the Hands of Patients

Traditionally, patient services were solely packaged with specialty, rare disease treatments and were viewed as an add-on to product sales rather than a standalone offering. However, recent years have seen an increase in the range of patient services offered as pharma companies are ramping up investment in complementary areas.

Despite the increase in both demand and supply, Accenture research revealed there’s a significant communication gap as just one in five patients are aware of these services. Around half of HCPs reported that they hear about patient services less than 25 percent of the time from sales reps or through other channels. If HCPs don’t have a good understanding of what’s available, they’re not likely to make recommendations to patients.

Life science organizations need to fill all these communication and information gaps by focusing the conversations with HCPs and the rest of the market on outcomes rather than products. They should strive to become trusted sources of scientific information, comprehensive data and peer-reviewed evidence, not just providers of prescribed substances or medical devices and technology.

Ultimately, they need to help both the healthcare provider and the patient have a better conversation and identify the best possible care approach. Improving health outcomes is a responsibility that all players in the life sciences industry share.

Keep an eye on this space as we explore the challenges and opportunities facing the pharmaceutical and life sciences industries.

How Media and Publishing Can Adapt Ads to Digital

Media and publishing organizations, particularly those in the news sector, have struggled with diminishing returns from advertising for several years. By some estimates, US newspaper advertising revenues have declined by more than 66% from 2005 to 2017, so the future of the industry hinges on digital growth.

Time and again, we’ve seen that having a single revenue model, particularly one built around ad-funded content, is difficult to sustain in the long term as a sharp increase in customer churn or a major economic downturn can change the rules of the game in the blink of an eye.

Even among well-established business titles – many having built their success on a promise of reaching buyers through controlled circulation – ad revenues struggle when auction-based media buying provides an easier, more measurable and cost-effective way of reaching tightly defined target audiences. On the flip side, readers who perhaps would have turned to such sources in search of information can now simply use a search engine to locate the content that meets exactly their needs.

The Subscription-Ad Conundrum

Even so, while audiences understand that ads are often part and parcel of the media experience and are willing to watch some ads in exchange for free access to content, the majority believe that ads are intrusive and complain about the sheer number of ads. Unsurprisingly, they are willing to pay a subscription fee to have an ad-free media experience: 44% of respondents cited ‘no ads’ as a top reason for subscribing to a new paid service.

However, industry analysts increasingly argue that these models are not sustainable and using consumers’ resentment towards ads as a guiding principle is one of the media industry’s greatest fallacies. Ad-funded content still has a major role to play, and those premium publishers than both serve ads while growing subscriber numbers have proven that a blended model actually works. These organizations are successfully building a sizeable ad-funded segment outside of subscriptions by extending their customer-first approach to advertising.

For decades, media and publishing organizations have focused on delivering high-quality content but severely neglected the ad experience. As a result, readers and viewers have become frustrated with the advertising component of their media experience (one in four US internet users block ads and 27% of global news users block ads on any device) and this led to an apparent demise of ad-supported models.

The Future of Ads in Media and Publishing

But recent success stories show that it is possible to drive long-term growth with advertising by creating engaging ad experiences. Using a combination of strong creative, non-intrusive formats and optimized frequency capping, and finding the right balance between relevant and creepy, leading organizations ensure that ads contribute to the media experience instead of interrupting it.

One key area of potential lies in the careful and considered use of native advertising and commercial partnerships. As Margaret Sullivan remarked while working at the New York Times:

“Advertising and news content have always run side by side in printed newspapers. Now, with most readers seeing The Times on digital platforms and with print advertising in a long-term, irreversible decline, the company is seeking new revenue sources… The close collaboration between news and advertising, though, comes with a need for particular care. And sponsorships – which closely tie a particular advertiser to a particular piece of journalism – come with their own special set of concerns.”

As such, maintaining the integrity of content while allowing sponsors and advertisers to connect with audiences, offers a fruitful way of boosting revenues. But the delivery of these messages needs to be done in a way that both respects the viewer and gives them a compelling reason to tune in.

Discover how webinars can help media and publishing professionals improve their digital experiences with the ON24 Webinar Benchmarks Report for Media and Publishing.

The Challenges and Opportunities Facing Professional Services

There’s no denying that digital technologies have driven fundamental changes in every single industry, with companies of all sizes swiftly changing the way they do business to maintain their competitive edge. In the face of disruption, organizations in the professional services industry had to adapt their offerings accordingly, assisting clients on their own digital transformation journey.

The professional services sector is diverse, with players ranging from global behemoths providing the full breadth of services in every corner of the globe, to boutique firms with a very specialized offering. It is estimated to be the second-largest employment sector in the US, after healthcare, and is expected to grow to approximately 22.3 million jobs by 2026. It accounts for 11% of the UK’s gross value added and 13% of its employment.

The industry is experiencing rapid change due to the disruptive impact of digital technologies, and companies need to transform their operations and service execution models to adapt to this new reality.

The Pressure of Change in Professional Services

However, change is not a foreign concept as the sector has been in flux for the last three decades. Since the 1980s, management consulting has gradually shifted from offering bespoke expert services to delivering more standardized, technology-enabled services. The boundaries between strategic and technology consulting have blurred significantly. Similarly, leaders in the accounting sector (the Big Four) have been increasingly operating at the intersection of accounting, consulting and even law.

But this industry-wide transition is not without challenges. Client expectations are increasing, competition from digital disruptors is ramping up and margins are tightening. Professional services firms need to find innovative ways to create value and deliver the best possible outcomes to their clients. The time and materials model, where companies charged for the expertise they provided on an effort basis, proved to be highly profitable but is no longer sustainable.

Professional Services Turns to Tech for Help

In the everything-as-a-service economy (XaaS), it has become increasingly difficult for professional services companies to compete. Affordability, timeliness and demonstrable value are among the most pressing client concerns, and there’s evidence that the industry is struggling to meet those demands. Revenue growth has fallen below 10% for the past three years and reported billable utilization dipped to a new low of under 70% in 2018.

Heightened client expectations have led high performers to shift their client engagement models from traditional time and materials or effort-based engagements to delivering services on a performance or outcome basis. These companies have turned to digital technologies to provide innovative services and support more predictable revenue streams. This extends beyond just addressing the disconnect between the front and back office (a problem that has traditionally plagued the industry), allowing them to unbundle offerings and foster engagement outside the project-based model, sometimes even without the need for in-person interactions.

In an attempt to stay ahead of the curve, top management consulting firms opted to develop the technology in-house to augment their services. Deloitte’s Emerging Technology Partner, Marc Verdonk, highlighted the rationale behind doing so: “The client is happy because using the tech means ultimately they often pay less, and we can be more efficient, which allows us to continue investing in innovation, and everybody benefits.”

Professional Services Still Needs To Catch Up

In the legal sector, lawtech (often heralded as ‘the new fintech’) has continued to rise in prominence as clients demand more transparency and accountability, and push companies to provide more than just traditional legal services.

However, the vast majority of professional services companies are still playing catch-up. Only a fifth (20%) of IT leaders in this sector claim their organizations have been ‘extremely’ or ‘very’ effective at using digital technologies to advance their business strategy. Most of their technology investment focuses on alleviating legacy pain points rather than transforming how professional services are delivered or how the client relationship is managed.

Data and technology are the cornerstones of digital transformation, and the professional services sector is no exception. The convergence of the two is set to shape the evolution of the industry in the years to come, and companies need to keep pace with the change if they are to succeed.