The New State of Professional Services Is Here — Where Does Your Company Fit?
The following is an excerpt from Kantata’s new State of the Professional Services Industry 2024, written by Kantata CEO Michael Speranza. Click here to read the full report.
The last few years have been defined by a backdrop of economic uncertainty that necessitated response to a rapidly evolving business environment. Firms rose to the challenge and optimized their businesses; however, the demands placed on the industry have come at the expense of true investment and sustainable improvements.
Our first annual State of the Professional Services Industry report shows that we are starting to see positive signs of stability. Yet, as optimism grows, so does the risk of complacency as many firms cling to short-term fixes, focusing on tactical profitability gains without addressing the deeper, systemic changes needed to thrive in the future.
Yes, firms are feeling more optimistic about the future, with 70% of respondents indicating that margin and utilization rates are increasing. But alongside this optimism comes an acknowledgment of the persistent challenges standing in the way. Firms have optimized at the edges and need to commit to improving at the core.
The biggest obstacles hindering key objectives like optimizing capacity include familiar culprits: suboptimal technology (45.5%), disconnected processes (45%), inaccurate forecasts (40.6%), and visibility gaps (31.2%). Poor forecasting and the inability to adjust staffing in real time are leading to inefficiencies in resource utilization, while outdated data makes precise planning and confident decision-making almost impossible.
What our report also shows is that professional services decision-makers understand the need for change; the need to upgrade systems and technology is acknowledged as the biggest priority for the coming year. They know that overcoming these challenges will require adopting better ways of operating, investing in the right people, processes, and technology. Without agile, connected systems and reliable data, the kind of efficiency that today’s business environment demands will remain out of reach.
However, knowing there is a need for change and actually taking the necessary steps are two very different things. While many firms recognize that upgrading core systems should be a top priority, too often, they hesitate to act. Friction—whether in the form of legacy mindsets or organizational inertia—holds firms back. This results in a massive opportunity cost, impacting both today’s bottom line, and their future competitiveness.
This report highlights the key areas of opportunity for professional services firms to realize their full potential in the future. I believe passionately that this begins with a commitment to acknowledge the true state of the technology stack and the compelling business case for investment. Our goal with this report is to empower you with the insights and tools you need to drive meaningful change. The reality is that firms willing to make these investments will thrive—those that can’t embrace change will be left behind.
The time to wait and see has passed. It’s time to act. Firms need to stop relying on outdated systems and temporary solutions, and instead embrace technology as a driver of long-term success. Leaders must advocate for bold, forward-thinking investments that empower their teams and deliver better outcomes for their clients. Here’s to a more efficient, successful future, starting right now.
How Has Professional Services Evolved?
No company exists in a bubble and where an industry goes, so goes even the most successful company. What has changed in the world of professional services? Find out in the State of Professional Services 2024 Report.