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The State of the European Professional Services Market: Today’s Biggest Resource Management Challenges & Opportunities

The State of the European Professional Services Market: Today’s Biggest Resource Management Challenges & Opportunities

UPDATEDNov 16, 2023

by Lucy Butterton, VP of Product Management at Kantata, and David Anheier, Associate Partner at entero AG

Resource management is a challenging endeavour for any professional services leader, but operating in a dynamic European market adds another layer of complexity. In Europe, the art and science of maintaining the precise balance of team members needed to meet increasingly volatile client demand is complicated by an ever-evolving web of new legislation, shifting client expectations, and inter-country cost variances.

In order to better understand the current state of resource management in the European PS market, Kantata and entero AG recently held an Oktoberfest roundtable event at Salesforce’s offices in Munich, Germany, where a wide variety of professional services leaders from across Europe gathered to discuss their biggest resourcing challenges. Through insightful discussions and shared experiences, the event shed light on the ways in which the professional services industry is changing, and how companies can stay ahead of the curve.

Key themes resonated across our customers, with a great exchange of ideas that has helped us to better understand the resourcing challenges that are unique to Europe. These insights are helping to inform Kantata’s product strategy, ensuring we are able to innovate ahead of the pace of change in the European market. In this blog, we’re excited to share the top four resource management challenges we discussed in Munich.

1. Shifting Service Models

Clients across Europe are changing how they purchase services from companies. Long-term projects that are booked for months or even years are no longer the norm. Instead, clients are more interested in packaged services, which are centred around a specific deliverable instead of ongoing support. As such, the customer lifecycle is much shorter and less stable, meaning monthly income for a company is no longer guaranteed. Instead, many businesses are trying to string together a series of packages or keep their client pipeline constantly moving forward to avoid a lull in income.

To succeed, European professional services businesses must innovate to balance new projects with ongoing retainer work. Businesses that can extend packaged offerings to repeat services can create multi-year tenures for clients, which will make it much easier to build customer connections for ongoing work instead of constantly needing to procure new clients. Longer customer lifecycles will expand the client base and eventually result in a wider variety of work for each client that utilises the full breadth of your team.

2. Supporting Complex Work With AI

The amount of work required to balance the shifting priorities, legislations, and expectations highlighted in this blog threatens to grind any business operating in Europe to a halt. That’s why more and more companies are utilising artificial intelligence (AI) in their everyday work processes, automating critical work that would otherwise take up a massive amount of time in the daily work of valuable team members.

Creating resource modelling options, searching for resources using natural language processing, project reporting, invoicing, and providing diagnostics on team and project performance are all possible with today’s AI capabilities. These are all examples of tactics we heard our customers were employing to streamline the work it takes to navigate a dynamic European market, with participants in the workshop saying they were at varying levels of maturity when it came to widening their use of AI, including:

  • Securing the right in-house knowledge and skills through upskilling or hiring
  • Analysing existing data and processes for AI compatibility
  • Identifying viable use cases for for further use of AI

As suppliers like Kantata build more AI capabilities into their innovation roadmap in order to support these time-saving workflows, it will be important for businesses to think of AI as a critical source of support in an increasingly complex professional services world. Use AI to relieve the mounting pressure building up around those who are responsible for driving continuous success for your business and everyone within it.

3. Regulatory Compliance

The way professional services work is done is continually changing across Europe, and businesses need to always be ready to comply with new regulations, whether they come from EU legislation or legislation in a specific country. European working time directives are one example of legislation that continues to impact all industries including services firms, and employers must stay informed of changes and adapt accordingly.

When thinking about regulatory compliance, it’s important to think about more than just what it takes to comply, but also the implications compliance might have on employee engagement. At the same time as employees are becoming more and more in favour of flexible working, legislation around rest breaks and defined working hours can seem to run counter to that trend. How professional services organisations define and regulate work days of resources spread across Europe and keep their teams in compliance with legislation when necessary, often on an individual employee basis, will determine how well a business can grow.

4. Inter-Country Work Discrepancies and Cost Variance

European professional services organisations depend on team members resourced from across the continent. However, while shared resourcing is still a priority, there are major challenges with variances in cost base, language, skill sets, and more. In addition, countries don’t all define their work days using the same number of hours, with the UK working 7 hours while Belgium works 8 hours as an example. Having those sets of billable hours co-existing in one system can be a challenge.

In addition, workers in each country are commonly paid varying rates for their hours of work, which will be applied to projects across various countries. There is no harmonisation of cost base coming any time soon in Europe, meaning that companies will continue to need to bill their clients for projects based on many different employee rates cobbled together across many different daily working patterns. This can make accurate billing a major challenge and will require both a software solution and an experienced financial department to prevent costly mistakes that can lose both clients and employees.

And while many professional services organisations have aspirations to have locations in various countries that provide services across the continent, building a sufficient multilingual staff to engage with a rich diversity of languages across Europe is not easy. Travel has also not been re-established to the same degree as pre-Covid times, which presents challenges with cost bases as well as customer relationship management from afar.

To achieve the level of customer service that’s needed to succeed, businesses will need to maintain multiple teams with different working patterns and working hours. But is that sustainable for your business? Determining what’s right for your company and what you can truly sustain will define the future of your business across Europe.

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The challenge of maintaining professional services success in Europe requires a software solution purpose-built for the market. This is why the Kantata Professional Services Cloud exists – Kantata has helped leading organizations navigating the European market find new levels of success that previously seemed unreachable.

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