The Top 5 Project Management Challenges the Professional Services Industry is Facing in 2024

In the realm of professional services, project management has always posed a challenge, no matter how experienced managers and their teams are. There are so many factors to consider – project managers need to consider how any decision they make will impact the project budget, the timeline, the scope, the satisfaction of the client, and the satisfaction of the team working on the project. It’s a lot to balance.

And project management is only getting more and more complicated over time. As the technology, processes, skills, and client demands related to project management become more complex and continue to shift over time, project management challenges continue to evolve in unexpected ways.

This means that it is crucial for leading professional services organizations to understand and anticipate the biggest project management challenges heading their way.

To that end, Kantata recently commissioned S&P Global Market Intelligence to research the biggest challenges currently impacting professional services organizations. The resulting report, “The Macro Technology Shift Impacting the Professional Services Industry,” looks at responses from over 200 professional services leaders, analyzing what they’re experiencing and where the industry is going.

The Top 5 Project Management Challenges

S&P’s research revealed that while there are several different forms of friction impacting the way professional services firms work, none are as wide-ranging as the friction surrounding project management processes. Here are the top five issues respondents identified:

Challenge #1: Combining Scale and Agility in Portfolio Management

Managing one project is hard, with a complex set of hand-offs across teams impacting important client and financial goals. When you consider the number of projects any professional services organization is running simultaneously across a complex portfolio of service offerings and clients, it’s no wonder portfolio management is cited as the top project management challenge. According to S&P, 53% of respondents stated they struggle with combining scale and agility in their company’s portfolio management processes. In essence, portfolio managers need to make lightning-fast decisions across a growing portfolio of client engagements, understanding what to prioritize to deliver the best results. Without the right technology, decision-makers are prioritizing next steps in the dark, either missing crucial information about certain projects or slowing down to search out the information they need..

The Solution: Portfolios need to be managed in a purpose-built solution that gives managers the ability to see both their entire portfolio at a glance and deep dive into any project or client within it at ease. Clear vision, easy access, and detailed management are crucial for taking on more clients without sacrificing flexibility.

Challenge #2: Standardizing Delivery Methodologies

For 44% of PS leaders, standardizing the methodologies used for project delivery is an issue. When businesses face this challenge around standardization, not only is every project more labor-intensive to create and start – service delivery is also more unpredictable, with projects bringing unanticipated surprises that can easily catch project managers off guard. Unstandardized delivery methods lack quality control, resulting in major fluctuations in what clients receive from a company’s work. In the end, if inconsistent service delivery means that neither the business nor the client can correctly anticipate the quality of the project, then the company’s future is in doubt.

The Solution: Standardizing project templates within a dependable project management solution and having a defined series of quality assurance checks both throughout the project and before delivery means that projects can be easily replicated, with weaknesses removed on replication and strengths emphasized.

Challenge #3: Adapting to Fluctuating Client Needs

Many PS leaders say keeping up with the ever-changing needs of their clients is a challenge – 39% of respondents in S&P Global’s research identified this as an issue. Clients changing their demands for a project, sometimes mid-project, is nothing new in the world of professional services. But as client demands and project deliverables are becoming more and more complex, it becomes that much harder to stay ahead of client needs. When portfolio managers end up on the back foot, reacting to client needs rather than proactively monitoring scope creep and client sentiment, it can lead to more fire drills, with team members caught in a fire-fighting mentality that disrupts project timelines and budgets. When companies can’t anticipate and adapt to changing demands, it becomes easier to disappoint an important client.

The Solution: While clients may change their demands mid-project, these must comply with an official and strong Statement of Work, with any changes to the agreed-upon project scope needing new documents and changes in cost. Beyond these changes, having a client success team that maintains good relationships is crucial for PS companies that stay in demand with their audience.

Challenge #4: Managing Project Margins

For PS businesses, profitable projects are key to sustainable success. Yet, 39% of PS leaders say they struggle to successfully manage project margins across their project portfolios. This often stems from difficulty in both accurately anticipating the associated cost of completing projects and keeping projects on track with agreed-upon work. When teams cannot accurately define the cost of every task within a project and when they are unable to prevent scope creep when working with clients, projects inevitably experience costly margin erosion and revenue leakage.

The Solution: Project managers often lack the insights they need to manage project finances responsibly, leading to inconsistent performance against margin expectations. To combat this, adopt a project management solution that doesn’t just manage tasks and deliverables in isolation, but makes the financial impact of every decision – a resource change, an extension, a new task line item – clear.

Challenge #5: On-time Project Delivery

With every other major challenge on this list impacting project processes, it’s no surprise that delivering a project by the promised due date is a major challenge for many professional services organizations, with 39% of PS leaders saying it’s a common issue. The findings of S&P Global’s research show that, for too many organizations, not enough projects are meeting essential budget, quality, and timeline goals. Only 47% of PS leaders have more than 70% of their projects meeting those goals, and for more than a fifth of PS leaders, the majority of their projects fail to live up to those standards. Resolving these issues and enabling more consistent achievement of project goals will require both better project planning and better project execution. Too often, projects are sold with unrealistic timelines and at unrealistic budgets in order to “make clients happy”. But this usually backfires. When a project misses its agreed-upon deadline, clients are often frustrated, doubt the capabilities of a PS firm, and are much less likely to return for future projects.

The Solution: Reviewing similar past projects and learning from their successes and failures in meeting deadlines can help you create attainable project timelines in future projects. Understand what held past projects back, and what took more or less time than projected, and use dependable project management solutions that leverage powerful tools such as Gantt charts to build and execute against robust project plans that make sense.

Leave Your Project Management Challenges Behind With the Kantata Professional Services Cloud

As the findings of S&P Global’s report show, project management can be challenging. But overcoming common project management challenges and driving consistency, agility, and adaptability in client service delivery is instrumental in enabling PS organizations to thrive in an unpredictable market. This is why the Kantata Professional Services Cloud was created. Learn more about how our purpose-built solutions are equipping businesses like yours with the insights they need to elevate business performance and delight clients with project delivery.