Organizations across all industries are under constant pressure to continuously evolve and adapt the ways in which they work – both internally and externally. The professional services industry is no different. In light of the current global pandemic and alignment to the Business 4.0TM framework, organizations have evolved at a rapid pace. This evolution has resulted in professional services organizations undergoing a major shift in the way that they develop, package, and deliver their respective services.
As an industry that historically relied upon billable hours as a business model, these organizations (particularly accounting firms) are beginning to evolve into product companies, changing this hourly business model into a more SaaSified approach – where cost per license will ultimately drive a significant portion of their revenue. With SaaSification, organizations will look at converting existing services into products and creating new products that capture significant implicit knowledge within the enterprise.
Benefits of SaaSification Beyond the Big Four
SaaSification would enable the professional services firms to tap into a revenue model beyond their employee’s work hours or output, which will allow them to monetize their knowledge. The ‘big four’ firms (PwC, EY, KPMG, and Deloitte) have decades of in-depth knowledge that serve as a differentiator – not only among the rest of the accounting community, but among one another as well. The natural evolution of business for organizations as large as these, in addition to their legacy of knowledge, is to move away from hourly billing and to package the knowledge into an interoperable, easily accessible, and hyper-personalized platform.
That said, SaaSification isn’t only beneficial to those larger players – as other organizations outside of the big four should be making this investment as well. Already at a significant competitive disadvantage against the big four in terms of size, the smaller firms should use their agility to move faster on the road to SaaSification in order to gain an edge over the larger firms, helping set the standard for what SaaSification can bring to customers, and potentially even pulling some of the market share away from the big four industry leaders.
How Will the Adoption of SaaSification Progress?
Most business model shifts are slow; however, the COVID-19 pandemic has put significant pressure on professional services firms to evolve rapidly. Revenue is down for a lot of firms, so they will need to act fast in order to remain afloat in many cases. No change is made overnight, and this is no exception for the organizations that work to develop SaaS platforms, onboard customers, receive customer feedback, and refine these platforms. Organizations will continue to see man-hour-driven revenue pull, and this process will shape and evolve the role of the agents as more customers buy into the SaaSification model.
The role of the human will not be removed outright going forward but instead will serve as an aid for customers, in tandem with the SaaS platform that they use.
More Than A Business Model – A Foundational Shift
Employee roles and processes are going to dramatically shift throughout the entire industry – from sales and service agents, to back-office teams and senior management, and more. Today, professional services organizations are hyper-focused on building and fostering relationships with individual customers. Through the years of working with said customers, there is a vault of knowledge that can be converted into reusable tools and capabilities that can be widely distributed through SaaSification. These organizations will need to look at how they can productize this knowledge and ultimately tailor these SaaSified services for their individual customers. To do this, they will need to reconfigure their business strategy, and the IT function must significantly evolve to assist businesses in providing a strong foundation to develop products at speed. Change management will be critical to get the whole organization aligned to a new way of working.
Again, there is a crucial ‘people’ element that will be required in order to maintain legacy relationships with existing customers. In fact, SaaSification will undoubtedly fail if that core customer relationship does not remain intact. Relationship managers will need to work hand in hand with IT teams in order to ensure that platform capabilities are reflective of customer needs across the board.
It will be fascinating to see how the professional services industry evolves in the coming years. The big four will have the upper hand, but only if they invest early and strategically. It’s important to note that investment itself is not enough. There are many ways enterprises may fall behind, even if they have invested in a SaaSified business model. There must be both strategic planning and implementation of SaaSification in order to successfully transition both customers and internal employees as enterprises make this foundational shift. Ultimately, those that do so successfully will thrive – and those that choose to rely on the legacy way of working will fall by the wayside.