From the 90s to Now: Why Adaptation is Key for Professional Services Organisations

Editorial Team
Editorial Team
From the 90s to Now: Why Adaptation is Key for Professional Services Organisations

So, your business is doing well, service engagements are at a peak and the margins look healthy. It couldn’t, you feel, be better. The economy is recovering and the professional services arena is the place to be.

Believe it or not, however, there has never been a more urgent need to change. Have another look at that introductory paragraph and imagine it was written in the mid-1990s. That business in the 90s could have been doing well but it would have no conception of analytics, or big data, just as technology wouldn’t allow for it to deploy its resources in a truly project-oriented manner.

But let’s say the business made it to the 2000s, with forecasts of expected growth. This wouldn’t have happened by sheer accident – it would have required strategy, technology, a successful operational infrastructure and, more importantly, a move forward into the modern world.

Without a progression into adopting new processes or seeking financially beneficial opportunities such as M&As, this 90s business would have been killed off within a few years of conception. 


So what can we learn from companies who successfully transitioned throughout the 90s and how can that apply to your business of 2015? You need to constantly adapt. What can a project-oriented organisation of today do to stay nimble?

In a recent survey by Forrester Research, A Guide to Profitably Winning and Delivering Projects for Project-Based Businesses, Forrester explains how complacent firms who expect margins to remain stable and still do not adapt to the changing market place are struggling to win new business or even recruit.

It’s obvious then that continuous movement is fundamental for continuous improvement. Making sure your business is fluid and prepared to evolve to the ever changing needs of clients is key to success. In order to achieve such a structure and platform for exponential growth, there are some systematic steps that Forrester highlight as imperative to implement within your organisation:

1. Sharpen targeting

Forrester says that most project firms win fewer than half of the tenders they enter, and the most challenging element is matching skills to client requirements. Sourcing and matching the right skill is a core competency for any service firm worth its salt.

2. Recruitment and retention

Having the right skill set is another area in which many businesses need to move. A massive 45 percent of project firms regard hiring and retention as the first or second most important factor in project execution. Whether this is through a better recognition of the skill set required or through better management and better incentivising the employees, getting and keeping the right people is key.

3. Time and expenses

Recording and reporting is paramount to ensure the continued profitability of your business. Fortunately, this is much easier than in the 90s as project-based ERP allows you to record time and expenses more efficiently. All data can be applied to individual projects and clients for more accurate billing. This will give you a competitive edge as you can produce more accurate tenders for clients. It also has the added advantage of centralising all internal data for improved resource management, leading to better profit margins.

4. Difficulties with billing and revenue recognition

With improved data, as mentioned above, you should be able to bill clients more accurately.  However, according to Forrester, “only 20% of leaders recognise that the complexity of engagements will consequently increase the ratio of unbilled WIP unless something is done to improve billing processes”.

With that in mind, after a recession as severe as the one the world has gone through, it’s easy for clients to slip into an expectation that their service company will offer extras unpaid as a matter of course.

Although you can’t give away your services entirely for ‘free’, they can be built into a business plan as long as you’re clear what extras each client receives – including the fine details, such as the agreed time spent on said extras – and are monitoring the actual cost efficiently.

5. Innovations

Comparing a Professional Services business of the 1990s to your business today will show that innovation happens all the time and a good business will take advantage of this.

The shift from analogue to digital in the late 90s was a major transformation which is now driving a move towards new business models and ways of working, so it’s key that you establish a process of evaluation.

Looking at what is new in your business sector and deciding whether or not it’s right for you is an important facet of your business, as is developing innovations of your own. The Forrester report shows that many organisations are not in a position to make these innovations, with only only 26 percent of project firms claiming to be capable of generating an accurate profit or loss statement.

For the remaining 74 percent of firms, this suggests a poor grasp of project and resources, usually the result of deploying the wrong IT solutions – a worryingly high figure!

6. Mergers and acquisitions

Another significant change to take advantage of is that mergers and acquisitions are on the increase. Your business may be better off working with rather than against another company but consider this carefully as you don’t want a disruption to your internal infrastructure.

Research from media and education specialists Pearson indicates the reasons why so many acquisitions sadly result in failure vary from a misunderstanding of the new business, a flawed deal management or a failing in the integration. However, with a clear and aligned outlook on objectives and projections along with the right tools to implement integration without disruption, the success to be reaped from mergers and acquisitions is huge.


As companies who successfully adapted throughout the 90s and 2000s have found, moving at the same rate as external factors – such as digitisation or industry growth – is crucial.

Professional Services companies need to ensure their internal processes are developed in the right way which is where specialist project-based ERP comes in. With the capability to efficiently record and report on time, expenses, billing and resource management, project-based solutions that fully integrate all aspects of the project lifecycle ensure your firm is forecasting based on correct historical data while staffing projects with the right resources.

Our aforementioned 90s business, although operating at a successful rate, wouldn’t have achieved much without the instinct to adopt and embrace changes in the marketplace. The moment you feel comfortable within your current setup and operations, there’s never been a better time to change and lead the way into the next era.

Written by Stefan Grahn, VP, Deltek Nordic

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