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Digitization of professional services companies

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Unlike the industry where the product is tangible, the professional services cannot be physically experienced. In this case, the „product” is a solution that brings value to the client only when implemented. The promise of achieving the looked-for results is the warranty certificate, the customer being part of the information exchange to implement a solution that comes at a cost and whose results cannot be seen immediately.

In addition to this traditional challenge comes the process of digitization, as technology is increasingly transforming professional services. The emergence of blockchain is an even more convincing proof of change. The future of this industry will depend on how industry leaders will manage the change that digitization produces.

Relevant to understanding the way leaders of the professional services industry in Romania picture the digital transformation of their companies is the study “The Barometer of Digitization in Romania”, conducted by the consulting company Valoria. Some relevant aspects from this study are the following:

  • 64% of companies in the professional services industry have been greatly influenced by digitization, while 72% of respondents say they are confident and have the necessary knowledge to capitalize on digital transformation and only 18% say they are somewhat confident that they will capitalize on this trend.
  • 7 out of 10 respondents in the professional service industry say that the digital business models have changed the industry to a large extent. Moreover, for 82% of the companies in this industry, digital business tools, channels and/or models are a central component of their business strategy. In this context, many companies are confident that they have the knowledge to compete with digital business models.
  • 48% of the professional service companies say they have given top management responsibility for the digital development of the business, while 19% say they are considering such an approach over the next 12 months. On the other hand, 67% of companies say they have capitalized on digitization to have a competitive edge. It may be understood that there are companies that, while not giving the responsibility of a top management leader for the digital development of the business, have capitalized on digitization to have a competitive advantage.
  • Excessive costs, lack of “digital” consumers and resilience to change (44% each) are the three main obstacles preventing professional service companies from capitalizing on digitalization. While the top three benefits of the digital transformation over the next 5 years are estimated to be cost reduction (72%), process simplification (72%) and operational efficiency of the company (39%).
  • From the perspective of the professional service companies, the main digital products/services they plan to utilize to generate 10% more revenue over the next 5 years are the Internet of Things (72%) and the intelligent operational management systems (67%).
  • 41% of professional service companies expect the digitization to increase the company’s profit margin by 5%- 10% over the next 3 years, 58% to increase their turnover between 5%-20%, 24% to increase their number of employees between 1% -5% and 35%. Most of these companies expect that digitization will contribute to the total market value of the company between 10% -20%.

Professional services are an indicator of the sophistication of a country’s business environment. These days, the companies in this industry are experiencing a period of expansion because of the spread of digital technologies. The implementation of these technologies depends on the level of competitiveness of each company in this industry. But the implementation of digital technologies takes place in several steps, from strategy, budget allocation and selection of the relevant digital business tools, channels and/or models, to deployment and skills training.

The professional services companies in Romania are “compelled” by their clients’ demand to offer digitized services. If they do not, their credibility is at stake because new digital business models emerge in this industry sector, with new companies that offer faster and better services at lower prices.

Author: Alina Făniță, Managing Partner, PKF Finconta

Foto: Pixabay.com
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