Business and Professional Services

#Services GameChangers

New business imperatives and their talent implications for the world's premier service firms.

Our Services GameChangers report draws on conversations with senior leaders from across the global business and professional services industry in Europe, Asia and North America.

It provides a unique, 'outside-in' perspective on the changing client requirements, business imperatives and organizational dynamics of some of the world's leading business and professional services organizations over the next three to five years – and their implications for attracting and retaining top talent.

With thanks to the following GameChangers:

Roger Dassen, Vice Chairman Risk, Regulatory, and Public Policy, Deloitte Global (Netherlands)

Kevin Lynch, Chief Strategy Officer, Aecom (USA)

Miles Everson, US Advisory Leader, PwC (USA)

Keshav Murugesh, CEO, WNS (India)

Sander van ’t Noordende, CEO Products, Accenture (USA)

Thomas Reichert, Chairman North America, The Boston Consulting Group (USA)

Prithvi Shergill, CHRO, HCL Technologies (India)

Jin Yu, Managing Partner China, McKinsey (China)

Understanding new client needs

As clients globalize and become more complex, they expect ever deeper and longer-term commitment from their business and professional services providers to help navigate a rapidly-changing business environment. They increasingly want their advisors to share in the risk and rewards of their businesses, to be accountable and to share their social missions.

What do your clients need?

Business and professional services organizations need to help their clients to continually enhance capabilities, collaborate better internally and ensure compliance is fully embedded throughout the organization to meet demanding regulations.

Jin Yu, McKinsey:
“The fundamental need to solve problems is not changing but problems are getting bigger and more complex. A lot of work now is to build institutional capabilities to deal with the increasingly complex and fast-changing business environment. Some of the capabilities include organizational agility, strengthening DNA in innovation, big data analytics and digitization and new leadership quality.”

Thomas Reichert, BCG:
“Many of our clients’ organizations need to be simplified. Really they need to build in more collaboration than rules-based management approaches in order to be nimble and fast, and that is quite difficult.”

Roger Dassen, Deloitte Global:
“Our society calls for more regulation in order to deal with major risks. We are positioned to help companies with these regulatory challenges. With many Deloitte clients, compliance used to be a department, but going forward compliance will need to be fully embedded in the organization.”

Organizations are challenged to really understand the needs and dynamics of their clients’ customers. Developing individuals in a client’s organization to equip them with the right skills after the consultants are gone is key for continuing success. Clients choose to work with organizations that can foster in-depth relationships with them and are demanding more skin in the game as well as commitment from their adviser’s leadership.

Kevin Lynch, Aecom:
“Clients expect us to be conscious, moreover engaged in the same social missions that they are engaged in. They want us to stand shoulder to shoulder with them.”

Prithvi Shergill, HCL Technologies:
“Clients are expecting accountability beyond the written contract. They want to see impact on business outcomes and proactive value add. Innovating as per the unique needs of the customer is important and clients are demanding more personal time from the leadership.”

Thomas Reichert, BCG:
“A big topic is what we call enablement, an offering and demand where we don’t just come in and do projects or longer programs, but where we develop people within our client’s organization and we step them up to have skills going forward that they can then execute when the BCG teams or the consultant teams have left the organization.”

Jin Yu, McKinsey:
“There is an increasing need from clients for true partnership in multi-year journeys of transformation, not only to architect the journey but to work with them in driving the implementation.”

Organizations advising the world’s largest enterprises need to provide a global and consistent service offering. This is a big challenge, especially for the big 4 networks which have traditionally been structured on a country-by-country basis.

Sander van ‘t Noordende, Accenture:
“Clients need to be ever more competitive, work smarter, work more efficiently, faster and more global. Professional services firms need to help clients attain those goals.”

Roger Dassen, Deloitte Global:
“Deloitte clients are becoming more and more global and they expect truly global and consistent service. This means Deloitte needs to be able to deploy people where they can add the most value.”         

With technology seemingly advancing at the speed of light, clients seek help from professional services organizations in understanding how this can transform business models.

Thomas Reichert, BCG:
“We clearly see a much bigger demand across the broad use of technology and by that I mean, how does technology really change our clients’ business models? What is the threat to the market? What is the linkage between technology movements and business models?”

Keshav Murugesh, WNS:
“Disruption in business process outsourcing is being driven by technology and by the blurring of boundaries between industries. Take banking for example – branch networks have shrunk and transaction volume has still gone up. Banks are now an integrated enterprise and digitization is a big thing here.”

Prithvi Shergill, HCL Technologies:
“Clients are demanding new technologies and there is a material shift in the workforce mix – we need more on-site than the traditional offshore. There is a higher demand for digitization of services and for industry specialization. Apps, BPO and infrastructure are merging, especially apps and infrastructure, and this will become ‘IT operations’ over time.”

The digital journey

As digital technology enables business to be conducted anytime, anywhere, at unprecedented scale and speed, it creates both new client needs and models of service delivery. Digital is increasingly seen as a key element of every engagement, creating opportunities for business and professional services organizations to develop unique intellectual property around digital tools to improve service delivery.

At the same time, organizations need to manage, monitor and respond to new risks, such as cyber and privacy concerns. New technologies not only require new capabilities, but integration across business models and, increasingly, new alliances with external parties to leverage digital expertise.

What are the implications of digital on your business?

Technology is clearly the most pervasive trend which will impact the global economy over the next few years. The implications and opportunities are unprecedented.

Roger Dassen, Deloitte Global:
“By technology, I mean a wide variety of things, including social media, big data, robotics, and the ability of machines to understand human language. The implications are huge and will ultimately mean a different way of providing services to clients.”

Sander van ‘t Noordende, Accenture:
“Digital is a tremendous opportunity. Digital means many things to many people, but certainly includes e-commerce, social media, cloud, mobility and analytics. Particularly when you combine some of these, clients can do things at a scale and speed which is unprecedented.”

“The internet of things isn’t just hype, but a huge opportunity, although it’s still in its infancy. It allows product companies to offer services as opposed to products. This means they go from a transactional way of doing business with their customers to a real relationship and partnership. It probably involves working together with other providers as well to come up with the complete solution.”

Prithvi Shergill, HCL Technologies:
“A lot of conversations about digital technologies are happening about the ‘frontend’ impact but there is a growing realization that clients need to look at digital systems integration across the digital data fabric, applications modernization and analytics as these are the fundamental building blocks to these new technologies transforming organizations. Digital transformation is about investing in front end, customer management operations as well as about how technology applications need to be built and run using cloud, mobility, analytics and enabling social collaboration. That is the opportunity for us.”

The integration of digital and other technologies is fundamentally changing professional services business models. It will transform the way organizations deliver their services and require them to build new relationships with strategic partners and clients.

Kevin Lynch, Aecom:
“There is no question we are in a transitional stage of service and solution delivery as well as the associated business models. You’re going to see some level of standardization emerge, but also some level of unique IP that’s created around those new tools and capabilities. On the digital front, we weren’t early adopters, yet we are now starting to see it as a more pervasive aspect of our operations. It’s going to change our space dramatically. By way of example, when you’re building a structure like the World Trade Complex, you’re involving a whole array of talented professionals from diverse talent pools and socio-demographic backgrounds. Using the right technology enables us to deploy effective and efficient teams, with substantially simpler means of scheduling, deployment, prioritization, issues resolution, and overall project management. The huge rise in the use of sophisticated tools will not however shift the foundational element of our business, which is delivering fantastic work, with leadership and accountability.”

Roger Dassen, Deloitte Global:
“Decision-making will be even more fact-based. The way professionals are supported will be very different. For instance, legal professionals will be able to ask specific questions in plain English, or any other major language, to large databases. Professional services organizations are expected to work with external parties even more, both to leverage the required capacity, but also get access to the required skills. Especially in Deloitte’s consulting businesses, professionals around the globe will need to collaborate with clients on core issues even more. Technology will facilitate this. This means Deloitte needs even deeper knowledge of what’s happening in the capillaries of our clients. Five years ago, Deloitte had a handful of strategic alliances; today, we have hundreds of strategic relationships worldwide, and in five years we expect to have thousands of them.”

Thomas Reichert, BCG:
“One big change is the integration of digital and broader technologies in the day-to-day business models of our clients as they exist today, like channel integration, better customer information, better integration across the supply chain, you name it.”

Jin Yu, McKinsey:
“The impact of technology and digitization is profound. For our clients, it means disruptive competition from non-traditional competitors. It also means the imperative of fundamentally changing the way they work, not only in the front end, but also in how they operate internally. We are also continuously digitizing ourselves to enable new ways of working and accelerated knowledge sharing and capability building.”

Transforming conventional business models

Ease of access to consultants and information in a digital world is changing the way clients seek advice, lowering barriers to entry into some markets and creating new forms of competition. Intellectual capital is increasingly available to clients with little human interaction.

Against this background, organizations need to demonstrate how they add value to their clients beyond the sum of their constituent parts.

These trends are creating new alliances to help deliver end-to-end solutions for clients and enhance advisers’ ability to develop innovative proprietary tools. This is likely to fuel the trend towards further consolidation across many sectors. The winners will be those that adapt their business models fastest.

What is changing in your business model?

The most successful organizations will be those that can adapt to change faster than their competitors. With lower barriers to entry and greater transparency, an organization’s intellectual capital will be key to standing out from the crowd.

Sander van ’t Noordende, Accenture:
“Some competitors will argue that clients will want to pick individual consultants, who they can find on the web. This creates greater transparency and fee pressure. Will this happen in the future? Answer: a hundred Accenture people in a team are much more effective than a hundred freelancers in a team, not just because we have the client relationships, but also we know how to run major programmes, how to deliver and how to get things done.”

Miles Everson, PwC:
“If you’re a partnership, as opposed to a public company, your investment duration can be more long-term because you’re not fighting for that 90-day earnings release. That’s not unique to professional services, but our time horizon can be longer. So in that sense, I think that the partnership model is favorable to a corporate model.”

Kevin Lynch, Aecom:
“Engineering and construction is an industry marked by sizeable global players, and a wide array of small geographically or technically focused firms, reasonably defined as fragmented today. There is clearly a trend underway of consolidation. There are some small, niche players that participate in very narrow areas with deep expertise and we think there’s still room for them in that consolidated future; however, there are more firms in a seeming chasm between the niche and those with global scale, that will likely have insufficient talent, resources, and reach, to serve on major global infrastructure needs, and as a result likely won’t exist in the future.”

Fostering partnerships and alliances is critical in enabling professional services organizations to access new capabilities and intellectual property to develop multifaceted solutions in response to changing client demands.

Jin Yu, McKinsey:
“We’re working beyond the traditional areas of strategy, growth and cost reduction. There’s a lot of emphasis on leadership development, capability building and technology disruption. We have been introducing new service lines to enable us not only with new capabilities but also new ways of working with our clients.”

Sander van ’t Noordende, Accenture:
“New technologies require new capabilities. Accenture started investing in digital six or seven years ago and has made acquisitions in all these digital areas. Accenture has also formed new alliances, not just with historical partners such as SAP, Microsoft and Oracle, but also with new partners such as, Redhat and Work Day. We also make acquisitions, such as Fjord, a company specialising in creating digital experiences in services.”

Kevin Lynch, Aecom:
“I think there’s a different market demand today in the value chain for firms. In our markets, we believe the capability to participate in the design, build, finance, and operate stages of civil and social infrastructure projects, or a full solution or value chain perspective, is a key and critical differentiator. That necessitates scale and balance sheet strength as requisite elements of competition. We see a shift away from hiring a dozen unique firms to do an array of things, towards hiring one large integrator that can bring all those skills together and deliver an outcome.”

Prithvi Shergill, HCL Technologies:
“We remain acquisitive and continue to explore possible targets. The acquisition would be driven by the objective to further build on our existing service offerings.”

Services organizations are increasingly faced with a challenge from nontraditional competitors. Focusing on and keeping ahead of the curve is key.

Thomas Reichert, BCG:
“We’ve set up a separate business called BCG Digital Ventures, which is much more focused on how we create something innovative, disruptive, new; that’s very focused on innovating a particular business idea and then getting it to market through product development and commercialization.”

Jin Yu, McKinsey:
“We’re facing competition from non-traditional competitors, especially in internet and technology. We’re working beyond the traditional areas of strategy, growth and cost reduction. There’s a lot of emphasis on leadership development, capability building and technology disruption. We’ve introduced a new service line called Restructuring and Transformation Services to better utilize non-traditional assets.”

Organizational change

Many of the major players in the business and professional services landscape recognize the need to expand their service offerings by bringing together a range of capabilities and diverse skill sets, regardless of where the work is delivered.

This demands new approaches to global mobility and career development. It necessitates new thinking on the most effective way to bring together the right blend of local and remote resources to deliver projects ‘on the ground’.

This in turn will have huge implications for organizational hierarchy, career progression and succession planning.

What is changing in your organization?

Organizations face the challenge of bringing together the different skill sets required within a team and delivering their combined skills seamlessly ‘on the ground’ across the globe.

Thomas Reichert, BCG:
“The teams that are doing multi-channel are collaborating with our technology experts and data scientists to be able to bring enhanced digital capabilities to our clients. This has allowed us to expand our offerings. I am less concerned that every consultant has every skill, it’s the combination of diverse skills and the delivery of them worldwide that is so powerful.”

Kevin Lynch, Aecom:
“Our imperative is supply and demand related. We have to acquire, combine and deploy outstanding, technically capable talent, delivering a wide array of skills and services, globally. To do that, naturally we must master global mobility and recruitment. Above and beyond that, we must master leadership development so we can continue to grow and matriculate the talent needed to best serve our clients, with the challenge that our markets are in 150 countries.”

Professional services organizations need the flexibility to deliver services to their clients from different global locations in response to changes in national and regional business environments.

Miles Everson, PwC:
“We want to be able to deliver 40% of our services by not being onsite with a client. We want to be able to deliver those remotely, and then we’ll adjust the business model to wherever it makes sense at the time, but you need to be very agile in the ability to move that work. If we get shut out of a country tomorrow, and we have to close down our delivery centers because of taxation or foreign ownership control issues with the government, do we have the ability to move 4,000 jobs into other centers in 60 days? In my opinion, that’s what we need to be able to do.”

Prithvi Shergill, HCL Technologies:
“We need to be organizationally prepared to construct, sell and deliver and grow the footprint we have at our clients across all the lines of business we have and ensure the client experiences us as a single integrated entity offshore, near-shore and on-site.”

Changing talent requirements

Human capital remains the key to creating competitive advantage in business and professional services.

Global mobility, diversity of background and skills, strong industry-specific and client-specific knowledge and the ability to recruit tech-savvy agents of change with the right balance of competencies, are increasingly viewed as prerequisites to success in adapting to changing client needs.

These requirements are having a dramatic impact on where talent is recruited, and how it is developed, rewarded and retained at all levels within an organization, including what the boardroom of the future will look like.

What talent requirements do you have going forward?

Traditional distinctions between business functions are breaking down. Firms will need to access talent from a wider talent pool to find the right mix of skills to drive innovation in their services.

Keshav Murugesh, WNS:
“We will need a lot of new talent that is able to make calls on the future – right or wrong but make calls nevertheless. Cost arbitrage was important 20 years ago, then domain specialization came five years ago and this is the third inflection point.”

Prithvi Shergill, HCL Technologies:
“We do not define our hiring plans by source or nature of employers – we look for functional expertise and ability to listen, collaborate, create and ideate. As business outcomes become important, there will be a higher demand for people who can consult and provide integrated technology solutions. People who know what the CXO is looking for will be vital and this may be from outside the industry or inside. The key lies in how effectively organizations define their needs, discover, develop and deploy talent, as this will be the main differentiator to set them apart from competition by delivering innovation and value to gain a competitive advantage.”

Roger Dassen, Deloitte Global:
“The specialists who protect their domain knowledge within an organization are doomed to fail. It will become increasingly pivotal for future talent to be able to network, be vulnerable and transparent in an organization in order to be successful.”

With digital so critical to the future success of their businesses, professional services organizations will need to meet the challenge of recruiting technologysavvy individuals who are also able to demonstrate the business know-how to effect change.

Keshav Murugesh, WNS:
“We need more thinkers than doers but these thinkers must have a strong technology orientation so revenue stream is sticky.”

Thomas Reichert, BCG:
“The technology expertise we are hiring in various career paths is partially into the mid-level consulting path, partially into more expertise-based roles, and partially in separate types of companies like our Digital Ventures set-up and a few others. So there are different homes in BCG for people who have more industry knowledge or other expertise-based skills. Historically we might have put a lot of emphasis on analytical capabilities and interpersonal skills; we are now looking at those plus the ability to work with an organization, to take ideas and analysis and actually get the change embedded in the organization.”

Talent with technology and business acumen will be increasingly high