It’s the question every advisor dreads. A customer questions the value of a professional service team.
artificial intelligence tools are revolutionizing the traditional professional services model as clients expect more clearly defined and concrete commitments to deliver value before the project begins.
This approach places much greater emphasis on the service provider demonstrating that they are delivering meaningful results for their client.
This is extremely risky for a professional service provider. There are time and material costs, as well as costs to complete a project. But what if a customer doesn’t want to pay because he doesn’t like the result?
Redefine values
Redefining value in the age of artificial intelligence is quickly becoming a major strategic challenge in the professional services industry.
Clients believe that AI through IT automation is driving efficiency and cost savings, which should lead to lower bills for their consulting partners.
Of course, there will be scenarios where this is possible, but if the use of AI was only a matter of reducing costs, it would be a race to the bottom when it comes to commercializing services.
Every professional services company wants to avoid this scenario. That’s why it’s important to develop metrics that show how AI delivers a tangible return on investment.
What if you could empower customers to demand more by developing new systems unique to this industry?
What added value do you create?
I asked this question: “Now if you use AI to automate the services I buy, what value do you add as an advisor?” Arguably, the most effective answer is to show how artificial intelligence allows consulting firms to help their clients do things that their competitors cannot.
Specific metrics will be needed to demonstrate a company’s positive impact on a customer’s bottom line, but their definition is still evolving.
Just like in the early days of cloud computing, there was a lot of talk about how it would revolutionize IT infrastructures. However, it took nearly a decade to achieve standardized results and a consistent return on investment.
Create challenges
This poses a challenge for professional services firms today, putting pressure on client relationships at a time when companies are struggling to maintain revenue streams and find new growth.
But after spending time with industry leaders, I learned that following certain principles will allow successful companies to maintain strong customer relationships despite the disruption of AI.
1. Manage expectations: In any professional service organization, the mantra should always be “no surprises.” Explaining that a project will be late is the most difficult scenario to meet customer expectations. As AI drives the implementation team, there is a greater expectation that potential delays can be identified and avoided through predictive analytics.
2. Transparency: With all the questions surrounding the use of AI in professional services, transparency is the best strategy to maintain a strong customer relationship. Customers not only need to be sure that their data is protected, but they also want to understand how it is being used and trust the decisions that AI makes. This does not mean that customers have “access to all areas”, but understanding creates confidence in the added value offered.
3. Disciplined Delivery: If your AI deployment involves using an outcome-based delivery model, it’s important to avoid scope creep. This requires a disciplined approach to managing deliveries, ensuring that any additional requests are identified as outside the agreed scope and invoiced separately. It also helps manage expectations. If the customer and the delivery team work together effectively, there should be no surprises in the expected results.
4. Set the value: Customers must be able to see the added value for their business, whether it is increased productivity, cost reduction or new revenue streams. Companies stake their reputation on the knowledge and skills they can provide, as this gives them the certainty of achieving results. But when embracing AI, it’s important to show how completing a project helps customers do something better and impacts the bottom line.
5. Talents: To adapt to the effects of AI, companies need skills and experience that differentiate them from the competition. The days of the pyramid model of consulting expertise may be over, where small groups of highly qualified experts (think accountants or architects) lead teams of data and product management consultants who know how to use AI to effectively meet customer needs.
6. Economic model: Some commentators talk about cheap diamond or obelisk shaped models. Ultimately, AI should enable greater flexibility and responsiveness to customers. Therefore, to be successful, consultancies must ensure that they foster more dynamic and collaborative organizational cultures and operational structures.
the last words
From conversations with customers, it’s clear that companies across industries are still working to better understand AI and its importance to their future strategies.
It cannot be denied that companies looking to embrace AI will now have an advantage over their competitors, causing a reshaping of the professional services industry.
More importantly, the definition of value will change and therefore every business must be prepared to answer the question “What am I paying for?”
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