Webcast Takeaways: Balancing Growth Objectives with Operational Efficiency - Unleashing Partner Productivity

This panel considered important aspects of the survey results during a webcast, moderated by Consulting Magazine's Director, Michael A. Webb, on July 11. The program was recorded and you may view this webcast on demand here.

Thanks and appreciation go out to our distinguished panelists for their time and insightful commentary on this topic.

• Clare Hart, CEO, Williams Lea
• John Norkus, Managing Director, Pricing & Commercial Excellence, KPMG
• Aaron Shagrin, Head of AI Strategy for Communications, Media and Technology Clients, Cognizant
• Brittany Sipos, Chief Operations Officer, Halloran Consulting Group

Our panelists engaged in enlightening conversation on the factors influencing budgeting and spending decisions for firms over the next 12 months as well as strategies firms are using to enhance fee-earner productivity, create operational efficiencies and secure competitive advantages.

"A commitment to life-long learning is essential to professional growth and success," said Clare Hart, panelist and CEO of Williams Lea. "This program was a great opportunity to learn what our peers and others in the consulting industry are doing to balance growth and operational excellence and it is clear that AI and smart tech investing are foundational to finding that successful balance."

What did our audience learn during this discussion? The following is a brief recap of some key takeaways from the webinar.

Survey responses showed AI is clearly taking up large portions of consulting firms' budgets: 85% of respondents cited AI as a top external influencer on budgeting decisions; and 63% cited talent acquisition, retention and development as key influencers.

What are the most critical budgeting and spending decisions for professional services firms over the next 12 months?

• Strategic investment in AI is important, specifically in sales and marketing (lead generation and expanding networks), retention strategies (learning and development), and technology (efficiency and scalability.)
• AI will likely serve as a helper rather than a replacement, with relationships remaining crucial in consulting; the speed and extent of AI's impact are uncertain, influencing firm's investment decisions as they assess its future developments and advantages.

"Where AI is concerned, it's unlikely that it will lead to replacing the bulk of firm resources,' said John Norkus of KPMG. "Relationships are, and will remain, the coin of the realm when we think about consulting in the near and even in the long term. It is people that are ultimately going to be making the difference here."

The survey also noted, that in terms of where leaders are looking to use AI, the top responses were focused on: Generating new data and insights into new processes; automating manual processes and; creating marketing materials and other sales collateral.

How are advances in technology influencing budgets and spending priorities at mid to large consulting firms?

• Technology is now essential for competitive advantage, but the focus needs to be on how much and how fast to invest, balanced against the challenge of not getting too far ahead of the curve.
• Clients seek guidance in productivity and optimization, which requires investment in and understanding of, not only the technology but new governance models, cybersecurity, and data protection – all of which heavily influence tech budgets.
• Many clients and firms have adopted a "crawl, walk, run" approach to find effective strategies, but balancing growth with efficiency remains challenging because of high expectations and persistent headwinds, prompting creation of new business models to effectively direct funds.

The survey asked which top 3 support structures have the biggest impact on fee-earner productivity: 71% said development and/or management of marketing and thought leadership initiatives, e.g. white papers, CRM/database, digital/video content, etc. The second two were expense management and client billing at 42% and 41% respectively.

How does the development and management of marketing and thought leadership initiatives impact the productivity of fee earners?

• One challenge is that saved hours–previously charged to clients for tasks like information collection–now raise questions about delivered value. Are clients willing to pay for this saved time, and do they appreciate the increased speed and quality? The value proposition shifts from a commercial perspective.
• Look to investment toward providing better products and services, shifting focus from hours spent to collective value, supported by strategically adjusted infrastructure.

What are some of the innovative strategies firms are using to elevate the performance of professionals dedicated to generating billable work?

• We are in the human capital business, the pricing challenge revolves around whether to charge per project or per person. Some may opt for a fixed project cost, with AI potentially speeding up delivery. However, if inefficiencies arise, profitability may suffer, and there is no definitive solution yet.
• Investment in people is important. Prioritizing skill development by training employees in AI technologies and cultivating domain experts who specialize in specific vertical markets can enhance appeal to those clients.
• Fee earners hope to be compensated based on the value they add to clients and ideally measured by shareholder impact; while the model isn't fully developed, technology presents an opportunity to move toward value-based compensation rather than just hours worked.

How is AI driving efficiency in data cleansing across consulting firms, making it easier to harness the power of data, as well as the information hidden within content and document management systems?

• Many are seeing success using models to analyze unstructured data (e.g., documents, contracts) from all departments – providing valuable insights, boosting productivity, optimizing operations, and reducing tech debt and costs.
• Substantial benefits can be derived from maximizing organizational knowledge, leveraging AI tools to summarize, tag and categorize documents, making it easier to find and use content, improving efficiency and reducing manual search times.

What are the primary support functions most reasonably considered viable for outsourcing, and what benefits can be gained from this strategy?

• Outsourcing elements such as presentations and PowerPoint production, and creative endeavors are the most likely to free up time for consultants to focus on building relationships, driving growth, and allow greater collaboration and efficiencies with other fee-earners.
• Areas such as administrative support, and expense accounting can also be strategic areas for outsourcing, and while they may not directly impact the consultant's time to the same degree, they can be critical in overall operations becoming less impactful on fee earners' day-to-day involvement.
• Outsourcing assets that can deliver accuracy, quality and trusted turnaround times can become an invaluable factor in increasing firm margins.

If you were unable to attend this recent event, you may go here and follow the instructions to view this webcast on demand.