TL;DR
Optimizing a professional services business during economic uncertainty requires greater operational transparency, more accurate resource forecasting, and clearer business priorities. Disconnected processes and technology, limited visibility into workforce capacity, and reactive decision-making can make it harder to control costs and protect margins. Addressing these challenges helps businesses improve predictability, align resources with demand, and stay focused on customer and employee needs.
Key Takeaways
- Economic uncertainty makes it critical for professional services firms to control costs, protect project margins, and make proactive decisions based on accurate operational insights.
- Disconnected technology, siloed data, and inconsistent processes limit business transparency, making it harder for decision-makers to identify performance gaps and respond to changing conditions.
- Effective resource management requires aligning workforce capacity with demand, identifying skill gaps, and improving forecasting accuracy to support more informed staffing and investment decisions.
- A Kantata-sponsored Resource Management Institute survey found that half of businesses cannot accurately forecast resources beyond two months, compared with a six-month best-practice benchmark.
- Clear business priorities help professional services organizations move beyond reactive decision-making, balance customer expectations with employee needs, and maintain focus during economic uncertainty.
By Banoo Behboodi, Vice President of Advisory Services
These are uncertain and unpredictable times, something I see every day as I work with professional services businesses in my role on Kantata’s Advisory Services team. No one knows exactly what lies ahead, but business leaders are already changing their behaviors, and their plans, based on a high degree of confidence that there is turbulence ahead.
Recently, I helped kick off a four-part series of LinkedIn Live events alongside Kantata’s Managing Director of Marketing Service & Agency Practice Brent Trimble and Brand Evangelist Charles Gustine. These sessions are designed to provide insights into ways professional services businesses can prepare themselves for whatever the economy has in store.
This first session, How to Optimize Your Business During Uncertain Economic Times, discussed how businesses are facing cost pressures as they fight to preserve margins and why now is the time to be proactive by aligning your IT spending with business priorities, nurturing your existing customer base, and optimizing your resources.
The following is just one of many topics we covered in the LinkedInLive session – click here to watch the entire session recording.
What are some of the biggest challenges PS firms are grappling with right now?
This was one of several questions posed during the session, and in my own experience and in my interactions with clients working to succeed in the industry right now, there are three critical challenges standing in the way of optimization.
The first challenge is creating transparency throughout your business.
Handling cost pressures and having much better control over your margins is critical in a recessionary climate. But having transparency into and across your business operations down to the point of having actionable detail is difficult for many organizations, and we commonly see a lack of transparency holding back performance when we interact with professional services organizations. That usually comes from having both disparate processes and disparate technology that create siloed ways of working. Getting timely, accurate insights to decision-makers so that they can be proactive instead of reactive is not always possible in those situations, and where it’s not teams are left to make decisions based on their gut (or worse, not make any decision at all). This is why it’s so important to find and address the blind spots, data silos, and process gaps that hold your business back and limit predictability.
The second challenge in professional services today is resource management.
Professional services organizations are trying to understand how to better predict demand for their resources and make sure their workforce capacity is aligned with that demand. A recent Kantata-sponsored forecasting survey with the Resource Management Institute highlighted that half of businesses cannot forecast resources accurately beyond 2 months, while best practice forecasting accuracy according to RMI should go at least 6 months out.
Having the tools and the process to know where your demand is, where your capacity can fulfill that demand, and where you have skill gaps and how to fill those gaps most cost effectively is a challenge we see in a lot of businesses – one that needs to be addressed for your business to stay ahead of demand.
The third challenge is lack of focus.
Part of this comes from the fact that companies are sometimes very reactive. When you’re responding to chaos, you’re often going in too many different directions. Having focus and prioritization around understanding and responding to customer needs, your colleagues’ needs, and understanding how to put your colleagues in a position to respond to customer needs while also advancing their careers and ensuring they are content and happy with the job they have is critical for professional services.In services, your talent and your workforce are your lifeblood, and I don’t think businesses are always focused on this.
I thought my Professional Services Pursuit podcast co-host Brent Trimble put it well when he added that it is time for every professional services organization to create rigor, measurement, and insight in their business. If you can’t currently forecast resource needs or project revenue accurately beyond 2 months then it is important for your business to work to obtain that foresight and predictability. It’s evident that in a time of uncertainty, our decision-makers need that illumination on the best path forward for the business the most.
Optimize Now and Continue To Succeed
In this time of economic uncertainty, it’s critical to take steps that strengthen your business so that you’re in your best shape to weather potentially unstable markets. Learn more from experienced professionals by watching the “How to Optimize Your Business During Uncertain Economic Times” session now, and be sure to sign up for more LinkedIn Lives from Kantata in the coming weeks.
Frequently Asked Questions
How can professional services firms optimize their business during economic uncertainty?
Professional services firms can optimize their business during economic uncertainty by improving operational transparency, aligning workforce capacity with demand, and setting clear priorities. These steps help organizations control costs, protect margins, and make more proactive business decisions.
Why is operational transparency important during economic uncertainty?
Operational transparency gives professional services firms timely, accurate insights into business performance, helping decision-makers identify gaps and control costs. Addressing disconnected processes, technology silos, and limited visibility enables more proactive decisions and improves business predictability.
How can resource forecasting help professional services firms manage workforce capacity?
Resource forecasting helps professional services firms anticipate demand, assess available workforce capacity, and identify potential skill gaps. Understanding these requirements allows businesses to plan staffing more effectively and determine cost-efficient ways to meet changing resource needs.
What are the biggest resource management challenges facing professional services firms?
The biggest resource management challenges include accurately forecasting demand, aligning workforce capacity with project needs, and identifying skill gaps. A Kantata-sponsored survey found that half of businesses cannot accurately forecast resources beyond two months.
How can professional services firms improve business predictability during uncertain economic times?
Professional services firms can improve business predictability by addressing data silos, strengthening resource and revenue forecasting, and establishing clearer priorities. Better measurement, operational visibility, and reliable insights help decision-makers anticipate challenges rather than react to them.