Six characteristics supporting excellence in service delivery innovation

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Last Friday, after delivering the breakfast keynote at CPA Congress in Brisbane (more on that in another post), I ran a half-day workshop at the partner offsite of a national accounting firm network on the theme of Disruption and Innovation in Professional Services.

I spent some time giving the partners current perspectives on both disruption and innovation in professional services, with the rest of the time spent facilitating the group in generating and prioritizing initiatives to drive the members firms’ future.

I ran through the domains in which they can enhance their business models and performance. However in professional services probably the most important domain is service delivery, in which extraordinary possibilities for innovation have opened up in the network economy.

I have just recalled that eight years ago I co-authored a white paper for SAP titled Service Delivery Innovation: Creating Client Value and Enhancing Profitability. While it is not recent, the issues I covered are still completely relevant today, so I thought I’d share a section from the white paper here:

Characteristics of Successful Service Delivery Innovation

Professional services firms that excel at service delivery innovation demonstrate six key characteristics:
• A networked organization
• Flexible workflows
• Global sourcing
• Client and supplier collaboration
• Continuous innovation
• Enabling technology

A Networked Organization

Professional services organizations are ultimately collections of people: deeply specialized professionals who bring together their expertise to create value for clients. As such, the relationships and networks that link individual professionals are at the heart of the organization. Siloed professional organizations are ineffective. Successful organizational networks rely on human capital policies and technologies that quickly and effectively locate expertise, support project teams, and encourage collaboration throughout the organization.

Flexible Workflows

Streamlined and effective workflows are a vital component of service delivery innovation within a professional services firm. However, this workflow is markedly different from the workflow required by a routine operation, such as processing an invoice for payment. Workflows within innovative professional services firms need to be readily reconfigured to adapt to different projects, situations, and emerging market needs. Workflows need to support the firm’s efforts to identify talent, create marketplaces, establish pricing mechanisms, enhance client relationships, and integrate quality assurance processes into workflows. The systems and processes in place should support the introduction of new services and products across the organization.

Global Sourcing

Both internal and external sourcing strategies are critical to the success of a global professional services firm, and work and resources need to flow across boundaries. To succeed at global sourcing, professional services firms must undertake several initiatives. First, they must consistently implement highly effective processes for identifying and applying internal talent. Secondly, firms must establish an approach for drawing on external talent as soon as required. Professional services firms must master this complex activity in order to compete in a global market influenced by low-cost labor and emerging pools of expertise. Firms need integrated workflow technologies, available collaboration spaces, appropriate organizational design, and a professional culture that supports work across borders. Firms must also adapt and mesh the work and social attitudes of its home country with the very different cultures of colleagues and clients on other continents.

Client and Supplier Collaboration

If a firm provides “black box” services – characteristic of no collaboration with clients – it will rapidly become a commoditized service provider. Professional services firms need to effectively and continuously collaborate with their clients to build greater value and lock in clients for the long term. Firms must also achieve outstanding collaboration with their talent suppliers. In a modularized economy, receiving the greatest value from external talent requires bringing them into the firm’s processes rather than contracting for work piecemeal. To enable external collaboration, professional services firms can use technology that allows remote professionals to view and participate in key business processes.

Continuous Innovation

Service delivery innovation is an ongoing process; it must be embedded into the way a professional services firm functions and develops new products and services. Some initiatives – such as implementing global processes, developing client collaboration, or creating a more networked organization – are ongoing as well. There is always room for improvement. Other strategies, such as productizing services, may evolve in stages, building on existing capabilities and firm maturity. Most importantly, everyone in the company, from the executive team on down, must continually seek better ways to deliver services.

Enabling Technology

Technology is a key enabler of service delivery innovation – as shown by the overwhelming response of 93% of the professional services firms surveyed. Each of the characteristics of service delivery innovation discussed so far requires a technology platform that is modular, flexible, and reconfigurable. In addition, this platform must integrate easily with external systems and processes to support client and supplier collaboration and to draw on global best-of-breed resources.

You can read the full white paper here.