Nearly Half of Organizations Set to Implement Specialized Solutions, Signaling a Major Shift Toward Purpose-Built Tools
Kantata, a leading global supplier of purpose-built technology for professional services, announced its new State of the Professional Services Industry study today. The study unveils a complex landscape in which professional services organizations (PSOs) rapidly embrace advanced technologies to address interconnected challenges that impact every aspect of their operations.
Kantata's State of Professional Services Industry survey, co-sponsored by Salesforce and conducted by Censuswide, gathered insights from 202 decision-makers at the director level or above across various industries within professional services organizations in the United States.
The survey reveals encouraging growth and optimism. Notably, three-quarters (75%) of decision-makers report that profit margins have been trending upward in the past 12 months, and 62% have seen an increase in billable utilization rates. Moreover, nearly 70% of leaders express optimism about the future, reflecting a positive outlook even amidst economic uncertainties. As firms increasingly turn to technology and innovative solutions, many are not only navigating current complexities but are also positioning themselves for long-term success.
However, the survey also identifies several intricate challenges that must be addressed now to sustain this positive momentum. Key findings highlighting these challenges include:
- 96% cite difficulties in forecasting roles and skills needed for upcoming projects, a challenge that cascades into resource management, project delivery, and, ultimately, financial performance
- Only 23.8% of decision-makers have full trust in their current data, indicating that poor data quality impacts decision-making across all operational areas
- 55.4% of firms report that at least 1 in 10 of their revenue-generating projects fall short of budget goals
- 61.5% of organizations had to turn down work in the last 12 months due to inadequate resources, directly impacting revenue potential
- 91.6% agree that difficulty managing projects to the appropriate timeline and budget impacts their organization, affecting client and employee satisfaction and profitability
- 65.8% report rising client expectations for work quality, 63.9% for delivery speed, and 51% for transparency, putting pressure on resource allocation and project management
The study also reveals that advanced technologies are key to addressing these interconnected challenges: 46.5% of organizations list upgrading systems and technology as a top priority in 2024, making it the most common priority among respondents by a significant margin. Additionally, 82% of decision-makers are extremely or very willing to make significant technology investments in the next 12 months.
Much of this investment will likely focus on the Professional Services Automation (PSA) category, where nearly as many businesses plan to implement a PSA solution (42.5%) as those that currently have one implemented (45%). This surge in technology adoption in the professional services industry reflects the growing need for solutions that help firms navigate complex issues across resource management, project delivery, client expectations, employee satisfaction, and financial performance.
"These findings emphasize the urgent, interconnected challenges facing professional services firms today," said Michael Speranza, CEO of Kantata. "While there is cautious optimism, with 69.3% of leaders hopeful about the future, there's a clear and pressing need for action. Addressing problems with short-term fixes and piecing together solutions is not a viable strategy anymore. Organizations must implement lasting, comprehensive solutions that can resolve multiple challenges at once-and they must do so immediately."
The study also highlights a strong interest in AI's potential, with 69% of organizations either currently using or exploring AI technologies to optimize key processes in the professional services project lifecycle. This trend reflects a growing awareness that future success will require not just adopting new tools but also preparing the underlying data and processes to fully leverage emerging technologies like Generative AI.
"As the industry continues to shift, firms that lay the groundwork for AI adoption now will lead in the years ahead," Speranza emphasized. "By preparing data and processes today, firms will be better equipped to make smarter decisions and respond more effectively to market demands. The transformation AI can bring is massive, but only for those who move quickly. The time to act is right now."
To see all of the findings, download the full report here.
Salesforce and others are among the trademarks of Salesforce, inc.
About Kantata
Kantata takes professional services automation to a new level, giving people-powered businesses the clarity, control, and confidence they need to optimize resource planning and elevate operational performance. Our purpose-built cloud software is helping over 1,500 professional services organizations in more than 100 countries focus on and optimize their most important asset: their people. By leveraging the Kantata Professional Services Cloud, professionals gain access to the information and tools they need to win more business, ensure the right people are always available at the right time, and delight clients with project delivery and outcomes.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241114248128/en/
Contacts:
Media Contacts:
Jen Dodos for Kantata
949-322-6181
jen.dodos@kantata.com
