What will professional services look like in 2025?

Exploring the evolution of professional services businesses and the role of the cloud and modern talent management in their ongoing transformation. It is a time of huge upheaval in the Professional Services sector. It’s important to think about where current dynamics might lead the market. And the new demands that companies should be prepared to address – from both customers and employees. The proliferation of emerging technology like cloud platforms is likely to have the biggest impact on the day-to-day activities of Professional Services organizations. The IT services sub-segment is naturally slightly ahead of the other key sub-segments in terms of digital maturity. But consultancy organizations such as Accenture show the direction that the wider sector, including areas such as IT/Software Services, architecture and engineering, will follow. 

The Move to the Cloud

The typical IT services vendor now sources 95% of its IT infrastructure from a public cloud. It attributes to this a 50% reduction in costs compared to traditional on premise datacenters. The cloud has also provided the agile platform needed to accelerate the launch of new service offerings to market. We believe that by 2025, more than half of all Professional Services organizations will source most of their IT infrastructure from cloud environments. 

There will be a similar acceleration in the use of Software-as-a-Service solutions. Professional Services firms will look for core applications that give them the agility to adapt to changing market conditions, support a more flexible workforce structure, and generate more value from escalating data volumes at the heart of their activities. Cloud based financial planning, project management and reporting and analytics can also help organizations better anticipate changing market conditions. SaaS solutions currently account for around a quarter of total software spending in the Professional Services sector, but this is on track to increase to a level of 50 or higher by 2025. 

Enhancing Talent Management

One of the major drivers for SaaS adoption will be the increasingly fluid makeup of the workforce. Homeworking has recently become standard practice for many across the sector, but by 2025, we are likely to see Professional Services working from a more diverse set of locations. These will include the traditional central office, the client site, and the home office. We will also see the rapid growth of new suburban co-working spaces that will offer workers a collaborative environment closer to home without traveling to a large central hub. 

It will not just be the location where we will see greater fluidity. Job roles in professional services will become increasingly flexible in terms of working hours and full-time commitment. The nature of Professional Services means that a typical nine-to-five working day is much rarer than it is in other sectors. But we are seeing firms such as PwC implement formal flexible working policies across the board, which allow staff to work the days and hours that best suit them, providing that projects are delivered on schedule and clients are happy. The most attractive employers will offer employees the opportunity to strike the best balance between work productivity, wellness, and other commitments. 

PwC has stated that one reason it has adopted a more flexible working policy is to appeal to Generation Z talent. And research from the US-based Freelancers Union has suggested that younger workers are more attracted to working in a freelance capacity to strike a better work/life balance and give themselves the freedom to choose clients and increase their earning potential. By 2025, the proportion of permanent staff on Professional Services organizations' rosters will have declined significantly from current levels. 

Professional services firms will increasingly leverage cloud-based human capital management platforms as traditional approaches to HR management become obsolete. Business will need a more dynamic way to handle aspects such as employee recruitment and onboarding, and skills development in the world of hybrid working, while also looking to drive more regular and impactful engagement with professionals to ensure they remain happy, productive and connected to the goals of the organization. 

AI Integration

Virtual assistants will increasingly support workers across all aspects of the professional services sector. The technology is still finding its feet in the commercial sector today, but as we have seen, early use cases in the sector have emerged in areas tackling repetitive, administrative tasks. As the technology becomes more intelligent, with increasingly powerful AI algorithms able to mine larger, more accurate datasets, it will be applied to areas such as optimizing scheduling of client calls and visits, and the monitoring of mental and physical health and wellbeing, in conjunction with wearable devices. 

This trend will also drive the creation of new roles that simply don’t exist today. Professional Services organizations will need to create central teams of AI experts to develop the use of the technology within ethical frameworks and prolife rating use cases across the organization efficiently. 

These functions will also include specialist AI trainers, responsible for developing the algorithms' effectiveness and applying them across both internal and external data sets. In the architect and engineering space, we will also see the emergence of virtual reality experts' dedicated teams, applying technology to optimize design and collaboration processes.