Digital Disruption in Professional Services – Final update
Our Ripple Effect Group industry research project on digital disruption in the Australian professional services sector has now come to an end. As well as researching disruption, we also tried to disrupt ourselves by conducting the project in an open fashion and applying a design thinking philosophy to our approach. For example, rather than running a survey we focused on talking to people in the industry to understand their individual, first hand perspectives.
This exploratory approach shaped the direction of the project. From the initial interviews, three issues were identified for further investigation:
- How is technology creating pressure to work more efficiently and with great flexibility?
- How is social media and social networking actually changing the way firms manage relationships with clients?
- How are firms meeting the expectations of a generation of digital workers?
Social Media and Social Networking
The Ripple Effect Group team looked at a selection of firms and individual professionals across accounting, architecture, management consulting, engineering and legal services to examine their use of social media and social networking. While recruitment appears to be a well established use case, beyond this we found little to suggest that social media was disrupting the basic operating or business models of professional services.
Michael Bradley from Marque Lawyers and Lester Miller from Allens however appeared as outlier examples who were actively engaging online. Their experience suggests there is value (beyond the recruitment use case) for firms that encourage people to participate on social media and in social networks. Right now anyone who is prepared to do this and does it well may give themselves a first mover advantage through building an online strong online presence and the real world relationships that can come from it.
Read more about this in my post, The Social Media Advantage.
Technology and Digital Workers
These two issues were explored together in more detail through interviews (including Expert 360 and Nifty Forms), site visits (including ARUP and Hall & Wilcox) and two round tables held in Melbourne and Sydney.
Key insights from the round table sessions affirmed that from the perspective of people working in the sector:
- The relationship aspects of professional services remain impervious to change, although expertise-based and relationship-centric roles may become more concentrated.
- A combination of technology advances in automation against a broader backdrop of globalisation appear to be more substantive drivers of change.
These sessions also highlighted that the effectiveness of end-user technology (including social media) to augment rather than replace the practices of people working in professional services is still an untapped opportunity in most cases. This was explored further in anempathy mapping activity.
This revealed a focus by participants in the activity on making technology easy to use or provided in such a way that it creates the least disruption. However, my observation is that this may leave firms and individuals unprepared for a future that depends on augmenting practice with new technologies or new business models that rely on digital platforms.
“Digital Disruption” is an inadequate phrase to describe the change taking place in professional services here in Australia. Relationships, along with the special skills and knowledge of professionals, remain central. Clients are certainly also creating pressure on firms to work smarter, but the underlying practice or business models have not changed significantly to create confusion or disorder in the sector.
It is true that new entrepreneurs and people with expertise outside the normal domain of professional services are creating new service models. For the moment rather than challenging the establishment they are creating profit in new or underserved markets.
Based on the research, I believe the biggest disruption in professional services will be felt by individuals as automation and artificial intelligence increasingly augments practice. For new professionals or those early in their career, different pathways will need to be considered. And for those outside the profession, new roles are also appearing.
I think it is also worth thinking about also focusing on improving personal digital capabilities, in order to create a kind of “digital resilience” in the professions. This includes embracing and engaging online with peers and clients in a purposeful and authentic way.
Professionals services is being disrupted, but perhaps not in a way we all thought.
Future research into the changing landscape of the professional services sector should focus on understanding the new skill mix required and how to improve the digital capabilities of current professionals.
You can find plenty of commentary about the future of work and digital disruption, including particularly relevant pieces on automation and artifical intelligence. However, if you would like to continue exploring this topic around professional services specifically I recommend the following:
Watch Richard Susskind and Daniel Susskind speak about the future of professions at the Oxford Martin School.
This talk introduced some of the ideas explored in Richard and Daniel Susskind’s new book. They believe for the time being at least that the professions can continue to work as they have since the middle of the 19th Century. But eventually the way expertise of professionals is made available in society will be transformed.
Richard Susskind also argues that there is a difference between training and exploitation, which exposes a weakness in current professional services business models.
Analysis in the Disruptive Technologies report “found that all but two roles within the accounting profession (corporate treasurers and secretaries) are at high risk of automation.”
However, they remain up beat about the future – they point to the emergence of new areas of expertise, such a big data, and the opportunity to stay relevant by combining “a range of skill-sets, including technical knowledge, critical business thinking, strategic insight and relationship management.”