Professional services firms need to build innovation bridges – Part 2
In Part 1 of this article I explored some of the recent cross-industry news around the areas of internal efficiency, data, culture and collaboration. In this second part I will explore some thoughts around innovation approach and productisation. I will also set out in some more detail the areas we will be exploring over the next few months with your help, around the client of the future, workplace transformation and how collaboration is changing the dynamic. We will be starting this month with looking at the client of the future and seeking to build more bridges across the services sectors around how people are driving innovation in this area, so get in touch if you would like to write on this topic.
The approach towards innovation continues to evolve rapidly. As I touched on in an earlier article though, there is the risk of an authenticity gap emerging between the stated innovation goals and the actions being taken. Following on from the recent leadership summit where the clear themes emerged around innovation process, culture and data, it is clear that more work is needed around embedding effective innovation processes for many firms (see summary of the themes here). However, there continue to be many organisations making real progress in leading the way on innovation process as some of the extracts below seek to illustrate.
Artificial Lawyer reports on end-of-programme events held by Mishcon de Reya’s MDR LAB and PwC for their incubator and scale-up accelerator respectively. MDR LAB was a 10-week engagement designed to foster a long-term relationship with the firm while PwC had picked firms beyond start-up level and now at the point of rapid growth. PwC’s Sarah Mack noted that the firm looked at 250 legal tech companies, had detailed interviews with 25 and then chose eight for the programme. Artificial Lawyer provides an overview of the firms involved with both programmes and notes that, when taken with the programmes run by Slaughter and May, Allen & Overy et al, one can see there’s a lot going on in the legal tech sphere.
In the consulting space, Capgemini has announced a new technology venture capital fund. Start-ups could receive an investment of between €1m and €5m and also enjoy assistance from Capgemini’s consultancy business. Capgemini Chief Operating Officer Thierry Delaporte observed of the ISAI Cap Venture fund: “In the digital age, our clients are increasingly embracing open innovation and actively engaging with start-ups.” Consultancy.uk notes that the global venture capital market has spiked periodically in recent years as investors enter the booming FinTech and RegTech start-up scenes.
In Accounting, Amy Vetter, chief executive of The B3 Method Institute and Technology Innovations Taskforce leader for AICPA’s Information Management Technology Assurance (IMTA) Executive Committee, explains that business innovation need not be the sole preserve of large accounting practices. Although smaller accounting firms typically do not have the investment dollars to be able to build out an innovation team full of developers and other tech professionals, they can still focus small teams on testing the viability of innovative options for their practice. Additionally, hiring consultants can be a cost-effective way of implementing AI, machine learning, and blockchain technology.
Journal of Accountancy
In the property space, venture capital firm Fifth Wall has assembled a consortium of 50 international property firms including Gecina, Merlin Properties, British Land, SEGRO, Mitsubishi Estate, Keppel Corporation, CBRE, Cushman & Wakefield, Hines and Starwood Capital to create a $500bn fund to back emerging proptech businesses. Brendan Wallace, co-founder and managing partner at Fifth Wall, said: “As the real estate and technology industries increasingly converge, Fifth Wall has become central to that convergence, fostering a level of strategic collaboration that has never before characterised the real estate industry. Fifth Wall sees powerful network effects in our unique fund model as it becomes a centralised platform for the world’s largest real estate companies to share insights and access new technologies to enhance their businesses.”
There is I am sure more that organisations can explore across the services sectors around how to best implement innovation approaches, whether this involves the creation of internal teams, greater use of things like incubators, scale-ups or venture capital funds. Incidentally, at the recent leadership summit this was one of the topics that we asked around the live poll. We asked people which they felt was the right model to drive technology innovation in professional services. Overwhelmingly people felt that it should be embedded into the practice teams (47%), and be a value that the whole firm embraces rather than a separate team (38%), with only 9% feeling that the best model was to have a separate innovation business unit to drive this (for more see here).
The drive towards greater productisation of services continues across all of the services sectors. If you would like to read some earlier thoughts around this topic you can do so in this earlier article I wrote here. In the article I say that I think there are many common themes running across professional services firms in the way they can use technology to shift to more productised client outcomes, moving away from a focus around the services and process and more towards a customer-centred outcomes-based model.
Insurance law firms have been pioneering the development of their own client-facing legal tech tools for some time, says Artificial Lawyer, and now DAC Beachcroft is launching a new product that will “quickly, accurately and consistently” assess liability following a motor accident. The tool, called BAIL, was developed in partnership with Audatex, an insurance data and claims flow company. Peter Allchorne, Partner and Head of DAC Beachcroft’s Innovations Lab said: “A key attraction of BAIL is its simplicity. It’s easy and intuitive to use, and the question set is entirely dynamic, only asking what’s relevant to return a quick, accurate and consistent decision on liability.”
Also in law, alternative business structure ESPHR has launched a dedicated case management software tool aimed at integrating large company HR departments with its employment law offering. Cloud-based MyHRCases enables clients in corporate HR teams to escalate an in-house matter to ESPHR’s solicitors with a single mouse click and provides a secure means of communicating documents back and forth between the two.
In the property sector, Canopy, a proptech supplier specialising in rent passports and tenancy deposit replacement, has launched an advanced version of its primary product. The core features of the product include digital reference, whereby using Open Banking renters can automatically verify income and past rental payments and pass this on to agents and landlords. Canopy 2.0 also offers a DepositFree insurance product and a free-to-use RentTracking feature enables tenants to build credit for paying rent on-time.
Letting Agent Today
The proptech space overall continues to generate real interest, ITProPortal takes a look at five mobile proptech trends that it expects to dominate the summer months, including mobile tools to provide valuable information that consumers need to make better-informed buying decisions; property management software that streamlines the property management process by facilitating instant communication between landlords, tenants, agents, and contractors; technology that makes it easier for people to connect with people in the same neighbourhood; smart devices connected to mobile apps that enable homeowners to create more intelligent and energy-efficient spaces based on their schedule; and custom 3D floor plans that allow consumers to get a better sense of the home they want to purchase or rent.
There is a lot more in this area than can possibly be covered and the items above are meant as just a flavour of some of the developments across the sectors. I think firms could really benefit from sharing their experiences around how they have explored this shift towards greater productisation, the pros and cons, and the impacts they are seeing around everything from staffing skills to client successes.
When you stand back and look at some of the big challenges it feels that there are a few that are really front of mind. What the client of the future will look like and how to best service them, how the workplace of services firms is evolving around the next generation of employee to meet this new client demands, and why and how collaboration within and outside the firm will be essential for success in the future. We will therefore be exploring these three topics each month over the next three months and welcome contributions on these topics.
In today’s digitally disruptive marketplace there is a constantly evolving technology landscape which is helping to drive innovative was of working. Correspondingly, clients’ expectations have also changed. There was a time when delivering a quality service was all that mattered. Now there is a drive towards “delighting” the client who, at the same time, is expecting greater transparency and accountability throughout the process, as well as demanding more value, higher quality of work and faster delivery from their service providers. We are moving from a world where professional services firms were focused on their process to one where they are increasingly needing to focus on the client outcomes and reimagine new ways to achieve better outcomes. Very few clients care about the processes the firms use, but rather the quality of the outcomes. We are also seeing changes in consumption patterns leading to greater use of technology to drive productisation of services than ever before which creates both challenge and opportunity for firms.
Throughout August we will be exploring this topic area, examining the changing business environment and requirements, alongside the business value, consequences and impact of innovating around the client expectations, experience and outcomes. We will be investigating how Professional Services Firms can provide this depth of “personalised” service more effectively while also using technology and data to a greater degree and remaining differentiated from their competitors. We will be asking what the “Client of the Future” looks like in your industry, what their needs are and how you intend to effectively service them.
As the march towards digital transformation continues, it is fair to say that technology is shaping and transforming every aspect of our lives, including the working environment. Cultural shifts are evident in the way people now interact through their reliance on technology in their day-to-day lives, and meeting the rapidly changing and increasing demands of technology is challenging for any organisation. Organisations are also increasingly seeing the power of technology to help them make the workplace a more effective and optimised environment. On the skills front technology is driving a transformation in the future employee needs in order to service a rapidly evolving set of client offerings. Generational changes in attitudes are also challenging some of the established incentivisation structures historically used in professional services.
Throughout September we will be exploring this topic area, examining the characteristics of the next generation employee, their expected approach to the working world and corresponding requirements. We will be evaluating the changing shape of the working environment, the impact this is having on the business, its infrastructure and the workforce, whilst along the way examining the disruption and transformation needed across the organisation, strategically, culturally and technically. We will be asking what the next generation employee looks like in your industry and how we solve the problem of workplace transformation when the next generation employee no longer fits into the historical models such as striving for partnership.
Finally, as a result of bringing together different voices, ideas, expertise, and specialties, effective collaboration can spur creativity and original thinking to facilitate innovation for the firm’s future. With evidence that better workplace collaboration between staff can provide impressive results in profitability, is it possible that collaboration on a wider scale with partners and clients can be the panacea for small to mid-size firms and enable them to increase competitiveness against the big players in their respective fields?
Throughout October we will be exploring this topic area by examining the pros and cons of internal and external collaboration models, how collaboration impacts and benefits the organisation and how it should be considered from a competitiveness and thus strategic standpoint due to its ability to bring together resources and exponentially increase capabilities. By collaborating more effectively with clients there is little doubt that better outcomes result, but how do firms effectively embrace this new, more open, and more uncertain approach in what can sometimes be risk adverse firm cultures.
Collaboration can be viewed in two ways: –
- Collaborating within the business by connecting teams, departments and thinking to create better outcomes;
- Collaborating across the marketplace with like-minded firms, suppliers and customers to drive more efficient and effective business models and client outcomes.
If you are actively collaborating internally or externally around innovation initiatives get in touch to share the pros and cons of your collaboration project with examples of successful outcomes. We would like to get the conversation going around what is working within which sector and what bridges we can build into the other sectors.
Alternative Insights is all about cross-sector knowledge sharing and we want to hear what you have to say. The topics above are a guide, so if you have a different take on the subject and you would like to share your thoughts in an article, please contact firstname.lastname@example.org as we are keen to feature all viewpoints.