Professional service projects are different animals than “normal” projects. While both offer challenges, professional service firms must meet their internal goals AND the client’s expectations. More companies and more people involved usually equates to greater risk.
This article is your ultimate guide for understanding professional services, why companies use them, and the challenges professional service firms have in common. As a bonus, we’re including a game plan for managing your professional services projects more efficiently. Let’s get started.
What are professional services?
Some companies sell finite products (laptops, office furniture, etc.), while others sell services or expertise. These services may be industry-specific or broadly needed across multiple industries. The professional services industry consists of startups, small businesses with just a few employees, and large, publicly traded corporations.
Professional services providers are a multi-billion dollar market and are growing globally. According to the 2022 Professional Services Global Market Report, the global professional services market grew from $5,452.96 billion in 2021 to $5,964.79 billion in 2022. Similarly, a recent survey finds that roughly a third of small businesses currently use at least one professional service provider, and 52% are planning to do so.
Why do businesses use professional services?
Sometimes it’s more advantageous for a company to purchase these service offerings from a company that specializes in them instead of trying to handle them in-house. A few examples of situations where a business would need professional services are:
Project management services: Companies that don’t have the employees or bandwidth to handle multiple projects may hire a company to set up the timeline, manage the project, and return the deliverable on deadline and budget.
Legal services: Many companies must follow regulatory rules that can get confusing and seem vague. These organizations may hire a law firm to help them navigate the muddy waters to ensure they operate legally and within compliance.
Accounting services: Accounting firms may be able to make quick work of a company’s taxes, even finding tax savings that wouldn’t have been possible otherwise. Small businesses that lack an accounting department may hire a firm instead of onboarding an entire accounting department.
Types of professional services
Many types of companies in the services industry offer knowledge and expertise that help organizations optimize their operations. Let’s look at a few of the most common types of professional service providers.
Information technology (IT) support
Technology is a pivotal part of almost every company, and issues can grind business to a screeching halt. Smaller businesses especially benefit from a professional IT support provider, as they may not be able to afford an IT department on staff.
IT professional services may include:
Installing new software
Troubleshooting technical issues
Setting up an API
Providing user support
Performing system/application updates
In some cases, companies may consult with IT service providers about improving efficiencies and automation within their company.
Software and web development
Creating a seamless customer journey that leads to conversions (and, ultimately, revenue) is essential. This is why many companies hire software and web development services to make sure their websites are top-notch and make it easy for customers to navigate. Tasks usually focus on keeping the website aligned with the company’s brand and facilitating positive, seamless user experiences:
Designing the website's structure
Creating a completely new design
Implementing software-as-a-service (SaaS) products
Marketing and social media
Marketing is a broad umbrella covering numerous services available via professional providers. Social media, while not as broad, is a crucial part of a digital marketing strategy for many organizations.
Companies can hire marketing and social media companies to:
Build and maintain their brand pages
Write, post, and monitor their social media profiles
Build and implement content marketing plans
Handle public relations announcements
Finance and accounting
This type of professional services team has been around for decades and continues to grow in importance. Finance and accounting (noted as critical factors in a business’s success) are best left to the trained professionals — and that's exactly the belief that drives this industry. These disciplines are just too costly to risk handling on your own.
Some needs finance and accounting services firms can fill include:
Handling taxes (and staying on top of ever-changing tax laws)
Offering wealth management advice
Creating financial plans
Guiding investment portfolios
Performing financial evaluations
“Consult your attorney.” Business owners hear this all the time, and with good reason: One legal misstep can derail an otherwise successful company, making them liable for damages, open to lawsuits, and out of compliance. This is why legal outsourcing is critical.
Businesses may need a wide variety of legal services over their lifetime:
Setting up the company’s structure (initially)
Handling copyrights and patents on products and services
Advising on interpersonal issues between employees
Dealing with lawsuits from vendors, clients, and former employees
Teamwork was built specifically for professional services providers, offering a central hub for client project management. Learn more here.
Challenges in professional services
Like any business, professional service agencies come with their share of challenges. Below, we'll explore a few of their greatest challenges.
Since business is based on knowledge and skill, the human element is vital to serving customers. This can translate into a big challenge for professional services. Overestimating resources or underestimating the number of resources a project needs can put the company in a deficit. This issue can clog up the workflow and cause projects to miss deadlines and come in over budget.
Realistic resource planning and helpful project management software can alleviate this pain point in many situations.
Client satisfaction and retention
Professional services firms aren’t completing projects solely for their company’s benefit — they’re doing it for their clients. The client will take their business elsewhere if the deliverable is inaccurate, late, or low quality. Keeping the client satisfied is the top priority for every professional services firm. Otherwise, bringing on new clients and having them leave will be a constant grind.
Service firms can increase client satisfaction by benchmarking results and through client satisfaction surveys and interviews. It’s also helpful to use automation and templates to provide a consistent customer experience across every client relationship and project instead of starting from scratch every time.
Personalizing services and managing workload
Every client wants to feel like they are the top priority. But what if the firm has dozens — or even hundreds — of clients? It can be challenging to make them all feel like the solution is tailored specifically to them.
With project management tools, you can invite clients into select conversations about the project and the updates as it progresses. Additional communication like this keeps clients in the loop, keeping their worries and misgivings at bay.
Managing clients’ billable hours
Billable hours are the time professional services companies charge their clients for their work. Managing these can be difficult, and scope creep is the biggest culprit. When projects start growing, adding an element here and a new idea there can eat up billable hours and increase pricing.
And trust us: Nothing irritates a client more than a higher bill than they expected.
Some project management tools offer time tracking to keep billable hours in line and projects on budget. Stay focused, deliver work on time, and get better insights with Teamwork.
Key ingredients for top-notch project management in professional services
Professional services firms need strong project management initiatives that maximize their resources, mitigate bottlenecks, protect the profit margin, and exceed client expectations. Otherwise, projects can fail. Here are five elements every professional services firm should include in their project management initiatives.
Project planning for each client
Starting on the right foot is essential for setting the timelines and assigning the tasks that will push the project forward effectively. Decide who will be involved and accountable, what they will do, and how (and when) they’ll do it. Use the information the client has provided to guide decisions during this step.
Actionable tip: Lay out the entire plan in your project management software and assign stakeholders and timelines.
Team and client communication
There should be multiple communication channels for team members to check in with each other, their project manager, and the client. The client should be able to ask questions, too. Communication is key in identifying issues before they damage the project timeline. For example, if one team member is overloaded, the project manager should reassign some of their tasks to team members with more bandwidth.
Actionable tip: Talking, emailing, Slacking, and sharing information and updates in real time or asynchronously can decrease the chances of something falling through the cracks.
Resource and capacity planning
Professional services firms must plan out their resources effectively: Your internal project teams and clients depend on it.
Underusing and overusing team members are both detrimental to the project. Project managers must stay on top of the project and have a way to watch all areas of it unfold.
Actionable tip: Use resource forecasting to plan for future projects, ensuring that you always have the staff you need available. To further address any potential workload capacity concerns, use Teamwork’s workload planning tools to manage and reallocate tasks as needed to keep the project on track — without burning out your team members.
Find out more about Teamwork’s advanced resource management capabilities.
Clear project visibility
As we mentioned above, seeing the project from a high level is a powerful tool for success. Visuals that let the project manager and team members see the different aspects of a project and how it connects with the others provide insight that assists everyone in doing their jobs better.
Actionable tip: Use the simple, flexible, and transparent team collaboration feature in Teamwork to increase projects’ visibility.
Mitigating risks and identifying roadblocks
Mitigating risks and identifying roadblocks as early as possible help minimize the damage they do to the project and the ability to deliver it on time and within budget. One of the project manager’s most relevant tasks is identifying problems and addressing them effectively. Staying on top of the project and every stakeholder’s progress is key to seeing problems coming early.
Actionable tip:Project management software like Teamwork that provides a big-picture view of the project can help managers pinpoint potential pitfalls and address them before they derail the project.
Manage your professional services projects with Teamwork
Professional services firms have the potential to build your business and serve their clients well. They just must put tools in place that help them deliver their projects in a manner that meets and exceeds the client's expectations. By understanding project planning and how professional services software can keep projects on track, these companies can strengthen client relationships and deliver what they promise.
For professional service providers that need a complete project management solution, check out Teamwork. We offer a seamless, scalable tool that helps you stay on top of projects, collaborate with your team, and gain insight into tasks and deadlines.