10 Challenges Global Professional Services Organizations Face When Scaling

Scaling a global enterprise can be a daunting task, especially in the professional services industry. Operating multi-nationally, with numerous products or services and a global workforce managed out of multiple business units, subsidiaries, or legal entities, global professional services organizations (PSOs) are prone to many different challenges that can inhibit efficient growth across all locations and departments.

In this blog post, we look at ten challenges outlined in the eBook “Scaling Strategies for Global Professional Services Organizations”. Understanding their causes and impacts will help you make crucial decisions that clear the way for successful scaling and the many benefits that follow. For more insights into the ten scaling challenges that follow, read Kantata’s new eBook by Moira Alexander, founder of PMWorld 360 Magazine and Lead-Her-Ship Group, looking at how global PSOs should navigate challenges and opportunities at an enterprise scale.

10 Major Professional Services Scaling Challenges

According to recent Forrester Consulting research commissioned by Kantata and Salesforce, the majority of professional services enterprises with more than 1,000 employees report that they find it very difficult to predict project resource needs in advance (62%), maintain profitability (58%), engage in robust forecasting (55%), and retain employees (54%) and clients (50%). To keep the negative impacts of unpredictable revenue and poor retention at bay, be on the lookout for the following common challenges. 

1. Complex Operations

Global PSOs are, by their nature, difficult to navigate due to how many different departments, managers, and offices make up their structure. This is compounded by the acquisitive nature of enterprise businesses, which often grow through mergers and acquisitions, leading to even greater complexity in structure and the decision making process needed for scaling. To address this, global PSOs need to streamline operations, break down silos, and adopt centralized resource planning and resource allocation processes.

2. Bureaucracy

Due to the amount of people either involved or affected by changes to a global business, decision-making is often slow and cumbersome in established PSOs, making it difficult to determine direction or pivot quickly. To address this challenge, leadership needs to create workflows for making changes, embrace technology to help manage the impact of decisions, and promote collaboration between business units involved in the result.

3. Leadership Gaps

Scaling not only makes departments larger, but it can also widen the gulf between executives and department heads. Bridging communication gaps is critical to improving processes that are key to an organization’s survival. Global PSOs need to develop and nurture their leaders’ skills and encourage cross-functional and cross-cultural collaboration to prepare leaders for the future.

4. Poor Client Retention

It’s not just professional services organizations that constantly change; customers and their needs are continually in flux. As such, a professional services business that doesn’t have the insight and flexibility to adapt to changing demands will struggle with client retention. To retain clients, PSOs must understand and adapt to their changing needs. By adopting real-time analytics, businesses can make timely and effective decisions that help them stay ahead of their clients’ expectations.

5. Poor Talent Retention

If a company can’t understand employee satisfaction and make the changes necessary to keep them satisfied with their present and future careers at the company, talent retention can be a serious challenge. When this happens on a widespread basis, employee turnover rates can rise, and the high cost of replacing resources can have cascading impacts on profitability and scalability. To retain top talent, global PSOs need to actively monitor and mitigate negative trends that push people to leave. Employee engagement, work-life balance, and clear career paths help improve retention rates.

6. Inability to Predict Project Resourcing Needs

Effective scaling means increasing or decreasing the size of departments and teams to meet current and future client demands on resourcing. However, poor forecasting capabilities hurt scaling efforts. By leveraging resource forecasting and resource management technology to provide comprehensive visibility into resources and demands, businesses can scale better, which optimizes utilization, improves margins, and delivers better outcomes.

7. Limited Data and Visibility

Effective decision-making depends on having robust and accurate data pulled from all areas of the business to better understand team performance, resource needs, and project demands. When data is limited and managers have poor visibility into other departments and the organization as a whole, it can be difficult to know the right ways to scale, both in individual teams and the larger business. Global PSOs must work to collect and vet data and leverage real-time analytics to make effective and timely scaling decisions.

8. Outdated Legacy Systems

Due to the age of many global PSOs and the scale at which technologies are often implemented, many enterprise businesses are using legacy systems that do not have the flexibility and capabilities that modern software provides. Replacing these with a new system can often be daunting and is met with resistance to change. However, to keep up with changing client expectations and deliver faster, more efficient services, mature PSOs need to invest in purpose-built systems.

9. Ineffective Change Management

Everyone knows change management is important, but the magnitude of change management needed to support scaling initiatives can still get overlooked in larger, more dispersed PSOs. Introducing major changes in technology, processes, and leadership has the potential to significantly disrupt operations due to the vast number of people affected by such changes. By adopting effective change management strategies and having a change management team in place, businesses can minimize disruptions, streamline operations, and ensure successful scaling.

10. Decreasing Profitability

As clients and talent leave and processes and technology fail to live up to the evolving needs of global PSOs, it is very likely that profitability will also decrease. This doesn’t end the need for intentional scaling — if anything it makes the need to scale more effectively to sustain future growth even more urgent.

Scale Right With a Purpose-Built Solution

Scaling requires both complete control over and insight into every aspect of your business. That’s why the Kantata Professional Services Cloud was built — it gives PSOs all the tools they need to drive long-term success as a complex business in an increasingly complex world.  Learn more in Kantata’s new eBook “Scaling Strategies for Global Professional Services Organizations.”