Professional Services Forecasting Is Stagnating. Here’s Why That’s a Bigger Problem Than Ever

Staying ahead of the competition in professional services takes more than just hard work and talent. Success hinges on anticipating future developments in your business. This is where resource forecasting makes a world of difference.

In late 2022, the Resource Management Institute (RMI) unveiled their inaugural Forecasting Report, which underscored the pivotal moment that forecasting had reached for professional services businesses globally. Yet, their latest 2024 Forecasting Report reveals a concerning stagnation, indicating that professional services businesses have made minimal strides in enhancing their forecasting capabilities.

The contrast of the 2022 vs. 2024 reports illustrates that more companies than ever understand how crucial forecasting is for success, with 92% of respondents recognizing its importance in resource planning. But it also highlights how few businesses have actually adopted strong forecasting solutions.

Everyone agrees that forecasting is important. So what’s holding professional services back? Is inaction hurting your business, too? Find out as we dive into RMI’s Forecasting Report and uncover where today’s businesses are falling short at the cost of their future.

Professional Services Forecasting Capabilities Are Lagging Behind

The ongoing volatility of the global economy, although improved, continues to impact professional services organizations. As such, every business will need to optimize their operations to stay competitive. This means that adopting important software and improving current technology that has fallen behind modern demands plays a greater role than ever before. However, RMI’s research has shown that stagnation and hesitation are very real challenges experienced by many professional services organizations today.

When comparing how professional services businesses view their current resource forecasting capabilities, only 3% in both 2022 and 2024 said they found them to be excellent. In addition, 21% in 2024 said they have no formalized and documented forecasting methodology whatsoever. As for the actual demand data that informs resource forecasting, only 6% of 2024 respondents said their data sources were reliable, a tiny increase from 2% in 2022 but far from reassuring. The overall outcome is that a mere 20% of businesses possess the ability to forecast at least six months ahead in 2024.

What’s Standing in the Way of Better Forecasting?

Given that forecasting capabilities remain stagnant and businesses are increasingly aware of their shortcomings in this area, the pressing question arises: what’s holding businesses back from creating or adopting better forecasting methods?

Only 49% of survey respondents said their organization has a formalized and documented process for forecasting resource needs. Without a strong, well-structured forecasting process, businesses cannot rely on the insights being created and don’t know how they can improve their forecasting data.

Additional inhibitors of effective forecasting are:

• Lack of accurate demand data – 76%
• Lack of timely demand data – 63%
• Lack of automation – 59%
• Lack of adherence of resource forecasting processes – 55%
• Lack of defined resource forecasting – 47%

There are clear deficiencies in almost every area that informs demand forecasts. Without accurate data or the processes that help put these insights into action, nothing can improve. Tellingly, the use of spreadsheets in forecasting actually increased from 71% to 75% from 2022 to 2024, showing that the old ways of managing data are still in place as advancement stagnates.

Get The Forecasting Your Business’ Future Demands

At Kantata, we recognize that excelling today is just the beginning. Professional services firms must anticipate future challenges, whether they arise tomorrow, next week, or months ahead. Kantata is the only tool that supports your resource management needs in real-time, every step of the way—from forecasting demand and managing your talent network to identifying skill gaps and employee opportunities. Want to learn more about the importance of purpose-built professional services forecasting?