Episode 71 Transcript

Banoo Behboodi: Hi everyone. Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Banoo, your host today, and I'm really happy to have you with us. Today, it's going to be an unusual session. It's not our typical recording and interview. We're going to come back to a webinar we did previously because it's on a topic that we think is of interest to the professional services industry and all of you, listeners.

In the dynamic realm of professional services, delivering remarkable client experiences is the ultimate measure of success.Unfortunately, though, it is nearly impossible to do without a comprehensive real- time view of project health and performance.

Back in April, Kantata’s Chief Product Officer, Jared Haleck, talked with John Ragsdale from TSIA to discuss Kantata Pulse and how he thinks the solution will help redefine professional services technology.Pulse is a new Kantata solution that enables professional services organizations to natively collect client and employee feedback and improve project outcomes with AI - driven insights.

Now, as I said, this is not normally what we talk about on this podcast.We typically stay away from featuring Kantata - related topics, but this conversation really highlights a broader topic of where PS technology is headed in the future and how AI will be incorporated and the need to take a more holistic approach to be successful in a competitive and a challenging market.

I hope you enjoy the conversation today.

John Ragsdale: could you begin by talking about the limitations of legacy professional services automation and why PS teams tend to be reactive instead of proactive ?

Jared Haleck: Yes, John.Well, first of all, thanks for having me.This is going to be a good topic.We've been really exploring this problem space as a technology organization and as a product team, which is what I have responsibility for here at Kantata. To your question about why services teams, and particularly services technology, has really only focused on the reactive versus proactive, I think it really boils down to the fact that for years, technology is really only focused on, I would say, half of the picture. It’s actually a really important half of the picture, which is to say that a lot of the PSA technologies have been focused on the financial capture, the project and resource management associated with services delivery.

One of the things that I like to think about is if you think about what these technologies have done is they've really been very good at collecting and managing transactions, specifically related to questions like, was a task completed on time? Who completed the task on time? Was the bill sent? Did someone track their time? Did someone get staffed on a project? These are transactions throughout the course of a project, and that's really what we would consider operational data.

But there's a whole other half of services delivery that's super crucial.That's a little bit of maybe an aha moment that we had a couple of years ago as we've been studying this space.When you think about what services organizations are actually in the business of doing, they're not in the business of delivering transactions. They're actually in the business of delivering remarkable client experiences.

You're like, oh, wait, that's the whole ballgame for services.As we were talking with customers, we found that so many of our customers were really trying to solve this problem.Essentially, when I say solve this problem, I mean bringing in that other half of the data which is our customers or clients experiencing the delivery of those services.They were doing that through survey tools and so forth, and it was through those types of technologies that they were able to see a little bit more around the corner.How is somebody feeling about how the project or how the delivery or how the implementation of the software is going ?

It's that type of data that’s been missing from the whole complexion of what the PSA space has really been focused on for many years. In that, we just found this really interesting opportunity to help services organizations deliver services even more effectively with better outcomes for their clients, and actually, bonus, also for their employees as well. If we get a chance to talk about that too, we found that that's something that was a real opportunity in this problem space that we're trying to solve for. Not only do we create better experiences for clients throughout the course of their project, but also create better experiences for employees throughout the course of a project.

John Ragsdale: I'm guessing that it may be a surprise to a few professional services teams that their core goal is delivering exceptional client experiences. But we do know that the industry is moving much more in that direction. There's a lot more collaboration between PS and the Customer Success team.We're seeing that success is now selling a lot more of these value-added services. One of the big hot topics at the moment is subscription services where you're selling a package of services that are consumed by points or credits or hours.Those are all about increasing adoption and receiving value.Even if maybe your PS team wasn't historically focused on customer experience, it's absolutely moving in that direction.It’s great to see some more capabilities being introduced that are really focused on that aspect of PS.

I have had a brief introduction to Kantata Pulse, but I really want to learn more, and our audience wants to hear more.Can you explain Pulse and how it will help professional services meet revenue margin and customer experience goals ?

Jared Haleck: Absolutely.I actually want to go back to something you said earlier.You almost maybe jokingly said it might be a surprise to some folks that the goal is to create[unclear 0:06: 47]. But it's actually interesting because I think sometimes when we talk to our customers, they are so deeply embedded in trying to get a job done, which is implement the software, deliver it on time, meet our margin goal, if that's a consideration within an organization.Sometimes the most obvious thing just gets lost in the mix there.

That was actually the genesis of where this came from.We were talking to a number of our customers, and one of our customers shared with us this quote.I thought this was really great, and we heard this in one sense or another from a number of other customers.They said—and this was a company that was delivering large software implementations—the days of cost and schedule are gone.In other words, cost and schedule are no longer enough.I have to be able to deliver more than just something that's on time and on budget to a customer. I have to deliver outcomes. I have to deliver great experiences to these customers.

That's where we started pulling on this thread. As we started to learn a little bit more about what services organizations were doing to solve this particular challenge of really being able to understand how clients were receiving their projects, their services, or the course of the project lifecycle, we were really surprised because we thought that was a whole other space. People are using survey tools to solve this problem.

We had not really contemplated this up until a couple of years ago because we just thought it was a solved problem.But what we found was in some research with our customers, we found that over 60 % of our customers are already trying to solve this problem, but they're trying to solve it with a collection of off-the-shelf, non-purpose built survey tools, essentially. What that led to is a really difficult technology challenge and being able to deliver those types of surveys to customers—we’ll call them surveys for now—is what we think is really important about this. It goes a little bit beyond surveys, which I'll get to in a second.

The second thing is that because it's so difficult, what most of these customers of ours were doing was they were sending these surveys at the end of a project. Guess what? At the end of a project, it's too late.Back to your question about reactive versus proactive.

A couple of other challenges people were facing was, one person said, I actually don't really know how to design surveys properly. I don't know if I'm introducing bias, so there's a question about trust in the data.Finally, the last thing was it was very difficult to blend the data between the PSA and what's coming out of SurveyMonkey.

I'll give you a couple of examples as to why you might want that data to merge together. You might want to find out if high margin might be causing a lower client satisfaction. That's not entirely uncommon in services where I could shoot for really high margin, but it might actually impact the experience that customers are having.I might not be putting the most skilled people on and so forth.There's a variety of different examples as to why customers really wanted this information to be blended, but it was very difficult.

We started to think to ourselves, we sit in the path.There is a benefit to being an operational system of record, and we sit in the path of how projects are going, when milestones are completed, and so forth.We just had this concept of we could be the stewards of both the technology and the methodology through which we're helping services organizations capture better, more meaningful information about how clients, and like I said earlier, how employees are experiencing what it's like to deliver a project towards some kind of outcome.

Essentially, Kantata Pulse is a technology that's a combination of both technology and methodology that we've researched and partnered with a number of our customers to come up with throughout the course of a project, not at the end of a project, that sends out key questions to clients and to employees to help gain a better understanding of how they feel the project is going.Are they satisfied? Are they having good collaboration with team members? Do they believe they're going to get what they paid for? Do they feel like they have confidence in the outcome that they're aiming for as an organization?

The funny thing is, as we've been talking to early customers and also the customers who are essentially on our wait list to get started with our early release of this, what they are telling us is the key benefit. There are a number of benefits here, John. One benefit is I can get a better handle on this. I could increase client satisfaction. Another benefit is I might be able to see whether or not a project's going to go off the rails before it actually does.Then the final one is they're getting a better sense of employee satisfaction.

The one that people are essentially telling us as the most important for them to solve is actually being able to identify how to create the best project outcomes.That actually was a little bit of a surprise to us.We thought that they might be focused a little bit more on the ultimate client satisfaction.But they all know that client satisfaction goes through the success of the project.A lot of what our customers are really anticipating using this technology for is to help them get a better sense of how they can have better project delivery with fewer overages, fewer surprises throughout the course of it.

That's phase one of what we're doing.Again, it's really just rooted in a lot of what people told us they were trying to solve for using a number of off-the-shelf technologies. We thought, we're in a stream of this.We not only could do this easier, but we could also take the data and blend it together so that they could actually start to see a complexion of how things that are transactional marry up to things that are experience related and start to find the patterns for how to create better experiences and a better business for themselves.

John Ragsdale: Jared, you made a lot of really important points there, one of which I want to just spend a second on.A recent survey of ours showed that 58 % of companies have no capability to correlate practices and results.They don't have the ability to take those metrics like margin or utilization rate and see how it correlates to renewals and expand selling efforts. Departments are so siloed that it never even occurs to them that they should do that. That’s my challenge to all of you listening to this is you have got to show the executives of your company how your team is impacting long-term success for customers. This sounds like a perfect avenue to start teasing that data and getting that data so you can see what's really important to focus on as well as showing how you're contributing to annual recurring revenue.

Jared Haleck: Yes.John, you make such an important point which is that I think sometimes, if you were one step above just delivering a technology as a services organization embedded within a company, if you took one step and you said, what really matters in any modern technology organization, and that is essentially long - term subscription revenue.For years, I think the people who are really on the front lines in the trenches, doing the hard work to deliver this stuff, have, I hate to say it, been viewed as a little bit of a necessary evil.But this gives people an opportunity to show within their organization that if it weren't for this organization and our ability to correlate those outcomes, it's the services organizations delivering the software that actually can have the greatest impact on how long a customer stays.

Just to give you a little bit of maybe a personal anecdote, one of the reasons why I joined Mavenlink, which was the predecessor to Kantata, was because I was struggling with this as a product leader at a previous technology company.We knew the data.We knew that if the customers had a great experience during the implementation of their software, they never quit.They never did.But when they had a difficult time, they almost always quit.I was just really fascinated with this problem space.I actually think this provides services organizations an opportunity to really uplevel their ability to have a seat at the table because I think these services organizations within technology companies, they're the ones that matter. They're the ones that are going to determine how long a customer stays based off of the experience that customers have during that implementation process.It's an awesome point you make, John.

John Ragsdale: omething everybody needs to be focusing on this year, especially with tight budgets and spending avoidance.I'm very happy that we are seeing much more AI capabilities coming to professional services and being included really out of the box. According to some recent AI survey work we did, 48% of companies are just investigating AI tools. Only 8% have had any positive results so far with AI. I would love for you to give me more details on the features in Kantata Pulse and how you're bringing out - of - box AI to professional services.

Jared Haleck: Great question, John.Kantata Pulse starts off as a solution that helps to collect some of this more text - oriented information that comes from customers.This would be their feedback on how projects are going and so forth.What we're doing is our first launch of this is going to be helping our customers understand how their clients feel through this combination of technology and methodology, which is our ability to ask questions and a specific series of questions oriented around happiness, confidence, and collaboration throughout the course of a project.

If we want to again reference back what we said earlier about technology in this space serving services organizations, that technology has really been oriented around everything that's transactional. With the rise of generative AI, everything related to generative AI is oriented more specifically around what people have to say versus what people do, a transaction, within a product.

One of the things that we're really excited about with the launch of Kantata Pulse is a way to be able to get some input from clients and from employees throughout the course of a project in more of a long-form “here's how I feel about how our project is going” and being able to take that information and being able to apply generative AI to that in the future.

I’ll just give you really quick example use case.Let's just say you actually had Kantata Pulse on for a number of projects, and you begin to collect information. Now, imagine being able to ask Kantata anything you want. How is this project going? How are a series of projects going? Depending on where you sit in an organization, that information could be super valuable to you because you're not maybe closely tracking the day - to - day ins and outs of a project.

The other thing that we're finding that we think is going to be a really great advancement for those who are working on the front lines of projects is imagine now that because we're collecting more of this information about the real project health beyond just what's transactional, you will be able to potentially use Kantata Pulse as an assistant. It’s something that you can say, I've got a client meeting coming up, and I really need some help writing my client status report or my project status report.We've done some testing with some clients on this particular concept, and people are blown away by the results. Now you have not just the transactional data, but you have more of that qualitative data that you can bring to bear and be able to write really comprehensive updates about projects.

We had one project manager who we were testing some of this with say, that's pretty good, and that would have taken me 45 minutes to pull together. It's not hard, but it's just extra work. To have generative AI be able to use not just what's transactional, but again, what's also qualitative coming from Pulse as inputs to that, we think that's going to be a major game changer.

The final thing I would say on this is for many years, Kantata has had an AI capability around optimizing the way that you’re staffing projects, and we think that Kantata Pulse is a fabulous new data set for that particular technology.Now, you can get a better sense of how did past clients interact with and how do they feel about the experiences they had with certain team members on projects ? Now, that can be used as a data point in being able to staff the appropriate people who might have the best chance at creating the best customer experience based off of previous feedback from previous customers.

John Ragsdale: One of my favorite elements of this is the sentiment analysis.Over the last couple of years, we've seen a lot of technology introduced for support organizations that are mining customer conversations for sentiment, understanding what are friction points in the experience. For the last couple of years, I've been challenging Jen Dodos, Kantata’s Vice President of Marketing, about you guys really need to bring in sentiment analysis.There's oceans of conversations going on around all of these projects and what is really irritating clients and what is really pleasing clients. This is going to help you really pinpoint that. I'm thrilled to see as far as I know, this is the first public announcement of a PSA platform incorporating sentiment analysis, so thank you very much for that.I think it is a total game changer.

We've been talking about the fact that PS and tech companies in general have not been really bleeding edge on AI. I think that the solution to this is that companies should not be building AI themselves unless it's your core competency, but you need to be looking to best - of - breed providers that are incorporating more of these gen AI capabilities into the product, so you don't need a team of data scientists to get it up and running and to maintain it.

I think that seeing products like Kantata Pulse, building AI into a platform that your customers are already using is a really smart approach.All of you in the audience, I know you've got MBOs this year for having examples of leveraging AI or gen AI and having a roadmap for that. I would really encourage you to talk to all of your incumbent vendors and find out what is on their roadmap and make sure that you've got a plan in place to really incorporate this and ultimately, start changing your financials as well as the customer experience.

Banoo Behboodi: Thanks again for listening. As always, please feel free to reach out to us, we’d love to hear from you. If you have any new ideas in terms of topics you want us to address or any questions, you can always email us at podcast@kantata.com.

Brent Trimble: If you enjoyed this podcast, let us know by giving the show a five-star review on your favorite podcast platform and leaving a comment. If you haven't already subscribed to the show, you could do so anywhere you get podcasts on any podcast app. To learn more about the power of Kantata’s purpose-built technology, go to kantata.com. Thanks again for listening.