The Future of Professional Services: Unlocking Growth Through Digital Transformation

The professional services industry is on the verge of transformation. Recent technological developments allow for automation of more and more tasks that were previously manual. Haven’t we heard this before with previous introductions of new technology? Well not exactly: Lotus and Excel did not transform accounting; AutoCAD did not transform engineering; SAP did not transform resource planning – rather, these tools increased the productivity of white-collar professionals. The difference is that these tools improved the productivity in the execution of micro-tasks, where recent intelligent, adaptive, perhaps even ‘learning’ technology, now for the first time ever has the potential to replace an entire human layer doing standardised, protocolised, or repetitive work within organisations.

In parallel, there is an unprecedented talent scarcity that will persist (or even increase) across subsectors. Professional services is, by definition, a people job, and even with the additional possibilities of automation, there will remain significant shortages across parts of the workforce. Across Western geographies supply of talent is declining due to an ageing workforce and negative natural population growth, which is not being offset by net positive migration as immigrants are underrepresented in professional services.

However, for some pockets in the industry, undersupply can be addressed by shifting work to other geographies – this can be done for some roles within engineering, but is far less feasible for local legislation dependent professions like accounting or law; or for professions where local delivery is vital, such as various areas of consulting.

At the same time, the demand for these services is booming as the industry primarily supports organisations with change – and with the global challenges in ESG, geopolitical tensions, and rapid technological advancement, there is more demand for change than ever. It is the accountants that need to audit the CSRD reports, the engineers that need to design the dykes, and the consultants to support businesses in their transformation to a greener future.

This combination allows players that successfully transform their business to a technology-led model to grow rapidly – not at the expense of competition and margins – but by tapping into the vast volume of unserved demand.

Why Digital Transformation in Professional Services Fails Without a Commercial and Delivery Model Overhaul

Despite the obvious advantages of adopting digital ways of working, we have encountered numerous firms that needed to overcome fundamental challenges in this transition, as firms are:

Insensitive to efficiency gains through traditional time and materials model

Fees of many professionals are input-based with a fee per time unit (‘time and materials’). Whether you’re providing bookkeeping, managing legal complaints, or offering any other service, if your client is used to a traditional commercial arrangement and has built loyalty with a long-time provider, the worst thing you can do is double productivity — only to let them pay half the fee.

“In 2024, in the Netherlands, large secondment agencies placed over 20,000 professionals, over 95% based on hourly rates.”

Unfocused and incoherent in deploying automation resources

Most professional service organisations offer a range of services, with varying extents of customisations; typically, with various pockets of specialists contributing to delivery. That often makes it difficult to prioritise where to start, and results in business spreading automation resources too thinly across their portfolio.

Unexperienced in holistic change of their primary process

While productivity tools are often adopted for specific tasks or roles, their impact extends far beyond isolated functions. They don’t just change how individual employees work – they transform how service businesses interact with clients, influence who is involved in delivery, and reshape how these organisations develop and manage talent.

Five Strategic Lessons for Technology Adoption in Professional Services

Our experience in working for various organisations in the professional service industry taught us five key lessons in successfully adopting a technology-led way of working. Successful businesses started with identifying where digitisation provides most value (in quality and proposition), followed by redesigning their commercial proposition before, or in parallel with, reshaping the delivery.

1. Evaluate the additional customer and talent value, besides the internal cost savings

Automation also reduces throughput time of processes, it increases accuracy, and improves quality. Whether it be automated interfaces with clients or internal processes, automation often creates value beyond the labour cost reduction. Successful businesses identify and commercialise the additional value provided to customers – for example, an accountancy business fully centralising and automating basic bookkeeping activities can improve its customer proposition through better cash flow forecasts and by identifying advisory opportunities. The automation of the most frequent and standard tasks improves the talent proposition in various white-collar roles, as client interaction and advisory tasks become larger parts of a role.

“A European niche engineering firm increased EBITDA margins to above 40% by moving to an output-based proposition and capturing a major part of the additional value created”

2. Move from an input-based pricing model to an output-based client proposition

To reap the benefits from increasing efficiency in delivery, pricing should be based on outputs rather than time of a professional. In markets with many buyers and long-term strategic customer relations, these changes can be made quickly – particularly when the customer does not see a comparable fee envelope.

However, in markets with a few buyers and transactional, tendered purchasing dynamics, it might pose a challenge to change purchasing behaviour. Even in markets with many private buyers, such as accountancy, the strong customer relationships, and the relative low interest in the accountancy services provided, result in low price sensitivity, and limited willingness for a client to change its way of interacting with an accountant to allow for a digitally enabled way of working.

Several markets illustrate (first) steps on this journey:

• A staffing business with legal professionals used to solely work time-based. Recently it provided services to public client with a fixed fee per handled complaint – this enabled them to deploy RPA tools, reduce labour, and increase margins
• A purchase services provider, traditionally delivered through a staffing model and hourly rates, has moved a substantial proportion of its business to an outsourced model (with a commission on purchase spend)
• An accountancy business with an ambitious digitalisation agenda, actively pushed clients to adopt its new model by turning away from those that preferred a traditional model.

3. Focus on automating low complexity and/or high repetition tasks first

In most professional services firms, there is substantial heterogeneity among the tasks performed across professionals. Although many activities would be automatable, it reaps most benefits to start with tasks with a high degree of standardisation / repetition, with a relatively low cost of failure and that represent (in total) a sizeable volume of labour. Accountancy firms, with over 50 types of services provided, typically start with automating their basic administration services, which represents most of the volume. However, for staffing firms, it is typically much harder to find out where to start as their professionals are deployed for a variety of tasks, tailored to systems and environments of their clients. Successful businesses focus on building scale in specific disciplines and end markets to reach sufficient scale to reap the benefits of automation.

4. Shift deployment of talent to the most complex and/or highest risk environments

Displacing labour by technology often does not imply a reduction in staff. In many organisations, talent is allocated to a range of different projects, cases or tasks varying in complexity. By automating simple tasks and leveraging the cost advantage or customer value add to drive market share gain, businesses are able to deploy the freed-up talent to deliver more complex tasks – for example, an interpreter business automated simple or standardised parts of conversations (e.g. reading out house rules for various asylum seekers in various languages), which enabled them to deploy the time of interpreters to more complex conversations.

In some services organisations, the introduction of technology has implications for the balance of senior and junior time required in delivery. Accounting firms, with a large volume of protocolised and standardised services, typically have large staff to partner ratio. Apart from providing leverage in delivery, this enables them to select the best performing talent for promotions. Automation could reduce this ratio, requiring a different approach in training and selecting the new generation of senior staff.

5. Reflect the scale and pace of transformation in the organisational approach and your team composition

Technology will likely have a material impact across all various segments of the professional service industry, but the urgency to change and impact on the commercial and operational model vary widely by segment. We have seen that successful businesses researched the magnitude and pace of the change required. This supported them in a selecting an effective organisational approach to manage that change – from a drastic tech-led, top-down transformation to a gradual bottom-up evolutionary approach.

The professional services industry stands at a critical inflection point, where digital transformation, automation, and evolving talent dynamics are reshaping the foundation of how services are delivered and valued.

While the adoption of intelligent automation and output-based pricing models offer clear advantages, success requires more than implementing tools – a strategic rethinking of the commercial proposition, delivery model and workforce deployment is needed. Firms that can scale automation in high-volume, low-complexity areas and realign talent toward more complex, high-value work will be best positioned to lead in a market driven by technological disruption, talent scarcity, and rising demand for agile, tech-enabled service models.

By embracing a holistic change strategy, forward-looking professional services firms can unlock substantial competitive advantage and meet the growing demand for high-quality, digitally delivered solutions.

At OC&C, we work with leading professional services firms to turn digital disruption into competitive advantage. Whether you’re navigating the shift to output-based pricing, scaling automation across complex portfolios, or rethinking your talent model in the age of AI, our experts bring deep sector insight and hands-on experience to guide your transformation. To find out how OC&C can support your digital strategy, get in touch with our experts today.