New Mavenlink Study Finds Business, Competition, and Customer Expectations Rising Significantly for Services Firms
70% of Organizations Report Increased Competition in Last 12 Months; 85% Say Customer Expectations Are Becoming More Stringent
Mavenlink, the leading provider of cloud-based software for the modern services organization, revealed results of its annual market survey, “State of the Services Economy 2019.” Survey results show that today’s professional services industry is not only more crowded than ever, but also that rising client expectations have created a cycle of disruption that has fundamentally changed how companies operate and succeed.
Though the services industry is growing at an unprecedented pace, organizations must contend with a number of complications that hamper their ability to leverage this growth opportunity. Almost half of the survey’s respondents (46%) stated that it has become harder to operate a professional services business over the past 12 months.
“Today’s business environment makes it especially difficult for professional and marketing services organizations to compete and grow profitably,” said Ray Grainger, founder and CEO, Mavenlink. “Fulfilling client needs is far more demanding, and operational efficiency expectations weigh heavily on the entire organization. This research highlights the most pressing challenges and greatest opportunities facing services organizations today.”
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Internal and External Pressure for Growth Even Amid Growth
Though almost two-thirds (64%) of companies reported that their business is growing, it is clear that sustaining and even improving upon that growth is top of mind for the coming year. When asked about business priorities for 2019, companies listed the following goals, highlighting how growth is a priority:
- Win New Clients – 35%
- Improve Profitability of Work – 33%
- Growth Among Existing Clients – 32%
- Expansion into New Markets – 28%
Not only are internal stakeholders demanding growth, but external factors are exerting additional pressure on organizations. Increasing client expectations and the need to provide more types of services have created a more competitive environment.
- Nearly three-quarters (70%) of companies reported that they have experienced an increase in competition over the last 12 months.
- Based on the proportion of respondents that highlighted a given demand, organizations feel customers want high-quality work (47%), in less time (51%), and for a lower cost (47%).
Unfortunately, operational challenges are becoming an obstacle to growing and gaining competitive edge.
Roughly One-Third of All Projects Fail
Today, roughly a third of all projects fail, going over budget (31.2%) or past original end dates (29.7%). Businesses are facing new challenges to managing a widening variety of tasks in an increasingly competitive market. Half of surveyed companies have had to turn down work in the last 12 months, and 67% said this was due to not having an appropriate amount of resources. In an attempt to limit project failures, companies are turning their attention to the following areas:
- Managing unplanned project changes
- Forecasting staffing needs
- Gaining visibility into resources across multiple projects
Distributed Teams, Technology Pose Additional Challenges
To grow and nurture their pool of resources, 55% of organizations say they will experience an increase in remote work in the year to come. Organizations are marrying this evolving workforce paradigm with new technology tools. Despite the continued advancement of technology, services businesses still find data siloing and an inability to access information are some of the greatest challenges standing between them and effective collaboration.
- While nearly all (99%) companies said collaboration is important or critical to getting work done, only 48% rate their organization’s ability to collaborate as excellent
- However, despite the influx of new collaboration technologies, 29% feel they have too many collaboration tools
Companies must rise to meet growing client expectations in an increasingly competitive market for their services. The result is that more businesses than ever, regardless of size, are attempting to leverage a variety of strategies to move faster, broaden their range of services, and strengthen their margins.
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