he professional services landscape is changing – and fast. Professional services firms are embracing the opportunity to tackle new markets, finding economies of scale in larger operations that align well with international clients. However, with increased complexity comes greater difficulty in managing the business effectively. Expansion must not come at the cost of efficiency and responsiveness. As a result of this, it’s clear that the human shape of these organizations is also changing significantly.
Key trend 1: Internationalization Whilst small professional services firms remain in the majority, many of the businesses that dominate the sector have successfully realized growth in volume and complexity through geographical expansion. Whether organically or through M&A, they have successfully sought out new opportunities abroad and committed to creating genuine in-country presence overseas. Diversity as a defense mechanism To have the best chance of surviving into the medium to long term, diversification can be an important part of the corporate strategy – not just in terms of the services and expertise that you’re able to offer, but with respect to physical location as well. With every country experiencing problems of some kind, not to mention the introduction of new measures and regulation to try and repair the damage, spreading an operation across borders can be an effective way to manage the risk
and uncertainty associated with any one region or set of evolving legislation. Fertile ground for M&A In the period following 2008, most western economies have seen a significant drop in demand for consultancy and other professional services. As belts tightened, the appetite for hiring external experts for major projects had to be decreased. Handle it in-house, wait or forget. While successful services companies changed their priorities and business models to adapt to the changing environment, many either didn’t survive this drop in demand, or were led into significant downsizing. This in turn provided new opportunities for the stronger businesses. Healthy companies with cash in the bank or continuing access to finance could put M&A firmly on their strategy radar. Absorbing or joining other businesses provided an effective route for companies to achieve international growth, strengthening their