Home How AI Overcomes the Professional Services Industry’s Challenges

How AI Overcomes the Professional Services Industry’s Challenges

The rise of technology-based business models is disrupting market dynamics, intensifying competition, and transforming the landscape of the professional services industry. Professional services firms must incorporate technologies like Artificial Intelligence (AI) and Machine Learning (ML) to enhance agility and streamline workflows.

Adopting technology can help businesses effectively manage resources — accurately bid on projects, and upgrade their processes to stay relevant and become future-ready.

The recent Global AI Adoption Index 2022 survey revealed that 35% of companies reported using AI in their business, and an additional 42% reported that they were exploring AI technologies.

Professional services organizations that implement AI can easily analyze real-time data across multiple functionalities to identify market gaps, forecast project estimates, automate back-end processes and thereby gain a competitive advantage.

This article will help professional services organizations understand how AI can boost their competitiveness and help them tackle industry challenges.

Key Challenges Faced by Professional Services Organizations and Where AI Can Help

Professional services organizations face various unique challenges, like managing increasingly complex projects. And identifying and addressing revenue leakage. Also, many professional services organizations use siloed legacy systems.  These disconnected systems result in fragmented information, incomplete status reports, overbilling customers, inefficient use of resources, and uncertainty about project costs and profitability.

AI-powered professional services automation (PSA) solutions can help organizations gain real-time visibility and insights into critical metrics like work-in-progress, backlog data, utilization, and margins, without any manual intervention. AI-based PSA platforms also enable effective resource utilization across locations and projects by identifying gaps that may cause a resource crunch or project delays.

AI technologies can help professional services organizations:

  • Improve employee utilization rates
  • Avoid scope creep and revenue leakage
  • Retain top talent
  • Create more profitable projects and improve margins
  • Improve customer satisfaction and retention

What Is AI?

AI is the simulation of human intelligence processes that allows machines to perceive environments, comprehend ideas, learn from experience, solve complex problems, adjust to new input, and augment human capabilities.

Three things differentiate AI from everyday software:

  • AI can calculate and learn from data accurately
  • AI can perform tasks intelligently without explicit instructions
  • AI can reason and act humanely

By combining these abilities, artificial intelligence provides greater accuracy than other types of software and can accomplish tasks that would otherwise require humans.

Impact of AI on the Professional Services Industry

Artificial Intelligence is changing the way the professional services industry interprets insights, optimizes operations, and future-proofs their enterprises. Professional services firms can utilize AI-based technologies to aggregate data, predict customer analytics, and make automated business decisions while reducing the time spent on repetitive tasks.

AI also allows organizations to focus on areas that require critical thinking skills and can help create a value-based system.

Professional services organizations that fail to leverage AI will be hamstrung by manual processes and will likely experience volatility.

How AI Can Help Professional Services Organizations

Artificial Intelligence can drastically increase business efficiency by automating repetitive tasks, accurately projecting budgets, and offering an additional layer of security. Plus, incorporating AI into daily business processes helps professional services firms expedite projects.

Organizations that understand the potential of AI technologies and incorporate them into their business can improve operations in the ways outlined below.

Improve Resource Utilization

Improving resource utilization can directly impact the growth of a professional services company. In the post-pandemic workplace ecosystem, a business’ resources are often spread around the globe — making it difficult for the company to monitor and effectively manage them.

The resulting lack of oversight causes projects to underperform, sometimes with serious consequences, such as revenue loss, quality issues, and client dissatisfaction.

By incorporating AI, professional services organizations can ensure that resources maximize their billable time across projects. AI-powered software such as Polaris PSA can help PSOs easily determine whether their resources are available to take on new projects or if they need to hire more resources to meet demand.

Retain Top Talent

In today’s world, it is increasingly difficult to retain top talent. Lack of career growth opportunities, poor work-life balance, and low compensation are the most common reasons why workers resign. High attrition can lead to massive organizational costs while adversely impacting productivity and revenue. All companies need to focus on retaining talent. Many businesses will need a PSO (professional service organization firm).

AI-powered systems can aid in talent retention in several ways. They can:

  • Enhance the employee experience by automating mundane tasks that may lead to burnout or poor performance
  • Analyze which employees are most likely to leave and suggest potential resolutions
  • Combine flexible scheduling with strategic workforce planning to promote better employee work/life balance
  • Recognize when employees are facing difficulties or spending most of their time on one task, so the company can find effective ways to resolve the employee’s concerns

Avoid Scope Creep

Project scope creeps undoubtedly poses one of the greatest challenges for professional services firms. Lack of planning, poorly defined requirements, and inefficient monitoring can lead to project scope creep. This results in cost overruns and timeline delays, as well as a decrease in customer satisfaction, which can derail a project.

To tackle scope creep effectively, it is important to keep track of metrics such as hours worked, project status, and completion date. An effective AI system provides PSOs with an in-depth view of their projects and helps them track those metrics in real-time. This data allows firms to take action and improve forecasting before scope creep becomes a problem.

AI-powered solutions allow professional services firms to create clear project schedules, predict milestones, accurately project deliverables, forecast project efficiencies, and mitigate scope creep risk. All these parameters help improve and optimize the project, benefitting the professional services organization in the long run.

Optimize Efficiency and Margins

Professional services firms often struggle to gain visibility into their day-to-day processes. Spreadsheets, paper trails, manual entries, and other siloed processes can no longer track productivity, revenue, and other critical business metrics accurately. In addition, with increasing project complexity, PSOs often struggle to manage projects, time, resources and costs efficiently. To overcome these issues, professional service firms need actionable data.

With AI-based solutions, PSOs can unite all project data, productivity metrics, and billing information, then analyze this data to find solutions that optimize workflow efficiency and increase margin. Investing in an AI solution that is configurable, scalable, and flexible can help a professional services organization stay on top of its game and improve its overall operations.


Professional services organizations need the right people, projects, processes, and skills to improve their operations and optimize productivity. Implementing AI helps professional services organizations improve resource utilization, retain top resources, optimize productivity and increase overall efficiency while allowing them to stay on the right track.

Featured Image Credit: Photo by Karolina Grabowska; Pexels; Thank you!

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Arpan Patra

Arpan Patra is currently working at Replicon as a content marketing manager. He enjoys good books, traveling, and writing on a wide range of subjects, from coffee to technology.

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