Entrepreneurial Consulting for Emerging Technology - Free Essay Sample

Introduction

Company X is among the major players (the Big Four) in the professional service industry. It is renowned for services such as accounting, legal, management consulting, corporate finance, tax, assurance, audit, and investment advisory, among other services. The professional services field is dynamic and undergoes rapid evolution. External factors such as globalization, rapid economic growth, and regulatory policies substantially affect the industry. It faces multiple challenges that can limit market growth (The Business Research Company, 2019). Prospecting new knowledge and innovative business opportunities are fundamental to these organizations' long-term performance, survival, and success (Rogan & Mors, 2017). These factors are essential to consider in ensuring that professional service firms (PSFs) like company X remain competitive. Therefore, among the most appropriate strategies to guarantee success and relevance of PSFs are innovation and adaptation. The following is a proposal offering entrepreneurial consultation for an emerging technology department to identify technologies aligned with company X's organizational framework to define the future business.

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Critical Review

The term “professional service organization" describes knowledge-intensive firms that use their personnel's expertise to offer solution-based services to clients (Azzolini, 2013). This definition illustrates that knowledge is the primary output of these firms (PSFs). They offer a variety of intangible products based on their expertise to their clients. It is also their principal input because they employ skilful staff with high proficiency for their specialized services (Castaldi & Giarratana, 2018). Most of the income-generating workforce in these organizations often identify as an established profession(Empson et al., 2015).

Often PSF descriptions seem broad and ambiguous. Moreover, professional services cover a wide range of sectors and practices. From the above definition involving established professions, PSFs include segments such as legal services, accounting firms, architectural practices, and engineering consultancies. These are the most identifiable PSFs. Some have subsectors, some of which can stand as singular professional service entities. For instance, accountancy subsectors include tax preparation, payroll, and financial auditing services (Selectusa, 2019). Engineering activities depend on the field of engineering, for example, power generation and distribution, manufacturing, industrial activities, transportation infrastructure, and commercial and institutional architecture, among others (Selectusa, 2019). From the knowledge-intensive activities definition, other PSF sectors include management consulting, some financial services, investment advice, marketing, advertising, and executive search, among others.

The confounding factor arises when some sectors that fall within these definitions are not in the PSF category. Medical practices and investment banking, for instance, fit the established profession and knowledge-intensive descriptions, respectively. However, they are not professional service firms (Empson et al., 2015). Nordenflycht (2017) gives three distinguishing features for PSFs. This industry involves knowledge-intensive activities, a workforce of established professions, and minimal capital intensity (Nordenflycht, 2017).

Professional Services Market

The professional services market is as broad as its segments. It includes all clients interested in the services and related goods that the different kinds of PSFs offer. These services provide support to institutions and individuals in enterprises of all types and sizes, across all industries. Often clients seeking professional services are involved in processes where human capital is the primary input. Several steps characterize the professional service delivery process. First, the professional services organization (PSO) establishes a relationship with the client as a medium to understand and solve their problem. The PSO (or PSF), following the client’s request for assistance, assigns capable staff members as individuals or teams to deal with the issue. These employees then deliver the services in the form of knowledge, expertise, or skills to the clients required (Wood, 2019). For the professional services exchange, the PSO and its clients have a formal agreement or contract on monetary compensation. The client pays for the materials, time, and labour costs the firm incurs in the service delivery process (Azzolini, 2013).

The economic significance of the professional services industry is very high. It employs many people and injects substantial revenue into the economy. In 2013, four segments (legal, accounting, architecture, and management consulting) employed 14 million individuals and generated 1.6 trillion U.S. dollars’ worth of revenue (Empson et al., 2015). They were the largest national employer in 2016, with over 20 million employees (Selectusa, 2019). The revenue also continued experiencing a significant annual growth rate. In 2018, 1.2 million PSFs provided 9.4 million jobs in the United States alone (Selectusa, 2019). Projections that this number will continue to increase. The combined revenue for legal, accounting, engineering, architecture, and management consulting services went up 11% from the previous year (2017), totalling approximately 2 trillion U.S. dollars (Selectusa, 2019). In 2017, North America had the largest market share, followed by Europe at 37% and 25%, respectively. Africa had the smallest at 4%. In the U.K., these professional and business service firms employ 13% of the workforce and make up 11% of productivity (Riley et al., 2020).

Analysis of the Professional Services Industry

Various business tools facilitate a critical appreciation of the industries from different perspectives. In this analysis, the PESTLE and Porter’s Five Forces assist this endeavour. PESTLE (also PEST/PESTEL) stands for Political, Economic, Social, Technological, Legal, and Environmental analysis (Sammut-Bonnici & Galea, 2015). Political factors such as deregulation and regulation trends, government policies, security controls, administrative regulations, taxation policy, merger, and commercial restriction and foreign trade guidelines, among others, affect the PSF business environment. For instance, the continuing trend towards deregulation will reduce restrictions and open up the innovative way in business models and service delivery (Franck, 2020). Geopolitical situations shift very rapidly; therefore, PSOs must adapt to ensure success in the professional services industry. Politicians with a powerful influence on policy and regulations affect the industry significantly. For instance, in the United States, PSFs feel the impact of various policies by President Trump. Political decisions such as U.K.'s exit from the European Union (Brexit) also affected the industry (Swot & Pestle.com, 2020).

Legal forces fall under the same classification as political. However, various purely legal factors affect the PSF, including labour conditions and transparency. It is required of the PSF to guarantee proper labour practices, uphold human rights, and ensure diversity and inclusion in their workforce. Transparency is necessary for quality and accurate service delivery in this industry. There are various ways to establish transparency. These include having specific codes of conduct, internal audits, compliance standards, self-reporting, revealing conflicts of interest, publishing customer satisfaction reports, disclosing executive compensation, among other quality measures (Globalreporting.org, 2013). Forces such as political (legal), social, economic, and technological also fall in the environmental factors category. For instance, the industry follows a code of conduct (legal factor), which considers environmental factors like sustainability and ethics. It is also essential to consider unforeseen environmental factors, such as the recent coronavirus pandemic, because these also significantly affect all industries (Schmidt, 2020).

Global Economy

Currently, this industry is among the leading drivers of the global economy. Economic factors, such as market value, affect the industry. Between 2014 and 2018, the compound yearly growth rate for the international market value for professional services in the U.S. totalled to about $5,700.2 billion. In 2019, the average yearly revenue grew by 10.6 percent from 2018 (Mazareanu, 2020). Projections in the industry show an expected compound annual growth rate of 9.1% to nearly $8,082.4 billion in the next two years (2022) (Wood, 2019). They also predict a rise in consumption expenditure to 600 billion U.S. dollars by 2023 (Schmidt, 2020). The 2016 “1000 Companies Europe Report” stated that the sector generates 600.2 billion euros, comprises 3.9m companies, and employs 11.5 m people 2057 (London Stock Exchange Group, 2016). In the U.K., the professional and business service sector currently injects 190 billion pounds to its economy (Riley et al., 2020). The industry hires a significant percentage of the global workforce, especially in areas with a large market share. However, with the industry's dynamic nature and ongoing disruption, change in the economic environment is inevitable. For instance, factors such as increasing competition, globalization, and technology advancement will constrain growth (Franck, 2020; Schmidt, 2020).

Social factors place substantial demands on PSOs, for instance, changing client behaviour. Professional service consumers now focus more on value, superior quality work, prompt service delivery, and billing transparency. Due to the increased agility of the environment, digital innovation, and advanced technology, clients have easy access to information and alternative options. Therefore, they demand to appreciate the value for their money, for instance, through fixed fees rather than billable hours. They can compare pricing for different PSOs. Some also prefer to choose separate providers for various tasks (Franck, 2020; consultancy.uk, 2019). Social media also affects this industry, like many others. The new norm is for businesses, even in the professional service sector, to use social media platforms for marketing and brand awareness. PSFs can identify and engage clients, deepen their relationships, and boost satisfaction. Social media also helps to monitor and analyse competition (Ramesh, 2017).

Conclusion

Thus, technology such as cloud computing, big data, mobile technology, and artificial intelligence, among others, causes disruption and necessitates adaptation. They revolutionize how people and businesses interact and facilitate novel business models and innovation (Franck, 2020). They also offer easy and convenient access to information. These are considerable forces in the professional and business service industry. Instruments such as data and analytics technologies are indispensable and commonplace in PSFs.