Professional services firms need network services that can connect international operations reliably, flexibly, cost-effectively and securely. This Executive Brief highlights the major business and technology trends taking place in the professional services sector in Western Europe, focusing on the increasing internationalization of the industry and the advantages of adopting innovative ICT solutions.
I D C E X E C U T I V E B R I E F
A P r o f e s s i o n a l S e r v i c e s I n d u s t r y B r i e f C o n n e c t i n g I n t e r n a t i o n a l B u s i n e s s e s S e c u r e l y September 2007 Angela Vacca
Sponsored by: Easynet
Introduction Professional services companies are becoming increasingly international to achieve economies of scale and to respond to the increasing globalisation of their clients. At the same time, they are under pressure to improve efficiency and responsiveness and to comply with an increasingly complex regulatory environment.
As a result, professional services firms need network services that can connect international operations reliably, flexibly, cost-effectively and securely.
This Executive Brief highlights the major business and technology trends taking place in the professional services sector in Western 1 Europe, focusing on the increasing internationalisation of the industry .75 and the advantages of adopting innovative ICT solutions. 482.20.9 Key Issues in Professional Services 3.P While most professional services companies are small, the yla companies that dominate the market are those that have grown their tI ,n business in size, complexity and geography, through both organic ali growth and M&A. M 7210 Geographic expansion, by the nature of the professional services 2 business, requires in-country presence. However, smaller, domestic 41 , firms that can provide the in-country service, but that do not have the azn corresponding international capability, will struggle to win business oM from globalising companies. As a result, large international players elai are gaining increasing market momentum. V
The growing international nature of the professional services industry creates many pressures in addition to opportunities that affect both business and IT management. Examples of these are summarised in the following table.
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T a b l e 1
What Internationalisation Means for European Professional Services Firms Trend Description and Future Impact Consolidation Consolidation of the professional services industry is gathering pace at country level and internationally, particularly in the UK, with some smaller, national firms evolving into international organisations and thus changing the competitive arena. Geographic International expansion is becoming key for big firms. This trend increases competition and expansion price pressure, but also provides new business opportunities. EU enlargement EU newcomer countries are good opportunities for professional services firms able to operate internationally. For example, Kelly Services acquired Talents Technology, a permanent placement and executive search firm operating in the Czech Republic and Poland, while Boyden is to open a new office in Bulgaria. Improving Businesses need to improve efficiency and flexibility to streamline the services value chain and efficiency and improve the flow of information within the organisation. This is due to an increase in flexibility competition and customers' expectations and to the tight margins experienced in some segments of the industry. This is easier for companies that have achieved economies of scale. Regulation International expansion increases the burden of regulation. Unstructured Unstructured information, such as emails, continues to grow at a rapid rate, encouraging information companies to address the issue of lack of document standardisation. management Security Data security is key in all industries, but is particularly critical in professional services. Geographic expansion combined with a demand for seamless information flow within the organisation place added emphasis on the security capabilities of both the network and IT structures of professional services firms. In addition, a breach in security is likely to have far more negative business impact on the professional services sector than any other. Reputation, credibility and integrity are critical for business success. Underestimating the security challenge will almost certainly incur considerable direct and indirect costs for a firm. Diversification Many professional servi... [download for more]
