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2
The Transformation
Clearly it’s a great time to be in services. And that opportunity is growing rapidly.
The robust global services market is expected to reach $3.8 trillion by 2025. However, taking advantage of the opportunity has proved challenging. Service providers are experiencing intense pressures. The industry is fragmenting, spurring an increase in competition from major companies. And the traditional services business models are under pressure – they are facing a shift from projects to retainers, they find it difficult to ramp up/ ratchet down at the speed with which client’s demand, and they increasingly need to access highly specialized skills. Services leaders that can’t figure out how to manage their businesses through these pressing challenges will fail.
Chapter2 quote1
What do
service leaders think about the current business conditions?
7 8 %
state business conditions are changing quickly. Twenty percent say faster than ever before.
85 %
have expanded services offerings in the last 12 months. This is mostly being driven by customer demand.
62 %
said they are seeing increased competition. The greatest threat is from new entrants into their markets.
Opportunities Resources
36%
had to turn down work recently because they didn’t have adequate resources
A SHIFT FROM WORK
90%
of services organizations say project-based work makes up half or more of their work
58% majority project-based
23% 50/50 project-to-retainer work
89%
say project work is trending up or remaining consistent
54% trending toward more project work
36% the same amount of project work
Workers with view
icon-quote
There's no question that we're competing against companies that we never competed against before: Deloitte Consulting, Accenture, IBM. It's a very difficult competitive market out there, and we just have to be on our game.
Michael Roth
Chairman-CEO of Interpublic Group