The report uses data compiled from a survey of 480 executives working in professional services industries, including consulting, IT Services, and marketing agencies, to identify the key challenges and opportunities for providers in 2017. Key trends unveiled through the research include a marked increase in market competition, substantial struggles in finding resources to take on new projects, increased reliance on services subcontractor networks to deliver client work, increased specialization in firm capabilities, and increased geographic expansion to meet client demands.
"The State of the Services Economy report and its underlying market research were driven by our desire to better understand the transformation taking place in the services sector," said Ray Grainger, CEO of Mavenlink and co-author of the report. "The results are both illuminating and compelling. The research confirms there are substantial forces driving services models in new directions. Services providers need to understand this transformation, challenge long-standing operating assumptions, and innovate to thrive in this new reality."
Key data points revealed in the report include:
- 78.3% of services leaders state that business conditions are changing quickly, and 20% said faster than ever before.
- 62% reported an increase in market competition in the last year, with 36.6% saying it's coming primarily from new entrants into their space.
- 84.6% have diversified their services offering in the last 12 months, and more than two-thirds diversified as a result of clients requesting new services.
- 58% of services organizations are now primarily project-based, vs. retainer-based, driven by client preference for shorter term engagements. Project-based work is also trending up for the majority of firms.
- 89% of services organizations believe it's important or critical to be able to tap a subcontractor network to scale the workforce to meet surges in demand.
- 95.6% of services firms are actively seeking new relationships with subcontract resources.
- Primary drivers for working with on-demand work teams are: the need to scale up to meet client demand (44.5%) and the ability to tap specialized skills that full-time/in house team members do not have (35%).
- 36.3% turned work away last year due to lack of resources.
"The report emphasizes that services leaders sense major business change is imminent and urgent," noted Stowe Boyd, research analyst from Gigaom and co-author of the report. "We hope that what we've learned will help companies in the services economy understand these forces in greater depth, and be able to make plans for the future and execute them."
Mavenlink delivers enterprise-class Software as a Service (SaaS) that transforms how businesses work with distributed teams, contractors and clients around the globe. Mavenlink's innovative technology suite enables organizations of any size to successfully manage and scale their people, projects, and profits. Consulting firms, IT services organizations, creative agencies, and professional services teams in more than 100 countries are running their businesses more effectively and predictably with Mavenlink. Mavenlink was recently named to the Red Herring 100, and a 2015 Cool Vendor by Gartner, the world's leading technology research and advisory firm. Learn more at www.mavenlink.com.
* Gartner, Cool Vendors in Program and Portfolio Management, 2015, Robert A. Handler, Matt Light, Donna Fitzgerald, Teresa Jones, 24 April 2015.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/new-study-reveals-36-of-services-firms-are-turning-down-work-and-other-findings-affecting-growing-services-industry-300388496.html