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Most managed service providers (MSPs) offer varying degrees of professional services to help organizations. An example of this would be launching a new IT initiative that can be a highly profitable source of revenue. However, competition for the expertise needed to deliver those services is often fierce. This is leading providers of these services to look at generative artificial intelligence (GenAI) as a way to augment their existing staff.

Businesses expect to rely on AI more

A recent survey of 1,005 executives and other professionals providing IT services, services embedded within software, or working for an independent professional services firm found that the primary reason organizations are investing in AI is to increase efficiency (81 percent), service quality (69 percent), and profitability (66 percent).

Conducted by Certinia, a provider of a platform for managing professional services automation (PSA), the survey also finds that adopting AI is tied for first place with navigating significant economic change, as a top external challenge these organizations will face in the next 12 months (54 percent). This is followed closely by rising labor costs and increased competition, which are tied at 49 percent.

The methods for overcoming these challenges will be to rely more on AI (61 percent), followed closely by increasing skill sets (60 percent) and managing services more efficiently (57 percent), according to the survey.

Not surprisingly, the top internal challenges survey respondents cited are improving productivity (58 percent), increasing profitability (48 percent), and balancing workloads (46 percent). That’s critical because nearly two-thirds of professional service providers are unable to achieve utilization performance above 70 percent, the survey noted.

85 percent of respondents said their organization intends to increase the size of their professional services teams in 2024. Approximately 50 percent reporting those increases will represent a more than 10 percent increase in headcount.

At the same time, nearly every respondent (99 percent) said their organization expects their professional services organization to contribute significantly towards achieving its key business objectives. Additionally, 63 percent note professional services are a recognized profit center for their organization.

Only time will reveal AI’s impact on professional services

It’s not apparent to what degree AI will make providers of professional services more efficient. However, everything from providing summarizations of services and creating sales proposals to writing code will require much less time. Theoretically, that should enable the individuals handling those types of tasks to be much more efficient. The degree to which that will enable teams to handle more clients, however, has yet to be precisely ascertained.

Less clear is what impact AI will have on the demand for professional services. Organizations need help determining how best to operationalize AI, especially when it comes to data engineering. There should also be more modernization projects as the cost of switching platforms steadily declines. This is mainly because rewriting code will become a lot easier. However, many organizations will soon be taking advantage of prompts to automate workflows using generative AI platforms in a way that is not likely to require nearly as much expertise.

Ultimately, generative AI should prove to be a boon for professional services organizations. But like most innovations, it will inevitably cut both ways.

Photo: VesnaArt / Shutterstock

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Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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