Internal inefficiencies hinder UK firms’ growth despite AI focus

New research from Dayshape has highlighted that internal blind spots are emerging as a significant barrier to growth for professional services firms in the UK, with nearly half missing revenue targets last year due to issues largely within their control.

Missed revenue

The study, based on responses from 200 senior leaders at mid-to-large professional services firms, indicates that 44% of firms failed to achieve their revenue targets over the past year. While external market conditions were acknowledged, respondents pointed to internal inefficiencies such as unreliable forecasting and capacity limitations as leading contributors to missed targets. Inaccurate forecasting was blamed by 30% of leaders, while 27% cited capacity constraints as their greatest disruption. Additionally, 14% reported significant setbacks from project overruns and write-offs.

Operational visibility

Only 25% of leaders expressed confidence in their organisations' long-term operational planning and discipline. Many firms are encountering challenges due to a lack of insight into capacity, profitability, and workload balance. The absence of reliable operational data increases the risk of overcommitting resources, misjudging profitable services or clients, and formulating growth strategies on incomplete information.

The research also identified a disconnect between perceived and actual resource utilisation. While 86% of leaders believe employees are being utilised effectively, 31% admitted to lacking a clear view of team-level capacity. This disparity often leads to hidden inefficiencies and risks of project overruns and burnout, which were reported by 42% of leaders in larger firms.

Workforce management

The report draws attention to issues around fairness and autonomy in the workplace. Nearly a quarter of leaders (24%) flagged unfair workload distribution as a risk for employee retention, while 29% identified poor management and lack of autonomy as ongoing concerns.

Technology investment

Many professional services firms are turning to technology to address these internal blind spots, with 32% planning investment in AI-driven scheduling and capacity modelling. Despite this, progress is uneven. Barriers include poor data quality, cited by 34% of leaders, and difficulties in integrating technology across systems, noted by 32%.

Nevertheless, technology remains a top priority on the leadership agenda for 61% of firms, signalling an area of increasing strategic focus for boardrooms seeking improved operational efficiency and visibility.

"Professional services firms are leaving growth on the table. The problem isn't a lack of opportunity, it's a lack of alignment between people, planning and performance. When internal systems don't talk to each other, and leaders can't get the crucial insights they need, growth stalls - no matter how strong the market looks from the outside. Every firm has blindspots, but shining a light on them brings opportunities. The leaders who act on them will capture growth others leave behind," said Matt Cockett, CEO, Dayshape.

Predictability challenge

Addressing internal planning weaknesses may help firms reduce risk and improve performance as unpredictability in the market increases. While predictive resource management and joined-up operational data have the potential to support growth ambitions, significant numbers of firms continue to grapple with organisational and technological barriers.

"In what is an increasingly pressured and volatile market, predictability is a company's (and its growth prospects') greatest ally. Firms that invest in a future looking view of their resourcing and operational efficiency will not only protect revenue but build the confidence and resilience to grow, even when the market shifts," said Cockett.