Even in a time when technology can take the complexity out of the most intricate of operational processes, you can’t take the people factor out of the professional services industry. The key to growing profitably and winning new business is to attract and retain your most valuable asset – your people – along with disciplined project services management.
A diverse grouping of people-focused professions, the professional services industry includes advertising, accountancy, architecture, IT services, legal services, and management consultancy companies. These firms struggle to accurately forecast bids that promise to deliver quality projects on time and on budget, with careful optimization of resources to handle capacity. In a highly competitive market, misallocation of resources means missed profits. Root causes include inaccurately tracking billable hours, spending time finding replacement consultants as people roll on and off engagements (which can take up to 130 days!), and over- or under-staffing.
Does a small or midsize service company stand a chance?
When small to midsize services companies focus on niche markets, they can compete against the largest of firms. According a recent UK HM Government report, Growth is Our Business: A Strategy for Professional and Business Services, small to medium-size services firms are key contributors to accelerating the local economy, where “barriers to entry and concentration levels are generally low, with intellect, ideas and personal contacts more important than capital assets.”
Streamlined project delivery and billable time accuracy drives profitability
Challenged by getting the right people on projects, increasing margins with client satisfaction, and inability to scale, small to midsize service businesses can be inhibited from growth and expansion. Roland Berger, a strategy consultancy firm, adopted a cloud strategy to scale end-to-end project bidding-to-delivery-to-invoicing. This provided Roland Berger with real-time visibility into pipeline and revenue forecasting and capacity planning, which allows the company to grow into newer markets. Quantifiable results include:
- 56% More billable time spent for project management resources by the top 25% of services companies as compared to average services companies
- 50% Reduction in time required to create final customer invoices
- 7% Higher customer satisfaction where detailed customer profiles, preferences, and transaction history are maintained
Talent is a competitive advantage to increase revenue growth
Employee turnover in the services industry is rampant, yet firms that choose to invest in their people’s alignment to strategic business goals see decreased attrition.
- 32% Less employee turnover by using analysis of workforce data to design, implement, and monitor workforce-optimization strategies
- 8% Higher employee engagement where training programs that develop the workforce are in line with organizational objectives
Premier Farnell, a multichannel high-service distributor of electronic, maintenance, repair, and operation products and specialist services, understood that in order to become a high-performance company, it had to execute well. Moving away from manual and disparate processes to align people’s performance, goals, and rewards to the company’s growth strategy was a critical step to driving revenue. The company experienced eight quarters of consecutive growth, with 92% of employees understanding strategic business goals with clearly mapped individual objectives. This level of transparency gives the management team the ability to react to people, performance, and development needs. HR director Michael Esau says, “We operate in a fast-moving, low-margin, high-volume business with a multichannel strategy, so proactive actions leading to even small improvements in productivity can make a big difference to the bottom line.”
David v. Goliath
Did you know that only 31% of services companies have the ability to easily identify, reserve, and deploy the right resources for the right projects? In the services industry, a project result is only as good as the consultant staffed on it. Even the largest of service companies struggle to connect their people seamlessly to project sales, management, and delivery, a direct tie to profitability and growth. If smaller services businesses adopt automated cloud-based sales, project, and workforce management strategies, they can focus on niche capabilities developed by their human capital intellectual assets and personal relationships, rather than manual spreadsheets and consultant timesheets. The “people factor” will set them apart and serve as a true market differentiator.
For more employee management best practices, see How Empowering Employees Creates a More Engaged Workforce.