By Lakshmi Raj, Co-founder and Co-CEO at Replicon
accountingTODAY | November 18, 2019
At one time, the endless ups and downs of a seesaw may have been great fun, but in your professional services firm, it’s a different story. In this world, resources are the greatest operating expense. As an industry heavily reliant on these highly skilled workers, managing projects and resources for both the busiest and slowest seasons can be a real challenge. With limited predictability, firms are left either hiring expensive staff for an overabundance of incoming projects, or benching resources once projects have abated. The resulting options are less-than-ideal: Should you regularly leave high-paid resources on the bench, or lose a project?
In the meantime, firms’ business dynamics are changing, adding another layer of complexity. Many skilled professionals are leaving larger enterprises behind in favor of freelancing, or gigs at boutique firms, which only focus on one or two practices for clients. Both the rising popularity of freelancing and these specialty agencies have introduced some fierce competition, offering cheaper rates for clients and higher wages for consultants — leaving enterprises fighting to retain their resources.
What can a professional services firm do to switch out the seesaw for some balance? It can happen in three important steps:
1. Plan for projects from the start. While no one sets out on a project without any plans, ensuring that everyone stays on the same page the entire time is a different story. From the onset, projects should include open communication between team members and all internal and external stakeholders. Setting expectations is important and having a proper handshake between sales and delivery can ensure everything runs as planned.
For this to happen, each of these teams must work together closely and view their business from the same lens. Using the data from previously completed projects is a good start. After that, you can closely monitor each step to confirm the project is staying on track.
2. Allocate resources properly. It’s always a good sign to have an abundance of projects rolling in, but if resources are poorly utilized, you’re still setting a project up for failure. Again, the dizzying seesaw comes into effect for the unprepared: Resources struggle with the overload, or end up benched due to underutilization. Ultimately, with everyone stretched too thin, the quality of services declines — or your firm is paying a tidy sum for an unused resource ready to leave for a boutique firm instead. How can these situations be avoided? By analyzing historical data, businesses can anticipate seasonal downtrends in productivity and take charge ahead of time. Managing allocation with multiple key metrics will set the stage for success and avoid scrambling in case of unavailable team members.
3. Understand skills, training and hiring needs. Services firms run on the specialized skills of their resources, but it’s not enough just to have these employees on the docket. Equally important is placing the right people on the right project. There is no one-size-fits-all team for any given project, and having visibility into your resources’ availability and skills can ensure that each one gets the best people for the job — satisfying clients and making your job simpler. Connecting time to outcomes also enables project managers to analyze and forecast the skill sets and future resource utilization needed for hiring and training needs.
Until you can find a reliable approach to governing your projects and resources, the dreaded seesaw will continue its ups and downs. Only by collaborating on a single source of truth — time — can a professional services organization stop the pattern. With everyone on the same page, services firms can account for 100 percent of their costs and resource time and get true visibility into their employees, projects, clients and billing.
Original Source: accountingTODAY
Author: Lakshmi Raj, Co-Founder and Co-CEO, Replicon