What the top consulting firms are doing to consistently deliver profitable projects
by: Stephanie Salguero
The consulting industry is experiencing unprecedented shifts, with increased competition, tighter margins and the continued war on talent. Deltek analysed data from the 2017 Professional Services Maturity™ Benchmark report to look at how top professional services firms manage to be profitable and what you can learn from it to achieve success with every project.
|The consulting industry is experiencing unprecedented shifts, with increased competition, tighter margins and the continued war on talent. Deltek analysed data from the 2017 Professional Services Maturity™ Benchmark report to look at how top professional services firms manage to be profitable and what you can learn from it to achieve success with every project.
Lead your firm to success
“Leadership issues (communication, well understood vision, mission and strategy,) can impact the ability to grow (Finance and Operations), staffing levels (Human Capital) and the ability to effectively deliver projects (Service Execution)” (2017 Professional Services Maturity™ Benchmark report)
Leadership impacts every dimension of a business and the best leaders set out a clear vision and strategy for growth. Developing a sense of community among employees and clients, and building a reputation as a visionary within the industry helps businesses get maximise their chance of success across every engagement. In addition, strong leaders set aside time for their people to grow, helping shape an employee-centric culture.
• Share the vision for growth across different channels. Make a big impact to your firm’s reputation by having senior leaders talk to the press, attend events and share opinions via social media.
• Make sure the vision for growth is clear to every department. The more you invest in your people, the more committed they’ll be – and the more they’ll share in your ambition and success.
• Commit to employee development and invest in improving their skills. Management should make budget available for training and/ or team building to boost business performance – it’s a win-win.
Working with the right clients on the right projects is a great way of growing revenue. The top performing consulting firms invest in technology that increases their focus on developing profitable new business and maximises the profitability of every new project. Dealing with clients at a senior level and delivering services that meet their objectives adds value to client relationships – and this helps to generate a larger number of referrals.
• Make sure key employees have all the right skills and practice leaders are experts in their specific field to add significant value to every client.
• Encourage teams to collaborate closely. This will help to share knowledge more effectively, improve internal processes and ultimately deliver stronger work for clients.
• Putting a client governance program together. This way, you’ll always know what to work on to improve your client relationships.
“Professional services organisations spend on average between 1-2% of total revenue on training, but the best-performing firms are those that align training to business needs.” (2017 Professional Services Maturity™ Benchmark report)
Successful consulting firms often attract and retain the best talent simply by being great places to work. The top consulting firms are often recognised for this in national and international awards. By investing more in training their people, the leading professional services firms build a reputation as good employers and benefit from greater profitability per employee. By adopting employee engagement programs they create a unique and inspiring working culture. Smarter recruiting strategies and swift on-boarding processes help businesses get fit for success by boosting employee productivity.
• Look at what senior staff can offer to your current people. Ask why the best talent would want to join and what would make them stay.
• Motivate employees by providing a set of benefits that fit with company culture – like flexible working or health & wellness programs.
• Identify who you want to attract, where they are located and how best to approach them. The best firms benefit from word-of-mouth from their employees. Ask what your people say to their peers about your firm.
Organisations with the highest level of service execution maturity deliver over 89.3% of projects on time (2017 Professional Services Maturity™ Benchmark report)
The leading consulting firms invest in technology that enables them to manage clients’ expectations through every step of project delivery. With professional services automation (PSA), for example, you can synchronise operations and project management, reducing the complexity of workflow processes. And with enterprise resource planning (ERP) applications, you get an integrated system that brings together project, financial and resource management. With these systems in place, you can raise delivery standards and maximise project profitability. They help maintain project schedules and optimise project management, time/expense capture and billing.
• Review service delivery track record over the past year. Look at successes and challenges to help identify areas for improving.
• Identify where automation could help better manage projects. Manual admin can be a big drain on resources.
• Give your people training on elements that can add value, make their lives easier and boost productivity.
“On average, top professional services firms report 55% higher revenues per project.”
(2017 Professional Services Maturity™ Benchmark report)
The most successful consulting firms generate more revenue per employee, project and consultant and they keep revenue leakage to a minimum. They have a greater focus on revenue and profitability targets and have the right tools in place such as project-centric ERP to manage resources, costs and project delivery.
• Make sure you have the right tools to manage project performance. Monitor resources and external suppliers in real time to help optimise your project delivery.
• Put processes in place for monitoring project profitability. Set checkpoints for this and make sure senior executives are able to react if/when profitability is at risk.
• Build up a backlog of revenue. Create a state of financial stability and protect your firm from unexpected challenges and market volatility.
The elite players in your industry constantly monitor performance throughout the entire lifecycle of individual projects and business as a whole. They are led with confidence and nurture client relationships. They employ the best people and invest in them. They constantly monitor and improve service delivery and effectively manage their finances. With these internal processes and constant improvements, they are able to produce the best work, keep customer satisfaction and client retention levels high and, ultimately, maintain good levels of profitability.
To learn more about in-depth KPIs and strategies behind winning and managing projects, developing people and measuring project success visit Deltek’s best practice report library.