UK’s management consulting market finds itself in a period of strong growth. Last year revenues of the industry’s top tier segment grew by around 8% – almost four times faster than the British economy – with as result that consultancies are heatedly seeking ways to capitalise on the growth agenda. Besides ramping up client operations, as well as bolstering recruitment efforts to bring in fresh talent, partners at consulting firms should raise their focus on optimising their internal resourcing function, if they do not want to miss out on commercial potential, says Mark Robinson, co-founder of Kimble Applications.
There are, according to Robinson, two fundamental challenges in setting up a resourcing function to represent the kind of best practice that will help consultancies fuel their growth. First is that all information in any organisation, and especially that pertaining to resourcing in management consulting, is in constant flux, with the picture apt to change if someone falls ill or a sale is delayed, for instance. This dynamism makes visibility difficult. “What you need to know usually exists somewhere within the company, but often resides in someone's head, and it can take too long to get it out of there and into, for example, a spreadsheet that everyone can trust”, comments Robinson.
The second is that one of the most potent sources of early information about demand for resources is the salespeople. “Typically, but obviously not exclusively, their personality type is extrovert, not process-driven, and not detailed.” This means that sales professionals are reluctant to provide this critical information to the company until they feel it's absolutely necessary, “when the sale is more or less a sure thing.”
In a time when consulting firms are facing significant growth potential – according to the MCA, UK’s consulting industry grew by 8.05% in 2015, while Source Global Research’s estimate puts growth at 8.20% – firms should, on top of the traditional expansion moves (account teams, recruitment, associates, etc), also seek ways to optimise their end-to-end sales to staffing process. Together with his team at Kimble Applications, a professional services automation (PSA) company, he has come up with a number of suggestions for how any consulting organisation can take immediate, practical steps to curtail resourcing bottlenecks and, in doing so, position their business advisory for faster growth.
1. Connect salespeople's compensation to the right behaviours. Incentivise your salespeople to log the nature of every opportunity early, and to keep it up-to-date as new information becomes available. They're money-oriented, so make sure part of their remuneration is based on keeping to the right habits. If they do this, you will have valuable information early, from which you can allocate resources more effectively and, ultimately, profitably.
2. Make it easy for the sales team to do what you need them to do. In addition to, or instead of, monetary rewards, ensure the sales team knows how this will ultimately make their lives easier. For example, show them how if they log opportunities in an easy and sensible level of detail early on, it is far easier for the business to provide them with the resources they need to close the deal. Equally, ensure resourcing managers are reciprocating: when each team is regularly updating and reviewing the information available, it becomes far easier for them to collaborate synergistically for the good of the company as a whole.
3. Test sales forecast accuracy. Things slip. That's not necessarily anyone's fault, but if it's not accurately modelled, how can demand and supply ever be matched? Snapshot forecast versus actuals at the beginning and end of every period and get your salespeople to explain any differences, whether in overdelivery or underdelivery. They might not like it, but it will help drive the right behaviour; many salespeople come from a product background, where slippage (so long as it remains within the fiscal year) is not really that important. In professional services, a day's slippage is a day's revenue and profit lost forever. Consider making an element of their compensation dependent on their forecast accuracy, or penalising consistently inaccurate forecasting harshly to help salespeople to truly understand that close date is king.
4. Earmark resources before the win. Most firms don't because operations doesn't believe sales' promises until the paperwork is in front of them. Try putting probabilities in front of pending deals and earmark resources when the probability passes a certain threshold (for example, when verbal sign-off is given). Even if you're only pencilling people in at this stage, it gives you a potential 2-4 weeks more to find the right resources for the job. If it all falls through, you're no worse off than you were before, but if the project goes live, you can start work earlier and therefore start billing earlier.
5. Resource according to data. Again, working with probabilistic project demand means sales has the data to back up those requests for additional resources they're always coming to you with. And, if they’re encouraged to provide a data-based rationale, this helps ensure resources are assigned according to what is most likely to boost sales, rather than determined simply by who’s shouting loudest.
6. Differentiate between role skillsets and named individuals. Particularly in small to mid-size consultancies, project and senior managers will put pressure on resourcing managers to give them specific individuals with whom they prefer to work. Professionally speaking, however, how often do they really need 'Charlie' as opposed to simply any ‘senior architect’? Recognising that someone else with the same skillset will be able to do a job well allows consultancies to scale, while, if there’s only one ‘Charlie,’ not recognising this can prevent scaling.
7. Keep a report on who's coming off projects in the near future. Even more crucially, make sure it's accurate by checking with the individuals: the system may tell you Deirdre's coming off the project at the end of December, but she'll know if it's actually likely to drag on for a few more weeks. When you know who's really becoming available and when, you can get sales to go out and sell them with appropriate lead time. At the very least, you won't have the nasty surprise of people sitting for too long on the bench because you weren't prepared for them to be there!
8. Surface all possible resourcing options early. Most consultancies only look to the contractor market late in the process of beginning a new project: it's a function of leaving resourcing decisions until the last minute, which forces them to either shuffle existing resources around or else resort to whichever contractors are available - quite possibly paying over the odds for the privilege. Considering the contractor option early gives you a larger pool to choose from, or even make new permanent recruiting decisions.
9. Look out for trends in resourcing requirements. If you notice that certain skill sets are in increasingly hot demand, you can take proactive action to hire or cross train consultants accordingly. Getting ahead of the curve like this allows you to steal a march on your competitors and mop up big contracts while they are still scrabbling to find appropriate resources.