How consulting firms can win - 5 pillars of success

06 October 2023 Consultancy.uk 7 min. read

Deltek has released the 2023 edition of its ‘How Consulting Firms Can Win’ guide, designed to help consulting firms set themselves up for long-term success. A round-up of the five key pillars of success explored by the report. 

1) Excellence in project delivery

The consulting industry revolves around the delivery of projects for clients. Those that achieve excellence in their delivery perform significantly better.

According to the ‘2023 Professional Services Maturity’ report, high-performance organisations that deliver projects are far more likely to use a standardised delivery methodology which results in more projects delivered on-time, fewer project overruns and fewer project cancellations.

High-Performance PSO Comparison – Service Execution

Key success factors include being proficient in setting the right project scope (together with the client), being spot on in estimating and assigning resources (i.e. team members and budgets) and ensuring strong project execution administration including rigorous time tracking and end-to-end financial management.

Other success factors include using a best-in-class project management tool to manage the delivery process, having reporting in place that can help project managers adjust plans, and having collaboration tools in place. Firms also need to have processes in place to mitigate scope creep and build in agility across the project lifecycle.

No matter how much effort consultants put into their delivery governance, getting it to the highest level of maturity is notoriously difficult. In fact, in a PwC study of over 10,640 projects, less than 3% of companies said they managed to complete their projects 100% successfully.

2) More focus on growth

Consulting firms that outperform their peers are typically also those that focus more on growth. This means that not only the partners/leaders are more geared at growing the firm, but that all parts and ranks of the organisations are optimised for growth.

Down the line, more growth unlocks several key benefits across the firm (such as scaling the business and projects won, increasing client impact, attracting and retaining talent, etc), which then in turn reinforces better performance.

Average Median Growth Rate Over the Years

So, what differentiates growth-oriented consultancies from their peers? According to Deltek, they have several common traits.

Firstly, they have an entrepreneurial mindset embedded in the company’s DNA and culture. Secondly, they spend more on sales, marketing & business development, and as a result, they enjoy a better reputation in the marketplace and have a stronger pipeline of prospects and future projects.

Furthermore, growth-oriented firms have robust reporting and financial visibility across the business, meaning their leaders are empowered to make bolder decisions at the right time. Examples include investing in new offerings, bringing in senior recruits, or even closing acquisitions.

Notably, high growth firms have been found to be more client-centric, able to maintain a laser-sharp focus on client satisfaction. They have processes in place to understand their client’s needs and level of satisfaction and ensure that everything possible is done – proactively – to keep their clients happy.

Further reading: High growth professional services firms lead in sales & marketing.

3) Profit at the core

While most consulting firms often have growing in size and capabilities as their key goal, growth alone is never an assurance of greater profitability. The top performing consulting firms understand this and place profitability – not revenue – at the centre of their business strategy.

Driving higher profitability can be supported by multiple streams, including ensuring bigger margins on project activity, offering additional services such as training solutions or managed services, improving the efficiency of internal processes, more tailored and profitable pricing, and ensuring better hand-over across a firm’s project portfolio.

Maturity Matters!

A key part of the profit mix is keeping a day-to-day focus on maximising consultant utilisation rates. Profitable consulting businesses set and consistently exceed high targets for utilisation. They have strong processes to track how and where people are deployed, and make sure hours consumed align with the project plan. When people come close to ‘transitioning to the bench’, top performing consultancies are quick in assigning them to other projects or ramping up sales endeavours.

4) Access to talent

The success of a consulting firm relies heavily on the strength and stability of its team members. Top talent should have the experience to make informed decisions and keep projects on track. Deltek’s guide demonstrates that a consultancy firm’s profitability is enhanced when project teams operate predictably and efficiently.

This efficiency is achieved through budget-minded team members in key roles who support smart processes and continually seek new efficiencies to improve profit margins. In summary, attracting and retaining the right talent is a fundamental necessity for consulting as it directly impacts project delivery, growth and overall profitability.

5) Stronger execution with enabling technology

Technology plays a crucial role in executing strategies of consultancies. Implementing the right technology can make consulting firms more efficient and effective, and provide benefits such as improved project visibility, a single source of truth, and consistency in implementing best practices.

Professional Services Primary Business Applications

While many consultants are skilled in using mainstream technology and off-the-shelf apps, these may not fully support all a consulting firm's processes, especially as the firm grows or handles multiple projects and users.

For project-centric businesses, such as consulting firms, using industry-specific tools and systems is often the most compatible choice, as off-the-shelf solutions can become less flexible as the business scales, according to the playbook.

About the report and Deltek

The annually refreshed ‘How Consulting Firms Can Win’ guide provides insights and strategies for consulting firms to deliver excellent projects, realise growth and profitability, nurture and attract talent, and stand out from their peers.

Deltek is a leading global provider of enterprise resource planning software, project management and information solutions, with a focus on project-based businesses such as consulting firms.