Industry-Leading Resourcing Practices

Resourcing good practice for professional servicesFor Managing Partner Marc Lacroix of resource management consulting firm RTM, one of the biggest challenges facing the companies he works with is the rapidity of technological change. To not only cope with that but also seize the opportunities it presents depends on optimum management of human resources.

Interviewed by technology journalist Ian Murphy, Lacroix argues that too many firms are in reactive mode, scrambling to see who fulfil engagements next week. This mode leads to poor decisions. But looking further ahead – “what is the picture in three months time?” – enables firms to meet challenges better.

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Welcome to the PS Insights Podcast series, sponsored by Kimble Applications. Professional services organisations strive for efficiency, success, and growth. This series is intended to provide key insights in how to achieve this from industry leaders.

Ian:     Hello my name is Ian Murphy, and today I am talking with Marc Lacroix about industry leading practices for resourcing in mid to large professional services organisations. Mark is a founding partner at RTM Consulting, a firm that specialises in helping service organisations get better at what they do. He has worked with many global clients to improve the efficiency and effectiveness of service delivery organisations. With extra emphasis on strategy, resource management, project delivery and PS automation. For nearly 10 years at RTMC Marc has developed a strong track record of transforming services organisation.

Marc:   Thanks Ian it’s good to be with you today. And, very excited to be talking about this topic of resource management, our company has been around for over 10 years, I have been there that long. And resource management has always been one of our primary focuses, we have seen the evolution of how organisations have improved this. But still a long way to go, what we believe to be the most important asset of a service delivery organisation which is their people, their human capital. What more important thing to get right than that part of your business.

Ian:     What are the major challenges companies face when it comes to predictive resource allocation?

Marc:   I usually talk in two terms, one is at what point is your scale too big for a spreadsheet, that number is really small. 10 people, 15, 20 people at any point beyond that it gets a little unwieldy. The other thing is that, organisations tend to start more organically with resource management through basic staffing. Hey we need to know who is going where tomorrow, or the next day or the next week. They get caught in that trap for longer than they should, what they need to is, we need to see what is happening next month, next quarter. We need better tools, better information, better ways to treat that information. To really know what are my needs in three months, in four months that is one of the bigger gaps that still my clients, and clients I come in contact with, fall short of.

Ian:     How do companies reconcile that difference between the selling and provisioning of resources?

Marc:   Very difficult area, there is two parts to it. One is their cultural and organisational aspect, often times my clients will say, I can’t get sales to do what I want them to do. Which is an understandable thing, not that it’s intentional or malicious, but sales is sales and services are services. The idea that we have to influence or change the sales team is a little misguided. What we need is their information, and what we need is their information to be somewhat directionally accurate. So, that we can build off that information and figure out what that means to us. Two things solve that one is, a degree of automation they have their systems CRM, we have our systems PSA. We need those two systems to help make this job easier by synthesising that data and aligning that data. The second part is, we have to take that information from sales and turn it into information that is useful to us. So when I give you 100,000 dollar opportunity that’s all the sales people care about is the number. What we care about, is that 100,000 dollars is made up of four people working for two months at this duration of these roles. So incumbent upon us to be able to translate that, now we have meaningful future looking data that we can work with for resource management.

Ian:     Is a two way integration required to prevent the overselling of resources?

Marc:   In my world there is no such thing as overselling resources, because resource management done well is a continually fluctuating capacity model. We never want to put a lid on how much demand sales and other people can generate. What we want to be able to do, is rapidly adapt to the demand. When we think of forecasting and looking into the future we always think of the scenario where we never have enough. But we also have scenarios where we have too many, and we have to make decisions about how to redirect some of our resources to more productive means. It really goes both ways when it comes to managing capacity, I do believe it’s a little more one-way street in that we really want to adapt and understand the demand and appropriately align our team members and our resources, to meet that demand whether it’s surging or whether it’s ebbing a little bit as well.

Ian:     How do we get HR involved in PSA?

Marc:   I didn’t highlight our adjusted time resourcing enough, but that’s one of our primary methodology that we employ with our resource management consulting. One of these spokes on the wheels that framework is sourcing of resources. And what I tell people that we consult with or train, is that what sourcing strategy is the best for you, I say all of them. All of them meaning you should always be actively recruiting and warm recruiting for some of your consistent and persistent needs. You should have a well established partner network, and or sub contractor base that you can draw from, and flex up and flex down. You should be continually looking at re-skilling and developing your own talent to direct them to some of the new areas that seem to be hot. Some companies sell multiple solutions, or multiple capabilities and that changes. Once you get that capacity view of the future part of your interpretation of that is not just, how many do I need, but what kind. And when you are starting your overall strategy you may not simply want to hire, you want to have that right mix of partner hiring as well as figuring out how you can re-purpose people as well.

Ian:     How are you seeing companies managing the impact of re-skilling?

Marc:   It definitely depends on market conditions but I see it because we work a lot with software and hardware technology companies, in the shifting of technology itself. I have got a few clients who are in the infrastructure space and help with those IT services and virtualisation of those environments is a game changer. Moving away from heavy premise based to more virtualised and cloud and hybrid clouds has really changed the game on the kind of people they need, new technology is coming in very rapidly in this space as well as big data. So they are looking at team members that have been around for 10 years, that are very talented but have just been not exposed to this whole new area. Those are the areas I see it most, other areas I think you leverage a skills database that really needs to be automated, again an area where spreadsheets just don’t work at any scale. They are looking at ways to say, well how do we get more diversification of people, how do we cross skill so that we are not trying to shift a person from where they are today, to tomorrow. But we need more diversity, where a smaller shop that maybe needs to have more capability and have people that are more diverse in what they can do for us. It gives us more flexibility and resource management if a person can do A, B and C verses just A.

Ian:     How should companies manage the cost of having to suddenly acquire additional resources to fill a gap in their project schedule?

Marc:   If you are in reactionary mode, if you are scrambling on a Friday afternoon to figure out who is going to be on the project on Monday. Inevitably you are going to be making some poor decisions relative to the wrong cost. You are probably using maybe partners that are more expensive or you are getting the senior person when you should be … or you sold the junior person. The other part is not just, I will say poor practices and processes, but I do think that this is where he will say, and Kimble will come in strongly. Is they are able to present that information at the point of attack, at the point of making those resourcing decisions it’s right there. If you have done your job you know exactly the relative cost of the people that you are choosing among. And that should be a factor in the staffing decision itself, often times if you don’t have that information people know that there is a little bit of an implication, but they won’t start seeing it until the time comes in, and the budget starts tallying up. And then they realise, wow this person is 25 per cent more expensive than we planned, and that can add up very quickly. It’s critical to have that information about your resources at the point of decision making, and at the point of staffing. Now you still may have to resort to putting in the more senior person, because no one else is available. But you are going to probably tag that for replacement or backfill as quickly as you can in many cases.

Ian:     How much detail should companies have when it comes the cost of an individual resource?

Marc:   What we advise, and I know that when we work with Kimble, and Kimble advises this as well. Is don’t get it down to the exact amount of cost, we try to get folks to think in terms of bands and generalised costs for a couple of reasons. One, you want to give the project managers and the people that are responsible for these projects and putting people on it and those budgets. Many people are reticent to create equivalent one for one, hey I can derive what your salary is based on what your cost is. And most folks are very skittish about doing that, the natural answer is to assign a cost to a band of resources, so that you smooth over and generalise what their costs are. With that goes, not getting into too much of the weeds of exactly what the fine tuned cost is. But just to know the directionally correct plus or minus a certain tolerance, that we are in the right band, we are in the right range for where we want resources. And normally with roles and people that get assigned to projects, I would say your staffing across maybe five bands, maybe more. But I commonly see five, five levels of cost in your core of all the roles that you staff. And you are not over complicating it, you are trying to keep it somewhat straightforward and simple. On the back end you could take longer term strategies and say what, we need to dial up or dial down our use of partners. But when it comes to your staff and their costs it’s easier to keep it somewhat stratified and simple.

Ian:     What can companies do to prevent shortage of resources?

Marc:   Comes back to definitely interpreting the future, getting the future and interpreting it. 80 per cent, 85 per cent of your future work is tied up in the project plans of your projects. That should be in-house, and you should be getting the project leaders and managers to effectively plan out their projects well, and knowing what the resource requirements are. The other 15 to 20 per cent is your sales data, is your inbound demand. That is definitely trickier. it’s a smaller portion, but it is trickier because one you are relying on sales to keep that information current in terms of timing and amount. But also of course the burden as I mentioned to, is go in and actually convert those amounts into actual resource requirements. In doing so that’s a huge step in being less reactionary, there are always going to be things that come up quickly, or things that we want to be able to react to. I always had a mantra, I never want to say no. What we try to do is, you set governance pieces in place to make sure that even the data alone can’t tell you the whole story, we try to come together through points of interlock to talk to the sales people. To talk to the project manager to say, help me understand more, that’s what a good research manager would do. Help me understand more of the context, is there a risk, not a risk, but a good thing that this project will be extended. Is there a chance that this might end early, so you are picking up on some of those clues. Some of that is process and organisational structure that we usually advise folks to establish, so that you get a little bit of the human touch and interpretation of what is going on, in addition to what just the cold hard data is telling you as well.

Ian:     Are companies aligning their processes enough to allow PSA teams to predict and provide?

Marc:   The biggest hurdle when we talk about process is control. Often times as organisations are growing or shifting their focus, trying to get to a more modern and sophisticated resource management approach, and automation with it. The question always come up of control, these are my people, or this is my practice I am used to deciding who goes where, when. I don’t want somebody else making that decision because I have to live with the consequences of an unsatisfied customer, or over budget work or something like that. What we try to advocate and certainly Kimble supports is, everybody can have it both ways. What we are trying to do is get senior delivery leaders out of weekly staffing calls, and out of weekly staffing decisions. What we are not trying to do is remove them from the critical decision making of who goes where. What they will find once they accept this direction that they need to go in, is great I don’t have to get involved in every single decision of everything that is going on. But what is going to come to me is escalations or summaries of what decisions were made in a given week. This is again a thing that great automation can support, by getting them to that point of feeling trustful of the people involved, of the resource managers making the decisions on their behalf. Knowing that they still have veto power, they still have override power, but giving up that control and knowing that they are going to have the visibility and transparency of what is going on, by not directly being involved. Is one of the biggest hurdles, but once we get them there I would say it’s smooth sailing after that. But we know we have arrived and transformed or changed the way the organisation is going to operate.

Ian:     Is automation of process leading to simpler and more effective processes?

Marc:   This is very dramamine to the work we are doing, and definitely dramamine to the work we are doing with Kimble. Of course Kimble will say, that it’s very process centred and it truly is. The Kimble heritage really comes from professional services and consulting delivery, they are practitioners who designed a system to suit that model, not to try to force-feed it into the model. However we still take an approach in every one of our projects where given the opportunity to, some customers just need to get it going quickly. But given the opportunity we certainly want to start the conversation with, what do you need the process to be, what do you want to function as a business. Now we are going to of course share with them what the industry thinks they should be doing in their situation. So there is an aspect of industry best practice, there is how they want to operate given some of their needs and constraints. And then there is how the system operates. We like to start the conversation with that mix of, how do you need to operate and relative to industry practice, almost all of the time then we can go over to Kimble and it can be supported. Kimble of course can configure and do things multiple ways, what we don’t want to get into a conversation is, how do you want to do it, here is three options, how do you want to do it. We really want to start the conversation is, let’s keep this system over here for a minute, let’s talk about this process, let’s get a sense of how mature or not it is. Let’s figure out what the right way to do it is, and let’s now overlay the automation to match it. Our success rate on that is 99 per cent, we will always find a way to automate the process. But what’s worse is to automate the wrong process, that’s far more damaging.

Ian:     When we think about digital transformation one of its goals is greater automation throughout the whole of the supply chain. Are you seeing customers wanting more detail in integrating around resources and resource management?

Marc:   I definitely see an increase in the integration of the information the clients want from the systems themselves. The most common area is more on the back end right now. The whole billing and invoicing part, where many larger clients of our clients if you will, don’t want to receive a paper invoice in the mail. They want you to go into their procurement system and actually load the hours, they want you to load the invoice. They want all that back end automated, and they want it done through their system. So that back end integration is getting a lot of attention and causes a lot of pain for people that do that, PSA is starting to get better at providing that. In the midst of the project I see more integration not so much on the resourcing, we definitely want to keep that a little closer to the vest within our companies. But what they are looking for is more integration to the project behaviour status, risks and assumptions and status reporting and things like that. We have to deliver status reporting and budget information to our clients, what often happens is we create the one internal status report and budget, and then go and create the external one that we send to our clients. Those days need to come to an end, and that’s where you are talking about business integration. It’s information integration, let’s generate the information one time, and then let’s send it to multiple audiences in different ways. And I do see Kimble starting to get across more points of contact with customers, is being able to recognise that there are multiple parties that need to see this information. And we need means by which to get that data to them formatted or unformatted, as well as ability to filter out certain pieces of data that you wouldn’t show one audience verses another.

Ian:     If I were to ask you the top three things that companies need to start thinking about, as they review the way they resource, what would they be?

Marc:   I would say the first thing that they have to do is, make sure that they have the best data that they can. Data is the most important because when people question the data it makes the house of cards crumble a bit. The minute you have one project that is anticipated and people can’t interpret or understand what the requirements are for that project. It throws your whole capacity model a little out for kilter because you are not quite there, there is always going to be a question mark in your head. Should we go and find more resources or not, completeness of data is probably one of the number one priorities. Second is creating these interlocks as I call them, it’s something we emphasise a lot. It’s really the processing and our cultural component that goes with the automation is that, while we have good data we have to sit down with our counter parts and interpret that data together. When you are my manager and I am coming to you as a practice leader to say, I have this data and this data tells me I need to go hire five people in the next three months. You have to believe that data, if you don’t you are not going to authorise me to hire those five people. Those interlocks and building those trusted exchanges with the data and that people are interpreting it the same way, is critical and one of the hardest things to overcome. Lastly it is a data intensive thing, I try to emphasise that a lot that we, not only have to curate the data going in. But we have to serve up that data, formulate that data, report on that data pretty actively, daily, weekly, monthly. What we recommend is that people are making decisions daily, weekly, monthly which means I need information on what to do on a daily, weekly, monthly basis. Once we have that information we can rely on it, we know how to interpret it together even across our different roles and department. That to me are the three elements that really can take you from average, somewhat tactical resource management process to one that is really driving your business and leading you where you need to go. And managing your profitability to go with that.

Ian:   Thank you very much. You have been listening to one of a series of podcasts dedicated to sharing best practices for professional services organisations. These can be found on