Whether you’re driving in NASCAR’s opening race at Daytona or driving your consulting business to greater heights, responsiveness makes a huge difference. A car that responds to the driver’s nudges more quickly is — taking the competence of the driver as a given — going to win more races than one that does not.
Similarly, a business that responds in a more agile fashion to the twists and turns of fate will see more successes, scale faster and cope better with the challenges that come with rapid growth.
If something malfunctioned in NASCAR’s early days, the best-case scenario would be limping to the pit for an emergency diagnosis and, hopefully, a fix. Then the car would go back out on the track to try and make up for lost time. Drivers and their pit crews planned pit stops for routine maintenance. However, any unplanned stops depended on the driver’s intuition.
Today, a whole host of electronic devices continually measure, record and transmit data in real time to the engineers responsible for designing and keeping the car on the track. The system tracks engine performance, the car’s suspension status, fuel reserves, tire temperature and pressure, G-forces and the actuation of the controls by the driver.
This means engineers can spot problems as they occur and resolve them quickly to minimize the impact on the race. Moreover, it helps them plan vehicle upgrades for the next race. Imagine having the same visibility and forward-planning capability in your professional services organization.
The sooner you have the information you need to make business-critical decisions, the better. But most consultancies today take a long time to gather and verify the information they need. Often, it can take three weeks into the next month before they can find out what happened in the previous one.
Problems with cash flow, pipeline, forecast revenues, active projects, debtors and creditors, utilization rates and bench strength surface long after it’s possible to do anything about them. This is a big problem for small to mid-size firms that use spreadsheets or home-grown software to record information. And each fledgling department is like a semiautonomous fiefdom with respect to its data.
If PSOs could look ahead …
What if that information were always accurate and updated in real time, freely available to all those with a vested interest in it? It wouldn’t matter when, where or what device they use to access the information. The business would stop managing by looking in the rear-view mirror and start planning for the race ahead.
Many companies have taken steps to address processing delays to see their period-end processing time drop from weeks to hours.
Here are a few examples of what this can do for a PSO:
- Monthly revenue forecasting changes to weekly. This provides a view of any work that’s slipping, which means resource planning can be updated to keep utilization high.
- Consultants with time on their hands due to slipped or early-completed work can be assigned to help the sales team close new deals. The sales team can be strategically directed to focus on project work matching the available skill sets.
- Information from sales on what’s in the pipeline and the likelihood of winning it advises senior management and resource planners on what new hires or cross-training to invest in to meet upcoming demand.
- Cash flow improves because invoicing is accurate and ready within hours of the project’s completion. Why wait until the end of the month to send it out?
- Monthly senior management meetings go weekly, or even daily. Today, management interventions often come too late to be useful. Increased, real-time and accurate visibility means they can make small, strategic nudges to the business or individual projects as needed, bypassing the need for wholesale interventions.
All of these examples lead to happier clients and repeat business. It means a healthy backlog. It means increased utilization, and most importantly, it means increased profits and scalability.
If all this sounds easy, it’s not. There’s a more important change to make than investing in software. Refer back to the NASCAR example. If engineers have access to all this real-time car performance data but don’t review it and act on it in real time, what benefit stands to be gained? Whether for that race or future ones?
If the consulting organization has secured technical access to the real-time information needed to run the company, what benefit is gained if consultants aren’t updating timesheets and expenses in real time? Or if business development isn’t forecasting and updating the pipeline accurately and regularly? Or if resource planners aren’t constantly re-optimizing? Or if all this is happening, but senior management isn’t reviewing and acting on the information regularly?
None of the changes happened overnight for NASCAR. And cultural change won’t happen overnight for the professional services industry. (Fortunately, the examples of those that have gone before show that it will only take weeks, rather than years for individual organizations to make the change.)
What it takes for PSOs to look ahead
The point is that removing processing delay from the information you use to manage your PSO is a journey. The PSO works its way from dispersed data and delays, through a joined up approach to data, and finally arrives at the cultural change, the true enabler of rapid and sustainable growth. It’s not necessary to do everything at once. Every step a firm takes on this journey enhances its ability to scale effectively. However, simply updating or upgrading old IT systems will merely automate what you currently do. It’s the business practices that need to change.
Take the same kind of holistic approach with your organization as you would with client projects. Look at the best practices based on where they’re already being demonstrated, whether that’s with software, people or processes. Consider the needs of the whole business before investing in anything. It’s not enough to just make information more timely and accurate. You’ll still be running your company based on the limitations of old-world thinking.
In doing so, you’ll lose the opportunity to take timely corrective action using your data. Instead, if you take the opportunity to mold your culture to fit the totality of the best practices your technology can afford you, you’ll build an organization that’s primed for continuous, supportable growth. That starts with responsiveness. Drivers, start your engines!