6 Tips For Ensuring A Profitable Professional Services Firm

Posted by martin-gribbon on March 6, 2013

ensuring a profitable consulting firm

Professional Services firms are facing increased competition and must adapt quickly to changing customer and employee expectations if they are to succeed. Finding ways to use technology to gain an advantage over your competitors is key for those firms aiming for profitability and growth in 2013 and beyond.

Following a recent interview with IDC’s Group Vice President, Michael Fauscette we’ve compiled 6 tips for staying ahead of your competition and growing a profitable Professional Services firm.

1. Make sure you have visibility across your firm

In order to make the critical decisions, you must have easy access to timely and factual information. Professional Services firms should have complete visibility into clients, projects, resources and financials from first contact to revenue collection and project closeout. An integrated ERP system with dashboard views that drill-down into specific details is crucial.

2. Win repeat business from your existing clients

Winning repeat business can be as valuable to your firm as winning new business due to the comparatively lower cost of sale. However, ensuring client satisfaction on all projects is key if you are to be successful. Firms must ensure that they can monitor project progress and have resources to deliver on the agreed statement of work in order to maintain a favourable reputation amongst clients.

3. Bid on the right projects to win new business

Understanding the type of projects that your firm can handle and what resources exist to complete the work is essential to developing quick and accurate proposals which have a higher chance of winning. Use an integrated ERP system which allows you to easily discover which of your staff contributed to previous successful projects. This enables you to match the right skills to the right projects and show your prospects you have a track record of success in that particular project area.

4. Get the right resources on each project

In a project based business, where people are your assets, you must have a systematic method to monitor utilisation and minimise risk. Firms must be able to determine the utilisation rate on any given date, as well as forecast utilisation based on the pipeline. This requires an understanding of resource skills, available time and project needs over time. With this information to hand, Professional Services firms can optimise opportunities by moving resources between projects to ensure success.

5. Reduce your admin time

Reducing time spent on administrative duties means creating time which can be billable. In a recent IDC study, almost 20% of Consulting firms reported that Consultants spend 6-10 hours per week on admin tasks – reducing billable capacity by 25% every week! To reduce admin time, Professional Services firms must use an integrated management system which connects information across the firm as opposed to disparate systems and spread sheets which increase workloads.

6. Integrate your front office and back office systems

Professional Services firms that integrate their front and back office systems report many benefits such as bidding on the right business, getting proposals out faster, better pipeline visibility and more accurate revenue forecasting.