How Should Professional Services Firms Manage Their Resources?

Posted by blair-pringle on May 20, 2014

managing resources

Capacity planning is one of the biggest challenges faced by Professional Services firms and can often skew the accuracy of forecasting revenue for the coming months, and even worse can lead to undelivered projects, customer dissatisfaction, and even lost clients. Many firms within the Professional Services sector, unless amongst the very top performing or who have effective capacity planning practices in place, wouldn’t make any profit at all if it wasn’t for free overtime provided by employees that is common in our industry.

Managing your resources for current projects effectively is critical. But to take that one step further, understanding and making sure that you have the right amount of resource, skills, and time needed in the future to meet the demands of your clients projects can be a dark-art and is often very difficult to manage, let alone perfect. There’s a common saying for all business that is: People are your greatest assets. This couldn’t be truer for the professional services industry, and actually they are your only greatest assets. They have to work at a level of healthy utilisation, but not so much that they burn out, getting this just right is the difficult part.

Most organisations manage capacity planning very manually; they do this by using a combination of gut-feel/judgement, and very basic calculation. Judgement of the right team mix and calculation to ensure that the hours needed multiplied by the hourly rate for that employee’s rate adds up to no more than the agreed fee level. Whilst this method can be OK for smaller firms offering a limited number of services and skills, this can become simply unmanageable when these two begin to grow and expand as your organisation evolves and as you try to stay competitive and relevant. Most organisations also have fixed account teams handling

Best practice for managing capacity planning


1. You need secure visibility across your organisation to:


  • Increase utilisation rates – Having a tool that allows you to know who is doing what at any given time will help you to manage your resources more effectively. Department and project managers can use a resource planning tool to monitor the load and availability of people when planning projects and allocating resources. Having a clear picture of your resources can reduce the risk of lost profits caused by under-utilising resources that could have been assigned to profitable activities.

  • Empower your resource managers/resource planner – Enrich your resource managers/planners with information on skills, capacity and expected load of your employees. Detect the need for specific skills in future projects whilst avoiding capacity shortages and overbooking. Spread the workload evenly within the resource pool to increase employee satisfaction.

2. Leverage the right talents on your projects:


  • Plan your projects efficiently – you need a toolset that means project plans are no longer based on “guesstimates” but can guide your resource requests directly on project plans and estimates.

  • Larger projects – If you are working on larger projects you need a solution that allows you to view full work breakdown structures so you can assign the right people to the rights tasks.

3. Ensure the tight coupling of your project pipeline and resource planning

Having a resource planning solution for your business is critical and will allow members of your organisation to accurately view revenue forecasts based on all project and resource booking, keep employee’s motivated and highly utilised, and providing you the power to close out projects on-time and for a profit. Are you confident that you can accurately forecast revenue for the coming months? Do you have visibility of how your resources are allocated at any given time?