How Environmental Consulting Firms Can Capture Lost Profit
According to IBISWorld, going green is the top challenge facing environmental consulting firms in 2021. Customers are increasingly demanding industry services for advice on implementing more efficient practices. A close second is increasing profit margins. At a time when firms of every stripe are working to optimize operations and maximize margin, those with an environmental focus continue fighting an uphill battle to ensure profitability.
Unfortunately, inefficiencies abound throughout the industry. As a result, environmental consulting firms, which continue to be subsumed by their architectural, engineering and construction counterparts, are compelled to be as efficient as possible. Our recent whitepaper, 10 Areas Environmental Consulting Firms Lose Profit details ten areas, from cumbersome proposal processes to cash-flow inefficiencies to poor time-entry protocols, which hinder operational performance and cut into profitability. We outline three of those areas below:
1. Lost Opportunities Because of Poor Focus
Too many environmental firms are haphazard in their pursuit of new projects. A significant flaw is seeking work that is not necessarily suited to their strengths. This is typically because they lack awareness and understanding of which markets are better suited to their skills, and instead of zeroing in on those, they take a more general approach. They may chase more opportunities, but tend to lose bids because they aren’t the best match. A clearer understanding of prevailing economic trends and emerging government requirements would mean higher win rates, which means more profit.
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2. Project Management Immaturity
The recent SPI Benchmark made it clear that only the top fifth of all consultancies are proficient in project execution. This includes effective management of resources, on-time project delivery, and cost-effective practices while still ensuring project success. Superior project delivery is the foundation of environmental firm success; poor project management can negatively impact profitability in the near-term, and undermine client satisfaction over the long haul, meaning a poor reputation and lost business.
3. Inefficient and Non-integrated Processes
Scrutinizing processes at a project and even an organizational level is something many firms fail to do. Most are dedicated to the day-to-day task management, and fail to evaluate processes and performance from a higher altitude. This can be a serious oversight when considering the financial impact of inefficiency. One study completed by IDC revealed that the typical employee can spend 30 percent of their workday, almost three hours, trying to track down information essential for their job. That adds up to an entire workday per week. Factor that in with inefficient administrative efforts and the drain on employee productivity -- and thus profitability -- becomes profound.
To learn more about ways to improve your profitability, download 10 Areas Environmental Consulting Firms Lose Profit here. And to learn more about sustainability best practices please join us on Thursday, August 12th at 3:00pm EST for our webinar: How Firms Are Putting Sustainability Into Action with Dr. Andreas Georgoulias, Director of Sustainability and Risk, from Environmental Financial Consulting Group.
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