Here's how to make sure you're not pranking your CFO on April Fool's Day. You can reliably forecast your consulting revenue for the coming quarter by following these easy steps.
Here's how to make sure you're not pranking your CFO on April Fool's Day. You can reliably forecast your consulting revenue for the coming quarter by following these easy steps.
If you want to open a new professional services business, you'll need to know about the quote to cash process, scheduling an engagement, creating and negotiating a Statement of Work, creating reliable estimates, strategic portfolio management, how to manage and motivate consultants, and how to report and influence Key Performance Indicators for the health of your business.
Many small Professional Services Organizations (PSO) get started with Excel because it looks like a perfectly fine accounting system. However, the problems of using it instead of a good PSA quickly come clear as soon as there’s a second person who needs to use it.
Twice a year, I produce a short training module for our sales teams to learn how to sell professional services. You may think that developing this sort of training module is unnecessary at a software company, or that selling consulting services are the same as selling products and subscriptions. However, for certain businesses, there is a definite need for this kind of training. This is an easy win to improve your sales processes and reduce the potential tension between sales and consulting.
This week, I held two evening webinars on managing professional services firms. We brought together consultants, directors, and vice presidents from the east and west coasts to learn about the best practices for managing a worldwide consulting firm. My personal thanks if you were able to attend. On March 2nd and 3rd, we’ll be continuing our conversation and discussing the Quote to Cash process.
After eighteen months of this experiment, our preliminary finding has been that using NPS as a KPI has substantial value for an embedded experience or expertise-based PSO. Personnel reviews are simpler and include the direct voice of the client. Consultants also understand the evaluation criteria, and we developed a standard set of NPS goals for individual contributors.
Last night, I gave a presentation on the quote to cash process at the IEEE Consultants Network in Vancouver, Canada. My favorite audience question was, “how would you recommend a firm start encouraging our professional services managers to look under the couch cushions?”
“Going under the couch cushions” is my semi-joking name for a strategic backlog review. I have children, and there are only two things I find under my couch cushions: spare change, and messes that need cleaning up.
In professional services, the spare change you find in the backlog comes from those customers with an odd number of hours left and an open Statement of Work
Many times they only have a vague sense of what is in the Statement of Work. After all, the Statement of Work is a contract. And contracts must be for attorneys, not project managers, and certainly not for technical staff.
Very efficient sales teams use the availability of senior consultants to drive deals to closure. As part of the sales cycle, they ask the client the date of when the project must be finished. You should subtract the project duration, and then another four to six weeks. The resulting date is when the client must complete their purchase without risking their schedule.
Trust is easy to understand. From a client's perspective, once they've had enough bad experiences with professional services organizations, they will mistakenly assume that all professional services firms work the same way. As a result, they stop trusting all professional services organizations.
“Our new manager has a background in finance and is an external hire to the firm. It is all about billable rates and utilization now, not doing what’s right for the client. What do you think I can do?”
Very few firms audit the outbound communications of their recruiters. Similarly, very few recruiters offer to allow their clients access to those outbound communications. This has greater potential for reputational damage than an errant sales person harassing a single customer, as that would affect just a single client relationship. In this case, a recruiter that makes your firm look incompetent can dissuade an entire category of skilled professionals from ever wanting to work there, or to recommend that company to a colleague.
Several years ago, I worked as a senior consultant at an embedded Professional Services Organization (PSO). Our team developed business processes and technical solutions that saved the company hundreds of thousands of dollars annually. We received no recognition from executive management, and it took time and distance for me to understand how to avoid the same fate for my current team.
The survey covers a small amount of demographic data—participants’ roles, how they learned to manage a professional services organization, and how many years they've been doing so. Current professional services consultants, managers, and executives can participate in the survey. There are twenty knowledge questions, drawn from a pool of over two hundred, organized around the eight areas of a professional services firm. This is to determine roughly how well each participant knows the topic; an exhaustive study would be possible, but also exhausting. This survey should only take about ten minutes for participants to complete.
Professional Services Managers handle assigning consultants to projects. As a result, one of the most familiar internal emails and questions we receive from sales teams is, "when's the next time a consultant is available?" It is possible to see this request multiple times a week at the start of a quarter, and multiple times an hour towards the end of the quarter. Regardless of the structure of your Professional Services Organization, answering the same question for different people repeatedly throughout the day is entirely avoidable.