Times are changing and the economy is picking up - this means consultancy firms have to snap out of 'short term survival mode' and begin taking a long-term attitude to maximising revenue and growth, writes Deltek.
The key to long-term survival is profitability - profitability that will fund the investment required to stabilise and also to ride out any future recessions or low-points that are an inevitable part of business-life. And because profitability is intrinsically linked to the suitability of the business system a firm uses, the best place for consultancies to start building their financial stability is by turning their attention to the technological systems and platforms they so heavily rely on.
But what should you look out for when evaluating your technological resources; and what business benefits can you expect as a result?
When reviewing your IT systems you may find a number of disparate systems across your firm that are clumsy and inefficient, which take up time and create workflow bottlenecks. You may discover you have an outdated enterprise management system that does little to automate essential tasks and cut back on human error. Or you may discover outdated spreadsheets where you least want them, pockets of siloed working practices and manual processes that fail to support standardisation.
The good news is a centralised business system can help in all of these areas by sitting at the heart of your operation, providing a consistent and coherent platform from which each department can function. A project-centric enterprise resource planning (ERP), for instance, will turn those antiquated practices on their head. It will cut costs by speeding up efficiency; and also provide a real time snapshot of your firm to improve strategic planning and decision-making for better results. But it’s not only in saving money that ERP can help; it can also play an important part in raising the revenue your firm desires by helping to win more business.
Winning the best business
That’s because an ERP platform is able to provide data about margins, win rates and turnover trends for the client’s services; offering visibility into each account to identify the least-performing clients and the most valuable. From this insight your firm will understand more about the kind of firms it should be working with - and the ones you will want to avoid.
As more of that desirable business comes in the door, managing and resourcing it properly will give the best return possible. Here an ERP system will assist in identifying and allocating the skills and experience of your workforce so that the most appropriate and cost-effective support is assigned to each project. Imagine the money your firm could save if it could cut back on freelancer costs by simply utilising the in-house team you already have. Taking better control of your resources will help you spot the times when a project is dangerously low on resources before deadlines and budgets are compromised.
With every billable hour adding to that all-important bottom line, providing your employees with the tools they need to record time accurately is also a vital part of maximising income for your firm. Time recording systems that can be updated 'on the go' - via smart phone technology for example - means a consultant's hours can be instantly processed into an invoice template together with expenses data as part of a comprehensive ERP system. This is a must for any firm that relies on time tracking as it makes such a difference to generating revenue - as discovered in our ‘The Hunt for Profitability' report - and also helps with compliancy.
Is the price right?
Making sure your firm is billing the right amount for the service it provides is also an important part of revenue building. It's no easy feat but ERP will provide you with the key to getting your firm's fees right.
How? Through reaching out to everyone in the firm including those in sales, finance and senior management and giving wider visibility to budgeting and pricing. They may help identify areas in the business where costs are not being recouped, or they may have certain ideas about the going market rate for certain services or products. But for this, it’s necessary to provide them with a business system that provides company-wide historical data about overheads, costs and servicing particular clients.
This data provides invaluable insight into pricing information from the past, and what has and hasn’t turned a profit. The result is never underselling your firm's expertise again, but staying competitive enough to ward off competition and attract the business you want.
When looking to build a solid technological infrastructure for your firm, look for a system that will help you tackle the competition with long term, viable and profitable strategies for future stability. Modern ERP systems can tick all the boxes when it comes to providing the data you need for achieving your firm’s goals and ambitions so take a good, honest look at how your firm is performing and the technology it’s using and think about what can be done on a practical level to take a serious step into the future.
You can find out more about Deltek at www.deltek.co.ukread more