Emilie: Welcome to our webinar: How the Top Performing Services Organizations Maximize Profits and Growth: Positioning for Success in 2022. We’ll have some time at the end of the webinar for you guys to ask questions either in our chat panel here or the questions panel as well. I’m going to hand it over now to our host Andy Campbell to start off the webinar.
Andy Campbell: Thank you so much. Thank you, Emily, and welcome everybody to this webinar.
Really fascinating stuff that we’ve got today talking about what it is that makes service organizations really impactful. I’m delighted to introduce my co-host, if you want to move on the next, the next slide, Jeanne, show you in all your glory. There we go. This is the two of us.
So my name is Andy Campbell, I’m going to be sort of the moderator for today. I work at Certinia as, the Solution Evangelist, but I’m delighted to introduce Jeanne Urich from SPI and there might be two or three people who who who who are new to the profession who don’t know who you are Jeanne. They might be living in a cave for the past 20 years, I don’t know. But could you just give us a quick heads up on who you are and the type of work that you do?
Jeanne Urich: Thanks, Andy. I’m thrilled to be here. I am Jeanne Urich and I’m a managing director and co-founder of a firm called Service Performance Insight and we just celebrated our 15th year conducting this Maturity Benchmark that we’re going to be sharing with you today. Over 6,000 firms around the world have participated in this body of work, making it really the gold standard for the professional services industry.
I came into this line of work much like you, I was the leader of several global professional service organizations within embedded software companies. So I’ve been a Chief Service Officer of three publicly traded software companies and I’ve always been fascinated. I have a degree in math and computer science. So I’m a numbers kind of gal. The whole genesis of the work that we do was, if we could describe the key metrics that drive the professional services industry to ferret out best practices, you know, what are the things that separate the top-performing organizations from the rest? And did they change over time? Do they change by industry segment? Do they change by the size of company? And so that’s really been our life’s work and we’re thrilled to present the 15th annual benchmark to you today and we’re thrilled to work with Certinia.
We worked with Certinia from the very beginning and they’re a sponsor of this work. So thank you and nice to see you all here today.
Andy Campbell: Great thanks, Jeanne. If you can just skip onto the agenda slide and we can, we can talk through. As you said, this is 15 years, you’ve been putting this benchmark together and it’s fantastic. It starts off actually talking about how things have changed over the past 15 years or so, which is, which is quite fascinating.
This is largely the subject matter for today. We’re going to be taking some of the snippets out of that document and we’re going to be laying them out in front of you. We’re going to be talking around, what some of those mean for organizations like yourselves. We’re going to break it down into three chunks.
The first is looking at what we call, “trends within the professional services” and largely that means two things. What is maturity all about? Maturity drives improved performance. And Jeanne has developed a maturity model against which organizations can benchmark themselves and she’s going to explain that and how that impacts performance.
Secondly, we’re going to talk about the businesses in the past year, since Covid has been almost two years now. The first year, the whole world was going, “How do we respond to this?” The second year, we’re enjoying the new normal, It’s now a new sort of stasis, organizations of pivots and it’s fascinating to see what that’s meant in terms of some of the metrics around the industry. So that’s the first thing we’re going to look at.
The second thing is that in the report itself, it brings out a number of top performers, those exemplars that demonstrate really good practice and get really good results as a consequence. And those top performers exhibit different behaviors. They act in different ways. They focus on different spaces. And we’re going to call out in a number of dimensions, what it is about those performers that’s so good.
Lastly, we’re going to wrap the last two pieces together to talk, for yourselves, what are the strategies that you can adopt in order to deliver services better in these somewhat difficult times. And we’re also going to talk about technology, you kind of expect that. Certinia is a technology provider. But we’re going to talk about integrated systems and how that can translate into dramatic improvements in business performance as a result of those pieces.
That’s largely what we’re going to be talking about. Jeanne over to you. I’ll let you tell us about the maturity model.
Jeanne Urich: Many of you are familiar with this, but think it always bears some more examination because this model has not only stood the test of time but we think the reasons for success are twofold.
It’s diagnostic. So it enables you to benchmark your organization and pinpoint your relative performance vis a vis your exact peer set: by size of organization, by vertical, by geography etcetera.
But it’s also prescriptive and that’s the beauty of this maturity model because we’ve described how you run your organization from Level 1 to Level 5 in maturity.
Level 1 organizations are heroic and ad hoc and reactive, these are the babies. They’re just starting out and typically it’s all hands on deck. Any deal is a good deal. You’re just really in search of clients and client adoption.
As you move through the maturity curve, you start to introduce repeatable processes and systems individually. Initially, quite often your processes and systems are by department. You typically start off with a Finance and Operations system, your accounting system. Then you would layer in other systems and processes for Sales and Marketing processes, your CRM systems. You layer in your Professional Service Automation solution, which looks at all of the elements of service execution, resource management. You add in Human Capital Management systems to start doing a better job not only of paying your people but recruiting them, ramping them, retaining them. Then you layer over all of this, more and more processes and controls with the eye of having the right level of visibility and control but still keeping your organization intuitive and agile, so that it can quickly take advantage of changing systems.
We always look at what we call the 5 pillars which is shown on the left
Leadership: this is your strategy
Client Relationships: that’s the realm of sales and marketing
Talent: this is all of your human capital processes and systems
Service Execution: how you deliver with excellence and quality and repeatability
Finance & Operations
Throughout this presentation and the whole body of work of the PS Maturity Model really lets you see, there may be certain elements of how you run your business that are very heroic and reactive and they need to be shored up. There may be certain pockets of excellence that you want to replicate across your organization and this model helps you look at all of those facets of your organization.
I’ll just say put your seatbelts on because if you’ve seen some of my presentations, I can’t do anything without some numbers. So there are a lot of numbers, but the numbers can really speak to you because they tell you what’s going on in the world that you live in. They help you visualize, how are you doing? The good news is, if you remember back to when I did this presentation a year ago that was really looking at the full-year performance for 2020, it was a tale of two cities. We called it a K-shaped recovery. The reason for that was that the bottom 25% of organizations lost actually quite a bit of money. So the bottom 25% of organizations in 2020, we’re on the brink of going out of business. Whereas the top, the top 5%, which was shown here in green, we call these “The Best of the Best” had a great year.
Good news in 2021, which is the time this benchmark represents, the delta between the best and worst-performing organizations shrunk considerably. So everybody made some money. The good guys, the top, “The Best of the Best” still made a whole lot more money than the rest. But most organizations had a strong year.
The other thing that is remarkable about 2021 was in many ways it was one of the best years of 15 years of benchmarking. We call it a breakout year and there are several key factors that went into making 2021 one of the best years we’ve seen in the professional services industry.
First of all, there’s just unbelievable demand. What Covid did, is it accelerated, for brick and mortar, your clients, their need for digital transformation. So we’ve just seen a huge surge of demand for consulting services to help organizations in all industries move through their own digital transformation. That digital transformation had a cloud lining. All of these organizations if they hadn’t already, were looking to move to the cloud.
The other thing that happened, we’ve always seen and we’ve been charting for 15 years the percentage of on-site delivery versus off-site delivery. This has been a tremendous productivity enhancement for this industry. We saw the lowest percentage of on-site service delivery that we’ve ever seen in 15 years.
At the same time, the highest employee billable utilization and organizations are running lean and mean as they moved to this virtual environment, they narrowed leadership ranks and the extendable ability, to more and more of their workforce. These are some of the standout trends.
Andy Campbell: It’s interesting that in terms of the model of moving to remote working and that kind of thing. But what has also been paramount is this the impact on people?
Professional services is largely a people business. And the impact on the people within our organization has been quite profound. If you look at that one, particularly in the middle, where we’re talking about employee attrition last year, people were not moving. and we’ve seen a rapid increase in people, in the past year, increasing dramatically by 3% points, the levels of attrition within the business. We don’t want trained and skilled people walking out of our business.
Two debates is that just a bit of catch-up from the previous year? Or is this a trend that we see in the marketplace? Jeanne and I were talking about this yesterday, and we’ve got our own views about what we think the answers might be around that there may be a bit of catch-up.
But what was certainly true, is that there is no place to hide anymore. Employees have got an expectation they will have greater flexibility over where they can work and how they do their work.
Jeanne Urich: Absolutely, I mean, it’s been called the great resignation. The good news is that our polls are showing that some of this rampant attrition is calming down now in the first part of 2022. So potentially, the folks that were going to leave their jobs already did so in 2021 and will now be in happy new assignments in 2022.
The other thing is the nature of work has changed permanently. With this rise of virtual consulting delivery and the cceptance of it, consultants are no longer going to be happy to go back to a full brick-and-mortar lifestyle. They’re not gonna want to commute into an office five days a week and they’re gonna push back on the rampant travel which certainly characterizes this industry.
The other thing that’s going on is for highly-skilled roles. There’s no doubt that there are massive signing bonuses and perks, but I would caution companies not to go overboard. The greatest thing that you can do to attract and retain your workforce is to be a great place to work with. Egalitarian leadership, clear communication. We’re going to talk about that throughout this program. You know, make it a great place to work. Certainly the leadership and cultural things that organizations do are of incredibly great importance.
Andy Campbell: If you want to keep and retain the best people, you have to treat them properly, you’ve got to give them the tools to do their job. They don’t want to be packed down with administration. They want everything they need in one place. They want opportunities to work on all the new and exciting projects.
So what is it that our top performers, those “Best of the Best” that Jeanne was talking about? What are the characteristics that they have? If you look at the various dimensions of maturity going through leadership, customer centricity, etcetera, you can again see what it is that they do and how that translates into better performance.
Jeanne Urich: So we’ve done detailed interviews and every year the benchmark, we had 540 organizations in this benchmark, they had an average organizational size of about 300 employees this last year. But what we start to do is separate the best from the rest.
In this particular example, the best are the top 20% compared to the average 80%. Some of the things that we’ve seen are consistent around best practices, is that the best organizations, no matter what their size is, are highly specialized. For example, if it’s a very, very large organization, there are still specialization and there is still innovative practices underneath the surface.
They’re very well positioned in a fast-growing market and typically they’re the dominant supplier. They have the best reputation. They have the most differentiated services. Their clients would vote with their feet. I mean, their clients are wildly referencable and would continually suggest that working with this professional service organization is a great thing to do to their family and friends.
The other thing is they run lean and mean, I mean, we’ve always seen this. They have the highest percentage of people in billable roles. They have the highest percentage of billable utilization. They take advantage of third parties for peaks and valleys in demand. But one of the key things about that, is that it’s not a good thing or a bad thing to use subcontractors.
What is a bad thing is if you use subcontractors and, first of all, they’re not carefully vetted and you don’t make any money on marking them up. Those are some of the key characteristics that we see on the top performers.
Andy Campbell: Absolutely. Having that tight handle on margin. You know, if you’re going to use contractors, that’s great, but you really need to know how that’s going to impact the profitability of the business.
It’s fascinating, this idea of the end of the generalist. That these organizations need to be really, really good at what they do and that marks them out. That clarity over their mission is really key.
The first people are gonna look at is leadership.
Jeanne Urich: One of the things that we started out doing 15 years ago was trying to measure the impact of leadership. A lot of benchmarks, look at operational processes and systems but they never quantify what is the impact of leadership and we really wanted to do that. Throughout the history of the work that we do, we find that leadership has the greatest impact, either positive or negative on performance.
Leaders set the tone, but more importantly, they determine the strategy for the organization. Most of the organizations that we work with operate in a highly competitive, highly technical environment where there’s always something new. So the key ingredient of leadership is figuring out the strategy for success and amplifying that. Doubling down on them.
We work with a lot of younger companies that could be characterized as leadership by “shiny object”. They chase the latest trend but they don’t stick to it. They don’t actually stay the course to make their organization into the preferred supplier.
A very careful selection of markets is imperative to be one of those leaders. Those are some of the things, and we could go down the list, but, they have clarity of vision, mission, and strategy, it’s cemented with a business plan, You know, they do a lot of business planning. It’s not a business plan that is stuck on the shelf for the year, It’s a living business plan.
Andy Cambell: There are three characteristics that really jump out for me. The first is to focus on innovation. They’re not just good at what they do at the moment, but they have innovation and continuous improvement embedded into their business model, which is kind of key.
The second is one about the ease of getting things done. Seeing everything that they do through the lens of a customer and seeing it through the lens of an employee, as well. You’ve got to make it seamless, and you’ve got to make it slick. Bringing everything together really does have a strong impact on customer and employee satisfaction.
And one of the ones you didn’t mention was around broken down silos, which part of that. It is difficult to focus on all these other things if you’re still running your business in silos. Those best-practice models to have leadership models that break those down and foster collaboration across the enterprise.
Jeanne: I would caution, we work with organizations of all sizes, that the key thing is to grow in maturity but continue agility. You don’t want to start layering in is layers and layers of management. You don’t want to have silos and you certainly want to break down any bureaucracy and fiefdoms that may start coming up in your organization. Those are performance busters.
Andy Campbell: Do you want to look at client relationships?
Jeanne Urich: Some interesting things. I mean this is the realm of sales and marketing. Tthis year we asked about quotas. We’ve done many detailed sales and marketing studies in the past but we wanted to fold in, what’s the average quota? What’s the day in the life of a professional services salesperson? And here are some of the real interesting statistics we always see with the “Best of the Best.”
They have fewer salespeople that are more productive. They have higher quotas and they have a much better chance that they’re actually going to meet their forecasts and their targets.
You know that that isn’t just systems-led, but it’s also arming those salespeople with really good munition around what is our service capability? What is it that we do? How do we do it differently so that they can they can actually act as trusted advisors to their clients from the get-go.
The other thing is because these companies do a very good job of harvesting their referencable customers and keeping their customers happy. They’re less prone to discounting, they have much higher realized bill rates, they have higher win ratios and larger pipelines. What’s not to love about a winner?
Andy Campbell: So the organization is focused on what it’s wanting to do and, in terms of customer engagement, it’s about having an effective mechanism for delivering against that promise. Can we talk about talent?
Jeanne Urich: Talent is, in our model, the central pillar and it’s the central pillar for a reason. Professional services is a people-driven business. Without superlative talent in all facets of your business, you’re not gonna survive.
The key thing right now is: how do you find those people? They’re very hard to find because there is a skills shortage. Then once you find them: how do you arm them with the best and most effective tools to ramp them quickly?
This means that you do have project plans. They don’t start off with a white sheet of paper. There’s a great onboarding program that introduces them to the company and provides the tools and processes they need to succeed. This is very important and it all speaks for itself.
The “Best of the Best” also expect a lot from their employees. They work hard, they play hard. Typically they have people that come up to speed faster and have a much higher billability.
Andy Campbell: We can’t forget about service execution.
Jeanne Urich: So service execution, we always look at this. This is what makes service organizations great. It isn’t just having talented people but it’s making sure that every client engagement is delivered with quality. As much as possible is delivered within scope on time, on budget. Which means all of the frontend was done correctly. The client expectations were set up front. The estimate was accurate, and this is something that Certinia is really starting to do with their CPQ product. They’re starting to harvest previous consulting assets and estimates and project plans to, first of all, accelerate the quoting cycle but also make sure that it’s more accurate. Every facet of service execution really does require governance.
You should be looking at your project budget to actuals. You should be looking not just at the task level but harnering your methodology and your repeatability of service delivery. All of these things are of incredible importance and certainly, the “Best of the Best” organizations are great in service delivery and execution.
My favorite, make sure that if you’re gonna use subs and offshore talent, tthat they are not only great but that you make some money on them.
Andy Campbell: Absolutely. All I would say there is, I mean I’ve been out there and I have\ delivered projects and all this stuff. I know that the problems don’t occur in the middle. They occur around the edges, around a handover from sales into the estimate, the estimate into the delivery. It’s those handovers where we get the problems. That’s absolutely key to, to get this effective.
Jeanne; The last pillar: financing operations. Show me the money. I don’t believe that organizations should be run without a profit motive. This has always been a classic debate for the embedded PS organizations: Are they product enablers or are they profit centers?
I think that profit is a wonderful motivator because it means everything else has to be in alignment to make some money. You’re not there to be a charity. You’re there to run a productive. profitable business that also does a great job of satisfying your clients.
This is where the “Best of the Best” always shine. They make more money per employee. They have much higher EBITDA, net profit. They make much more revenue per billable consultant.
Then all of the financial hygiene things. Revenue leakages. This profitability killer. This is work that you’ve done. You can’t bill for, or even worse, it’s work that you’ve done that you don’t know that you’ve done that you never bill for. That happens all the time. Whether it was a time card that wasn’t turned in or there was some component of the work that you can’t recoup from your clients. Then invoices redone due to error or client rejections.
This happens if your contracts aren’t set up properly. But if your estimates aren’t right and if your whole statement of work doesn’t really accurately reflect the work that both you and your clients thought you were going to do.
Then, of course, is margin. Organizations in the professional services business should do an excellent job of planning and replanning. They should be planning the right staff and the staffing numbers around the expected business. We think it’s very important that organizations actually achieve tboth their revenue and marching targets because that’s the way that they’re going to stay in balance and make money.
Andy, of course, your favorite real-time visibility which only comes with our next topic, which is business applicatitons.
Andy Campbell: Absolutely does. We’ve all been in this a long time. There’s no reason why a customre can’t pay the invoice and that translates into a better DSO.
Here’s the really interesting thing. We’re gonna be talking about technology.
Jeanne Urich: One of tthe things in the benchmark is that we ask about the systems that the participants use and we look at 5 key categories:
ERP: Which is your core financial management application
Client Relationship Management
Professional Service Automation
Human Capital Management
Business Intelligence and Analytics.
The good news is, is that for the 15 years that we’ve been talking about this, we have characterized the professional services industry as one of the “Cobbler’s Children.”
Professional service organizations, in general, are laggards vis a vis those in the financial services industry or the manufacturing industry.
We do a great job of doing strategy work and implementing technology for our clients.
But, unfortunately, we’re we don’t do as good a job for our own organizations.
However, all of these numbers have been improving over the past 15 years. Consistently organizations have been using finance and accounting systems forever. So the penetration of those systems hasn’t really changed. But the move for core financials to the cloud has really taken off in the last five years.
I would say about 10 years ago we saw organizations use CRM more than PSA. Initially PSA adoption was higher than CRM. But with the advent of tools like Salesforce, almost every organization has some level of sales and marketing tools. Good news for Certinia, and for the industry, is the use of PSA has been on the rise. 70% of the organizations that we work with have some form of PSA, typically integrated with the rest of the applications.
Then Human Capital Management has come from less than 20%to almost 70% penetration. That’s been the category that has grown the most.
Business intelligence, this category is changing a little bit.. For professional service organizations, they don’t typically use the heavy-duty artificial intelligence and stand-alone data analysis tools that you might see in other industries. Iincreasingly they’re using the reporting that comes out of their core financial CRM and PSA applications. That’s what it looks like in terms of adoption.
The organizations that are the best tend to use systems and they’re happier with those systems. Most importantly, they integrate them. They don’t have silos of information. They don’t have pockets of information. A characteristic of the best organizations is that everyone is armed with the same one source of the truth and is able to take um to make decisions based on reliable information.
I think this is pretty important. You work with organizations all the time. What have you seen?
Andy Campbell: Yeah absolutely. One of our customers, they work in professional services in clinical research and they did a lot of work during covid. They said, “We don’t want a front office and a back office. We just want one office.” When it comes to it, it’s about having one source of truth rather than anything else.
And about integration, for me as an ex-professional services manager, I’m focused on my utilization, but I also want to understand what’s the cost of service to make sure I’m making the right margin against that business. What is the lifetime value of the relationship that I have with prospects and turning that into a customer, and then getting the renewal and continuing profitability and continuing satisfaction? I want to understand the revenue that I’m getting but I want to understand the operational activity as well. I want to understand all the financial costs and you talked about contractors and different price rates previously. So when you bring those three things together, your customer, your operations, and finance data, bring all that together in one place, then you can really start to do some powerful stuff. That’s when you get the better visibility that allude to be at the bottom there? The potential benefits are enormous.
Jeanne Urich: If you’re confused about what it takes to operate in this business, don’t be. We’ve been recommending that organizations at a breakpoint of 20 consultants and above, but I’d actually move it down to 10 consultants and above, should start looking at professional service automation solutions.
This is the best way to have consistency in your service delivery, to have visibility to your staffing, to your capacity planning. All of our studies have shown they pay for themselves quite often in less than a year. This is where we’ve seen a bigger breakthrough this last year between those organizations that don’t have PSA and do. We’ve never seen this kind of a delta.
36% better growth for those organizations that have PSA.
15% larger sales pipeline
10% increase in revenue per employee
13% project margin
11% billable utilization
In the past when we’ve done this study, the lift of PSA has been about 3 to 5% in terms of billable utilization, which almost everyone looks to as a benefit of PSA. The benefits were amplified by a factor of 3X this last year.
Andy Campbell: For me, that makes complete sense. Where we started off was, when you were talking about the performance in 2021 and how organizations, hey’ve stuck to the knitting as Tom Peters would say. Very clear focus on making sure they deliver what it is for the customers. You know that cutting out the fat, cutting out additional costs, and operating in ways that reduce costs continue effectively. This is the consequences of that.
I was doing some math earlier on with one of my colleagues and they said billable utilization that sounds kind of interesting and I said, “Look hold on. it’s not just interesting.” He was talking to a customer who had 50 consultants and I said that 1% improvement in utilization for that organization equates to about $200,000. So this is not small beer, this is when you’re talking increasing revenue, the majority of that’s going to come in terms of margin as well. You’ve got a huge bottom-line impact. The return on investment on these kinds of things is key.
Jeanne Urich: I’ve been doing this for a long long time. I’ve never seen this performance delta in 15 years. This shows me we’ve been through the most unusual two years of anyone’s lives and it’s power to the people. There’s huge consulting demand which is not letting up. Organizations across all of the verticals that we serve, whether it’s architects and engineers or IT consultancies, are really getting some benefit from doing a better job of resource management, capacity planning, time capture, billing. Which is all of the good stuff that PSA does.
We talked a lot about CRM. Certinia lives in the Salesforce ecosystem. As you might imagine, Salesforce is the dominant supplier of CRM in all of our benchmarks. Their market share advantage is huge because over 50% of the organizations use Salesforce CRM. It’s the most dominant CRM and this is the benefit of using a CRM like Salesforce. The biggest benefit is when it’s integrated with PSA.
This is where you get the lift of not only being able to see your territories, your sales pipeline, your contracts but you then can translate that into effective quotes through something like CPQ, effective resource management, and planning through PSA.
Andy Campbell: I completely agree. Interesting you call that the role of CPQ. It does completely fill that gap that exemplifies the integration between the CRM system and your PSA. When you’ve got an opportunity that’s sitting there you need to make sure that proposal’s gonna hit the nail on the head. You develop that, you model it, you take your previous experience of where you’ve won, what works. You don’t have things missed out because that result in change requests further down the track. So you get your really good estimate. You price it up using exactly all the right information, to make sure you’re making margin, you’re putting in the best deal. Seamlessly, once that business is closed won, it spins up your PSA project and start allocating resources and activities and all that stuff to individuals.
It’s that seamless transition. We know that there’s nothing worse than winning the project and then they say, “That’s great! Thank you very much! When your consultants coming inside?” And you go “Hold on. It’s going to be another two months before we get somebody to do that work. Oh, and by the way, you’ve missed something off?” Tthose handoffs, those gaps between the various systems, that’s where the problems always arise.
Jeanne Urich: It’s been a delight talking about all of this with you. We have a lot of questions teed up. So, why don’t we get to them?
Andy Campbell: This one was during the when you were talking about service delivery: “How can we get better at repeat process for service delivery as it’s very human-focused and any resource change affects our KPIs?
Jeanne Urich: It starts off with having similarity in the type of clients and projects that you’re working with. Really service execution starts before service execution, with your sales and marketing strategy. Being very deliberate about the type of projects that you’re pursuing and then winning, assuming there’s some commonality in those projects. Clearly building out a service delivery methodology and toolset is incredibly important.
Whether you’re using agile or you have a more hybrid service delivery methodology. Having consistency also in your service execution tools. Having everyone on the same platform is incredibly important. Increasingly most organizations are using Slack, they have that as a consistent communication channel. They’re using a PSA, in which they have their project plans and they harvest those project plans and then they enhance them. And then measurements. There’s no doubt there are very different levels of capability of your consulting workforce. Taking the mystery out of writing a statement of work or doing a project plan, whatever the activities are that that the workforce is doing, making them as consistent as possible goes a long way towards ensuring customer quality and repeatability in your service execution.
You should be able to recycle learning. That for me will be the key thing. You capture this information about your performance. Then you have a feedback loop, you learn from it. You think about how you can do things better. Good organizations focus on innovation, and the seed corn for innovation is capturing all of that data, and enabling people to learn from it. Make better proposals that don’t miss things. Learn from those lessons.
The other thing would add is that organized over the past year or so, you mentioned Slack and this idea that people’s expectations of communication, their expectations are being provided with information and having access to that stuff.
I expect my customers to have free access to the information on the project that I’m delivering. I expect my partners to have information, too. It’s all about sharing and collaborating and cutting out costs and not having, not putting up barriers. We cut down those barriers and share information. We learn more. We capture more data and it’s a virtuous circle.Jeanne: I think having consistency in the toolkit. Not allowing everybody to roll their own. Which, once again goes back, that you’re selling, which you can deliver in your job roles, your job descriptions, as much as possible. Taking the mystery out of the things that don’t need to be mysterious. Then using that extra time to accentuate and bring forward the things that are truly remarkable about your organization or the way that you deliver.
Andy Campbell: Love that, “Taking the mystery out of things that don’t need to be mysterious.”That’s, that’s my quote for the day.
We have another one here: How do you measure revenue leakage with data?
You talk to the finance stream about revenue leakage being reduced. How would you measure revenue leakage with data?
Jeanne Urich: Isn’t that great? How can you measure something that you don’t have? Right? Revenue leakage would certainly be looking at all of the revenue that you can’t collect. Your write-offs for sure are part of revenue leakage, but also, if you have to redo invoices, that’s revenue leakage.
If you’re finding, after the fact, that there was significant time or expense that you didn’t bill for, for some reason. This is why, every week, there’s still, in this industry, a carrot and stick around those nasty business expense and time capture. But making sure that you’re capturing all of your costs.
The other thing about a revenue leakages, there’s also cost and revenue leaked if you’re spending too much time on proposals that you don’t win, I mean you have to contemplate your entire workforce and their 2080 hours what they do in a year. If you have non-billable time in client pursuits that are continually not won, I would contend that that’s some level of revenue leakage as well.
It’s not one of those financial terms that are well defined but it’s usually a discrepancy between the work hours that you capture or the total work hours and what you’re able to charge. billable work to a client.
Andy Campbell: Do you recommend implementing a PSA if your maturity level is at level 1? Or should you work to align and stabilize your core service execution processes first?
Jeanne Urich: I don’t think you can do one without the other. The benefit of PSA is, as you’re going through the implementation, you discover all the things you don’t know.
All of the things that are a mess have to be cleaned up in order to take advantage of a PSA.
So for example: most organizations may have very sloppy skilled definitions or lack in skill definitions. Tthey may have, you know, rubbish job descriptions. PSA is going to have a discipline whenever you implement it. Don’t overdo it with all of the attributes of your workforce. It helps you distill the most important stuff.
It also helps you start locking in project plans and start measuring where it is that they’re going off the rails. All of those things have to be improved to become more mature. PSA gives you the vehicle for, first of all, seeing how screwed up you are to begin with, and then doing something about improving it.
Andy Campbell: I love it. I love it. You were right and my response to that question would be yes similar to yours. Yes, you do need a PSA. I wouldn’t start with a blank sheet of paper, which I think is what Darren’s kind of implying, that you work out what your service processes are going to be and then look to embed them within a PSA. If you’re deploying financials, which I would highly recommend, we provide. You know, it’s not the first time we’ve deployed these tools, we’ve done it literally hundreds of times.
So we know what good looks like. So we can bring already out of the box literally hundreds of embedded best practice business plans. We’ve got 20 plus pre-built personas so you can just switch them on and there’s your financial controller, switch it on and there’s your resource plan. Literally hundreds of KPIs, dashboards reports already sitting there. If you’re going to start, why not look at what’s available out-of-the-box and consider using that as a starting point rather than saying, “Okay, let’s spend a lot of time examining ourselves and how bad we are.” Concentrating on how you can be much better and leverage best practice. That would be my response.
Andy Campbell: Jeanne, thank you so much, indeed, for your time. We do have to have to wrap up. I’m afraid we’ve come to the end.