How can you boost your consulting business?

5 strategies that work to accelerate the performance of a consulting business

Professional services activities (consulting, agencies, IT Services, research, training) have in common the fact that there are many possible levers for improving business performance. Depending on the level of maturity of each organization, the differences in performance can be enormous. A perfectly optimized consulting firm that applies the strategies described in this article will be able to generate higher sales. But also to benefit from faster growth in pipe sales, and to post much higher utilization rate and earnings than a less mature consulting business. All without any process or management.

 

1. Monitor performance in real time rather than after the fact

a. No longer be a blind organization: give managers the right data in real time

While selling a project is a major challenge, it's important not to neglect project management once it has been sold. In particular, it's important to monitor project profitability. Whether the project is sold on a fixed-price basis (a fixed amount agreed with the customer) or on a time-and-materials basis (sales amount based on time spent on the project), it's up to the project manager to ensure that project margins remain in line with the objectives set when the project was budgeted.

At the start of a project, a budget must be drawn up, taking into account all the project costs to be set against the expected sales:

• The cost of the collaborator(s) in relation to the time spent on the project
• Any subcontracting costs
• Expenses such as travel and meals, which, when they cannot be re-invoiced to the customer, have an impact on the project margin.
• The cost of any products sold as part of the project (e.g. training, software licenses, etc.).

During the project, it is important to know at all times :

• Budget consumption
• Details of variances: how time spent on actual project tasks compares with budgeted time
• What is the actual profitability compared to the budgeted profitability?

Project managers need easy access to this up-to-date data, for all the projects they manage.

With this information, they are empowered to act at their own level to improve performance. If each manager drives improvements at his or her own level, imagine the impact on the whole.

b. Being able to anticipate for better correction

Comparing a project's performance against budget is a good thing. But to be proactive, it's essential to have forecasting data.

So it's the forecast profitability (or margin on completion) of the project that we need to look at during the course of the project. This forecast profitability takes into account what remains to be done on the project.

Ideally, the to-do list is regularly updated by the project manager, who reviews progress on the various tasks and confirms the time remaining.

With these elements, all profitability forecasts can be calculated (or automatically provided by your management platform). This enables you to identify projects that are deviating from their objectives, and take the necessary action before it's too late. For example, if you realize that the projected margin is deviating from the budget, you can :

• Talk to the customer about renegotiating the contract. Perhaps the work was poorly described in his specifications.
• Take stock of the various tasks to see how to reduce the time spent on each one.
• Reorganize resource planning on this project, and see if less senior collaborators (thus representing a lower cost) can advance on the project with the same chances of success.

pipe proposal management in Stafiz

 

c. Benefit from more relevant indicators

You can't improve what you can't measure. This adage is also true for the performance of a consulting business.

Managing a consulting and service business is no simple matter. Excellent management gives you a competitive edge: more relevant reporting, which enables you to make better decisions more quickly, gives you a strong competitive edge. Operational excellence leads to greater profitability, which in turn enables you to make better investments, which in turn enables you to accelerate your growth. In short, with the right indicators, it's possible to create a virtuous circle of performance improvement.

And what is good reporting?

This is a reporting system that provides you with all the key indicators, in real time, on actual and forecast figures, at the granularity that interests you (overall, by division, by sector, by type of employee, etc.).

As a minimum, when you manage a consulting activity, you must have the following indicators at your disposal:

• Sales figures
• Margins
• Production in days and in value
• ADR (Average Daily Rates) actual
• staff activity rate / TACI / utilization rate
• Employee occupancy rate
• Income statement
• Differences between revenue and billings

Put this data in the hands of managers. Set targets for each of them. In this way, you can ensure that these employees are empowered to take the actions needed to achieve them.

2. Gain visibility on capacity and forecasted workloads

a. Know at a glance the forecast workload level of the teams

The heart of the reactor for improving the performance of a consulting business is employee workload management: we need to ensure that the workload is better distributed between the different employees. That they are neither overloaded, nor underloaded.

It's essential to have the right level of information. This enables us to know whether, in the coming periods (next days, next weeks, next months), our workforce has the capacity to handle the load. Or if, on the contrary, our workforce is too large for our needs.

Gaining long-term visibility on this aspect of capacity and workload enables you to make better recruitment decisions (should you speed up or slow down recruitment?).

But also to improve employee commitment (making sure that employees' workloads are appropriate).

And to improve the profitability of your business (having the right resources in front of the right needs to avoid being over-staffed or under-staffed, which can prevent you from winning projects).

Load forecast in Stafiz

 

b. Plan the utilization rate / staff activity rate according to the objectives

One of the key indicators to monitor is the staff activity rate or utilization rate (or billable rate): this is the time spent by employees on billable projects (which will generate turnover) in relation to the time available.

Gaining visibility on this indicator will enable you to manage your workforce much more effectively.

Depending on hierarchical levels and roles, the time spent on billable projects is not always the same. It is therefore also necessary to analyze TACE or utilization rate by role or by team. A target must also be set for each type of employee. The TACE target will undoubtedly differ between a junior member of staff and a manager or associate who spends more time selling projects.

Finally, you need to look at the staff activity rate or utilization rate achieved, of course, but also keep an eye on the forecast: to date, what is the TACE achieved in one month, two months, etc.? And therefore, how much do you need to get to reach your objectives?

It's with this kind of approach that you'll improve your performance and generate more results.

c. Improve management of resource planning employees

By making resource planning a key process in your consulting business, you put the employee at the heart of your strategy. You promote employee commitment and satisfaction.

Ensuring that teams have full visibility of their forward schedules, and empowering managers by giving them long-term visibility of their teams' resource planning are typical actions that pay dividends in terms of employee commitment and retention.

Managers need to be equipped to better forecast their teams' workloads. They need to offer everyone enough work to feel committed and progress. But at the same time avoid overloading employees, to avoid demotivation or burn-out.

 

Find out how Stafiz meets the needs of a consulting firm.

Read our customer case studies.

Stafiz for consulting

3. Improve employee experience

a. Provide access to a platform that brings together all their needs

To keep employees motivated, it's also necessary to provide them with the technology that helps them work simply and more efficiently. The kind of technology that allows them to express their full potential, by saving them time on non-value-added tasks and providing them with the right information at the right time.

A good way to save employees time is to allow them to centralize their tasks on a single platform. Here's the definition of an unpleasant experience for an employee. :

• connect to a system to confirm times
• to another application to submit charges
• and a third to apply for leave before going...
• ...find your schedule on an excel spreadsheet

This is clearly inefficient!

Bring all these elements together in a single environment, available on computer or smartphone. On the contrary, it's a solution that offers simplicity on a daily basis! And it allows employees to focus on their mission and their customers. This improved employee experience is a key factor in satisfaction and retention.

b. Offering the right technology

There are many technologies available today that greatly simplify the employee experience. The numerous gains (productivity, satisfaction, commitment) generated by these technologies alone justify their acquisition.

Take OCR for expense management, for example. All the employee has to do is take a photo of his receipt, and the expense line is pre-filled with the amount, taxes and date. All the employee has to do is indicate to which project the expense should be attached.

Or probative value. It's no longer necessary to go through the tedious process of storing receipts in envelopes before photocopying them and attaching them to an expense claim. Fortunately, a photo is all you need. Good expense management solutions let you take advantage of this, by taking care of the storage required by URSSAF.

Ideally, your employees should be able to access their entire environment from their mobile. Why not take advantage of the subway journey to confirm the time spent on different projects during the day?

Other technologies, such as software integration, can also simplify and save many hours of administrative management.

c. Use resource planning to better engage your employees

Improving the employee experience means managing resource planning in a way that takes into account more criteria than just availability. Ideally, skills development should also be taken into account. In other words, make sure that an employee's resource planning allows them to develop their skills and reach their progression objectives.

A perfectly managed resource planning can even integrate employee skills. Allowing them to indicate the type of project they'd like to work on, or the type of skills they'd like to develop. When resource planning intelligently cross-references more criteria and suggests the most suitable employees according to your criteria, you can be sure of increasing employee satisfaction and nurturing talent within your organization to keep it for as long as possible.

4. Greater reliability and control

a. Avoid working on spreadsheets or multiple solutions

Excel is an excellent tool, but it has one major problem: spreadsheets in general are far from infallible. Human error or modeling problems are the source of many errors. What's more, the knowledge behind complex spreadsheets is often retained by an employee who, when he or she leaves the organization, loses knowledge of the file, making it too complex to maintain. It is then often necessary to recreate a new model. Or spend many hours adapting it to understand and use it. A waste of time and a risk no organization should take.

In short, Excel-based management is suitable for very small structures (fewer than 10 people), but is not scalable as the business grows.

For a company to structure and grow under the right conditions. :

• The data that teams use must be reliable
• The risk of error must be zero.

Another option is sometimes to use several solutions that are not connected to each other. But this also entails a risk. Data will undoubtedly have to be extracted from one solution before being reimported into the other. This can lead to errors, not to mention wasted time.

Software that performs the calculations end-to-end provides a finer-grained analysis and inevitably reliable data. The risk of human error is eliminated. When the data is also used to prepare financial closings or payroll, it's even more reassuring to use a single platform.

b. Define approval levels

Working to improve data reliability and internal control doesn't have to be administratively burdensome - quite the contrary.

When the various requests (for expense reimbursement, leave, etc.) are organized using workflow systems, i.e. approval flows, collaboration and simplicity are enhanced.

To achieve this, it is necessary to have well-defined approval flows in place. These must be kept simple to avoid too many validation steps, but must intelligently route requests according to their nature.

For example, the person best placed to approve an expense claim is generally the project manager for the project to which the expense relates. This is the person who will be able to confirm whether the expense is justified, whether or not it can be re-invoiced to the customer, whether the employee is complying with company rules on this project, etc. The project manager is also given responsibility for monitoring costs incurred on his project. On the other hand, a request for absence is more likely to be approved by the employee's manager or by HR, who are in a better position to take the overall view needed for approval.

Workflows therefore need to be carefully designed and fully automated to ensure that approvals are given quickly, with the right level of control.

c. Enable finance teams to work with reliable data

Managing operations and the associated reporting is crucial. But for the organization to be fully effective, you need to ensure that the data generated by operations provides the finance teams with reliable data. This will enable them to close accounts and carry out the management analyses required at certain intervals.

This means that your system must be able to extract data with total reliability and transmit it to the accounting solution you use to update it. This data transfer can take place either via pre-formatted files (known as "flat files"), or via APIs, i.e. automated transfer via connectors. To avoid any errors, the second option is always the best.

 

Sales journals, data on expenses to be reimbursed, and subcontracting purchases are then transmitted directly to the accounting system for closing and tax preparation. Payroll variables (vacations, bonuses, luncheon vouchers) can also be directly transferred to the payroll software.

This automation prevents human error. All data remains reliable and controlled right up to its entry into accounting and payroll. Not only is internal control strengthened. But controlling teams gain enormous productivity, and can concentrate their efforts on value-added analyses for performance. Without this, they can spend hours working on financial closing.

5. Accelerate your business

a. Anticipate new purchasing behaviors

Selling projects is a subtle art. Multiplying exchanges to identify customer needs, providing clear answers and standing out from potential competitors for proposals that stand out from the crowd...

Selling consulting projects is a very human process, leaving little room for automation. There are a few key trends to bear in mind when improving your sales strategy:

• Using recommendations and referrals alone to develop business can be risky.

In the space of a few years, the search for consultancy has moved from a network-driven approach to one more influenced by internet searches. In 2013, Hinge Research Institute surveyed buyers of consulting assignments. At the time, 70% said they had obtained a recommendation to choose the consulting firm they wanted to work with. By 2019, the figure had fallen to 60%, with the trend accelerating in 2021.

• Buyers place more importance on technical skills when selecting a consulting firm

Expertise has become a key element in a highly digitized world, which requires us to get to grips with technical aspects, code and developments to improve business performance. The differentiation of service providers is stronger than ever before, when generalist profiles were preferred.

• Buyers consider consulting activities more useful and important than in the past

Whereas in 2013, only 19% of customers considered their consulting providers to be instrumental in solving their problems, this figure has jumped to 29%.

b. Integrate digital and growth marketing skills into your organization

While the sales development of a consulting business must give priority to the human approach, modernizing marketing methods is nonetheless a necessity for any consulting business wishing to accelerate its development. Visibility must be prioritized, and opportunities for interaction must be multiplied. And this is where growth marketing methods can be extremely useful to a consulting business:

• Putting content online that provides maximum value on expert subjects helps build credibility and improve SEO performance, so you'll be more visible when a search is made on search engines. The first step is the regular posting of articles on the company blog. While the content is important (it must provide maximum value to readers), so is its distribution: a poorly referenced article has little chance of generating new leads. Before writing an article, you need to define your distribution strategy.

• Frequent communication on social networks is also a simple way of gaining visibility and highlighting expertise. And here, nothing works better than having employees themselves get involved and highlight their expertise by taking part in online discussions, commenting on posts or distributing articles that may be of interest to your targets.

• Developing your growth also means expanding your audience by sending personalized messages to well-identified contacts who fall within your target audience. There are now a number of perfectly legal ways to "scrape" LinkedIn and obtain the e-mail addresses of these contacts (Phantombuster, for example). As long as you distribute professional content and respect certain rules, there's no RGPD problem when you distribute content that may be of interest to them. As long as they have a link to stop the process if they so wish. This content can be found in newsletters, e-mails or blog posts. Growth techniques allow you to automate the search for contacts, emails and even telephone numbers, which increases the power of your marketing tenfold.

c. Monitor pipe sales and anticipate forecasts

To improve the performance of a consulting business, you need to have precise visibility of what's going to happen:

• Know your sales forecasts
• forecast employee workload and capacity
• projected profitability
• All these elements are crucial to anticipate problems far enough in advance to be able to correct them.

Without this visibility on forecasts, there's no way to manage. Business management is a matter of chance.

Projects must therefore be visible in their pre-sales phase, with the possibility of weighting the associated sales according to the chances of success. This data will complete the forecast based on projects already sold, and give a complete and more realistic vision of the forecast.

Ideally, these projects, still at the proposal stage, will also enable you to forecast the associated budget in terms of resources, and therefore the associated profitability.

Even better, if you can script the resource planning of these projects right from the pre-sales stage. This gives you a head start, with a much clearer view of the forecast workload and any recruitment needs.

 

The challenge of improving a consulting company's performance is clear: implement the technologies and tools to simplify tasks, gain visibility on performance and improve collaboration. This transformation is vital to move a business into a more mature state, which undeniably helps generate far superior performance.

The most successful consulting businesses are those that have made this choice. A study released in 2021 by SPI Research, a research and consulting company that helps service providers and consulting firms alike to progress, showed glaring evidence of discrepancies between consulting firms depending on their equipment. Companies equipped with a comprehensive management platform posted 3 times higher sales growth, 1.8 times higher utilization rate and 5 times higher EBITDA, compared with those not so equipped.

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Stafiz helps service companies and consulting firms gain visibility, pilot their activity, manage their resource planning and project progress thanks to real-time data. Stafiz is a SaaS solution for resource planning, project management and business intelligence. So budgets and margins are always respected, and you can make better decisions for your business.

If you too would like to improve the performance of your consulting business, don't wait any longer.

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