Years ago, I founded my own professional services organization (PSO), Fulcrum Solutions. In just under three years, it reached 200 staff with offices in London, Edinburgh, Manchester and New York, and was then acquired by Whittman-Hart.
After overseeing the integration, I founded another IT consultancy: Edenbrook. In eight years, that grew to 400 staff across the UK and India, after which I sold it to Hitachi Consulting before founding my current business, Kimble Applications. Kimble’s co-founders share similar stories of founding, growing and eventually selling their own PSOs, and it is our joint interests and frustrations developed during these experiences that led to Kimble being born.
If you run a growing project-based consultancy, see if you can recognize the following situation, one in which I found myself far too often: you meet regularly with the senior management team to discuss the business. You want to spend your time asking how the business is performing, what the upcoming pipeline looks like, how utilization is stacking up and what this means for taking on new associates or permanent staff. Other HR issues, like retention and training, are probably on the agenda.
You want to forecast where revenues will be coming from in the future – what lines of business are you in and which should you be getting into? How do you protect and grow margins? You might be looking at loans or additional external investment to fund further expansion.
But how much time do you actually spend discussing these things, and how much do you spend arguing about the accuracy and currency of the data you’re working from?
The overwhelming majority of PSOs operate in a tidal fashion – in monthly cycles: financial reporting, expenses, time sheets, utilization reports and more. The organization’s different functions use different systems to store data, or the data they hold is otherwise siloed within their own departments. To get a complete view of the business, all those siloes need to be reconciled; it’s a big undertaking, so we only do it once a month. It’s also fantastically prone to error, which is why you – as I did – spend so much time arguing about the veracity of the information.
It’s easy to imagine a better alternative: all information is entered, in real-time and from any device anywhere and anytime, into a single system. Updates are spread immediately through all parts of the system, so any time you look for a piece of information in this ‘golden source’, you can be sure it’s 100 per cent, up-to-the-minute accurate. Monthly Board meetings can now be spent arguing about the future direction of the business, not the operational stuff.
But think further: why are those Board meetings monthly? Oh, right. The ‘golden source’ means you can look at the business with your strategic hat on every day, spotting and taking advantage of new development right away. The data you use to run your PSO is no longer a tide that ebbs and flows, it’s a fast-flowing river.
Accurate and current information makes it easier to devolve the operational decision-making that takes up so much of your time. Before, it was hard to relinquish control in this way because no-one would have as good an understanding of the overall state of the business – or have as much experience with troubleshooting – as you. But of course that means important decisions get delayed until you can free up the space to deal with them. Moreover, as one of the executive team, you’re of necessity removed from the front line, where the specific situational information is freshest, the understanding most complete, and where operational decisions are therefore best made.
Give, say, engagement managers the ability to make operational decisions critical to their projects and that empowerment drives employee satisfaction. You can have confidence that you’re not opening up a whole can of operational worms because there will still be constraints on how your people operate: the finance department still has to approve the bills they generate; more senior managers still have to approve the milestones that they complete. Give your employees visibility of the performance of the business, and they can take decisions in context that will increase profitability and speed up growth.
Your time as a leader of the business is freed up to concentrate on tasks of strategic value: resourcing projects in advance of winning them; checking in real-time and regularly to see what historical, current and projected margins are; spotting and fixing problems early on in a project rather than after any possibility of margin is already shot. Where do you need to invest in skills, new resources? Should you acquire? Should you retire this high-revenue but low-margin client?
The advent of the cloud makes this possible today: there’s no excuse for different back office systems not to talk to one another; there’s no hiding place for information siloes.
If you’re reading this, you know your firm has hit some kind of obstacle to growth. It might be hard to define exactly. You might think that there’s software out there that can help to overcome it (and you’d be right). But it’s not a new time management or financial reporting system. That’s old-world thinking. New-world thinking chips away at the problem until it’s truly understood, then works out what needs to change, be it software, people, or processes.
You have to refrain from sticking Band-Aids onto broken software systems or replacing old but serviceable ones with new models with go-faster stripes. You need to engage in exactly the kind of holistic thinking you employ on behalf of your clients. You need to ask yourself how any software you invest in is going to help the whole business to scale and grow. To do anything else is to become obsessed with the symptom, rather than the cause.