'Go Lean' for the New Year
By Neil Davidson, Managing Director, Deltek UK
January 4 2009 - Consultants and professional services firms are reliant on their people. They are the core of their business, which is why many firms are keen to keep hold of their skilled staff. For many other businesses redundancies are an obvious way to cut costs, but for project based companies it has to be the last resort.
Many of these companies are reluctant to go down the same route as they did in the early 1990s - when redundancies were the first port of call for any CEO looking to balance the books. It took them a long time to get the same quality of staff back through the door when work started coming in - and as a result it took them longer to respond to positive circumstances.
So, how can companies who want to take a considered approach to the current economic climate take meaningful action to be more efficient, streamlined and lean without letting go of talent required for future growth?
By streamlining the internal structure (like resource and reporting planning systems) businesses can start to see the savings that can be made from deploying resources properly, without anyone, or anything 'on the bench' costing money rather than making it. This means running an efficient business specifically from a control and management perspective.
Resource management is the key to this. The fact is you simply can't run a successful commercial operation without a complete overview of the business. However, over 60 per cent of companies we surveyed had no real system of monitoring their resources - so there are huge savings out there which are not being made.
Some companies believe that a simple spreadsheet (like Excel) is enough, but it's simply not capable of giving the right information to run a tight ship. A proper planning system will allow a business to understand some key metrics. Namely: which resources are fully booked, and which is 'on the bench'; what grades and levels of staff are in demand from their clients; whether resources can be shifted across projects or divisions to avoid hiring expensive and unnecessary freelance or contract resources and finally, where the resource hotspots are before they occur. These are vital statistics; something a basic spreadsheet programme is incapable of providing in real-time, and over a long period.
It's always surprising to hear a company say that they can realistically manage all their resources with an Excel-type spreadsheet. Sure, Pele said he could play football with slippers, MacEnroe said that Roger Federer could beat most people with a frying pan, but the rest of us need the best possible tools available to do a perfect job - so its fair to say that a basic spreadsheet is not going to keep your resources at optimal levels in a recession.
For example, it's all too easy to make the decision to bring in a freelance consultant when deadlines are looming. There are massive benefits to be achieved to an organisations bottom line by understanding whether current staff have the capacity to take up the slack - it's a classic oversight and a good example of where poor planning methods can affect budgets.
In many ways a downturn can actually be an opportunity for professional services businesses to focus their working systems. It can provide a catalyst to tighten the structure of the company so that it is as much about the people within it, as it is about the systems behind it. The benefits will be seen more than ever when the upturn comes and you can grow with the knowledge that your business has the right structure behind it and the right people at the front.
About Deltek UK
Deltek is the leading global provider of enterprise software and information solutions for professional services firms and government contractors. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 16,000 organisations and 2 million users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business, optimise resources, streamline operations, and deliver more profitable projects. Deltek - Know more. Do more.® www.deltek.co.uk