January 17, 2014
Recent research makes it clear that while the professional and consulting services industry has invested in process improvements to enhance project performance, quality, and cost of delivery, the industry is actually getting worse at resource management (RM)! Given that labor expense is the single biggest cost element for professional services organizations (PSOs), these trends must be reversed for any services organization to be successful.
This article discusses five key industry barriers to success and how to overcome them to achieve true Just-in-Time Resourcing®―enabling your team to predictably get the right person in the right place at the right time.
There are five common barriers to effective Resource Management:
We have identified the following strategies for successfully overcoming these barriers.
Perhaps the biggest shift for most companies in establishing effective RM is adopting the simple paradigm that all resources are the asset of the company, and not any particular department, region, or geo. This begins by aligning RM as a neutral support function, allowing it to operate without fear of repercussions for planning decisions or temptation to play favorites. This function we named the Resource Management Office (RMO).
Additionally, by setting up RM to transcend organizational boundaries, it allows for resource managers to be effective at championing changing priorities and recognizing and offering candidates across departments. Visibility is critical to speed time to staffing and results. Resource managers should be a key partner in resource planning activities and must be properly aligned and publicly supported to make and enforce key resourcing decisions. Indeed, industry research indicates that when RM is centralized, billable utilization increases and time to staff decreases. See Figure 1.
Centralizing RM does not remove the people manager from the process of staffing. It changes their role, delegating many of the “heavy lifting” aspects of staffing to the RMO, and leaving the all-important people management function with an individual’s immediate manager. Important to also note is the interaction between the role of the people manager and the staffing function. People managers will still be called upon to provide guidance and insight on things like skills, career goals, and preferences as needed for staffing. A neutral staffing function allows for a balance in considering the holistic needs of the organization, as well as the needs of the individual.
As we discussed, your labor force represents the largest part of your services costs―as such, your strongest process discipline should be in RM. Project management and quality processes are important, but if you cannot get the right person in the right place at the right time, you will never achieve the results you want for project performance.
To get the right person on the job, it is imperative that sales and delivery teams adhere to key processes around forecasting, schedule management, and staffing. Resource managers can only make decisions and recommendations as good as the data they are using―after all, if you don’t know who is available, you can’t consider them for project roles.
Likewise, processes and policies should be established for dealing with common situations, such as unexpected extensions (e.g., Does the resource stay on the current project, or move to the one that has been planned next?), and there should be an escalation point to quickly resolve conflicts. These policies should be supported by leadership in order to empower the RMO to do their job efficiently. This keeps everyone on the same page as to what they can expect, allows for quicker resolution of issues, and allows expectations to be managed between all parties and the customer. The aforementioned are just a few examples of process needs. Implementing a holistic solution such as Just-in-Time Resourcing® for RM is imperative. See Figure 2.
Sales, delivery, and RM must be functionally aligned in order to stay in sync on both expectations for managing upcoming demand and supply, as well as on policies that will support the execution of this process. Delivery and RM must be able to see what is coming in order to make the best staffing decisions, and to make plans to mitigate upcoming resource gaps and surpluses, such as using opportunities to develop resource skills.
A typical planning horizon would be four to six months at a minimum. When delivery and RM have a good sense of the upcoming demand and staffing plans, they can provide better information to sales on when and what types of resources might be able to deliver services―enabling sales to sell projects with the confidence that they can be delivered and manage expectations with their customers all through the sales process. Best practice is to use an integrated CRM and professional services automation (PSA) solution as the system of record to drive accurate forecasting and reporting and efficiently manage the opportunity as it becomes a live project.
It is critical that RM is enabled by a technology infrastructure that is designed to meet RM business requirements, manage data critical to making resource planning decisions, and support efficient RM operation. Most organizations have projects and schedules too complex for spreadsheets and would benefit from a PSA tool. However, it is important to avoid simply buying a PSA solution―you want to select a tool that really meets your needs. There is nothing that undermines the credibility of RM more than inaccurate data, or moving to more inefficient processes with numerous steps, that are driven by inappropriate tools rather than the business need.
Start by defining your target RM processes that meet the needs of the business, and then use those requirements to select a tool that most closely meets your needs. Keep in mind, as with any system, a PSA solution is not a magic bullet that will solve every operational problem. Even the best solution will still need to be supported by strong processes to ensure timely and accurate management of data and reporting. Because process and technology are so intertwined, implement them together.
Taking steps to manage process and technology change, and ensure participants are willing and able to adhere to RM processes and policies, is viewed as critical to compliance―and in turn, success. Anticipate needs and objections, and build a change management plan to address them. Support the education of participants on process and technology to ensure they are enabled and empowered to complete transformational needs, and measure ongoing compliance to process requirements. Build bridges with sales to improve resource forecasting. Get senior management to visibly support not only the change management and implementation plan, but also enforce compliance and support centralized management of resources and the day-to-day operational decisions of the resource manager. This ensures that RM is seen as a credible authority on resource planning and guidelines.
The benefits of formal, centralized, process-driven resource management are undeniable. Increased utilization, improved project performance and profitability, and customer and employee satisfaction are just a few of the benefits effective RM brings to the table. The bottom line―better RM practices will make your PSO more profitable.
Randy Mysliviec leads RTM Consulting, a TSIA Consulting Alliance Partner, providing high-impact advisory services for technology companies’ service businesses. Acknowledged by industry sources as an expert in Global Resource Management (GRM) and author of the Just-in-Time Resourcing® brand of solutions, Randy advises multi-national companies with the complex challenge of operating services teams serving the global market. He is a founding member of TSIA and serves as a member of the TSIA Partner Advisory Board.
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