Resourcing and operations: the essential processes for consulting firms

Think of resource management like an exercise program. 

If you haven’t done any exercise all year, you’re not going to get up and run a marathon in January. You start by walking.

After a month or so, you might be jogging. After three months, you’ll have established a pretty solid routine.

But if you want to be running a marathon by November, you can’t just pack it in—it’s essential to keep up the training.

Resourcing and operational essentials (by staff size)

If we were to carry this analogy over to a small boutique firm with 1-10 employees, we wouldn’t be expecting any marathons from them just yet.

Instead, they should be focusing on the basics.

With insight from Mark Sloan, Managing Director of Asaph Advisors, let’s take a look at some of the essential, fundamental resourcing processes consulting firms of different sizes should be focusing their efforts on:

1-10 FTEs

At this stage, most of your decisions will be made based on a combination of core data and gut instincts—detailed analytics and systems just aren’t needed at this stage and will only serve to confuse you.

Instead, focus on perfecting these key processes:

• Revenue and pipeline forecast
• Profit-centric KPIs
• Proposal & invoicing process

10-25 FTEs

As you reach 10-25 employees, however, you can start picking up the pace—and adopting timesheets is a great place to start.

Tracking time provides invaluable visibility over your staff and their capacity. It’s essential for calculating their billable utilization rates and balancing the supply vs. demand equation.

With insight into their utilization rates, you’ll know whether there’s spare capacity left to consume, and be able to make confident hiring decisions when you’re ready to grow.

In summary, focus on perfecting these key processes:

• Project-level profitability
• Well-embedded timesheets
• Staffing forecast

25-50 FTEs

Once you do grow to the next level, around 25-50 employees, it’s time to start building a skills and competencies matrix. That’s because remembering the individual capabilities of every single consultant starts to get very tricky at this size of firm.

By documenting their skills in a matrix, you’ll be able to quickly assign your staff to open engagements that require their expertise and find opportunities for growth and development. 

For operational success at this level, you’ll need:

• Resourcing skills matrix
• Designated resourcing person
• Current & future utilization

50-100 FTEs

As you grow beyond 50 staff to the likes of 300+, it becomes a case of continually evolving the capabilities—your exercise program—so that you can continue to answer the most important questions…

• New hire onboarding process
• Embedded weekly/monthly/annual management reporting
• NPS & eNPS process

100-300 FTEs

…such as, “Do we have the right level of resources?”, and “Are our resources appropriately skilled for the work we’re driving demand for?”

• Strategic plan dashboards
• Scalable recruitment process
• Stakeholder reporting

300+ FTEs

Remember, you shouldn’t be framing your goal as, ‘How do I reach the finish line tomorrow?’. You should be framing it as, ‘How do I reach the finish line within 6-24 months—and how do I steadily build capability along the way?’

• Multi-level and portfolio views
• Externally facing reports
• Management planning

Three core components of resource management

1) Staffing

Most consulting firms tend to have the staffing component of resourcing covered—they couldn’t operate without it. However, this process is also often a scramble due to the project-based nature of consulting.

There are plenty of factors that can cause challenges with staffing, such as allocation based on skills, coordination across offices, pipeline uncertainty and talent retention.

Many of the improvements Mark has seen firms make in this category is, once again, around defining core skills and competencies. 

When you create a skills inventory and assess your people against those skills, you’ll realize some of your consultants know more than you’d originally recorded. They then become more valuable resources as they have the capabilities to fill multiple roles.

2) Forecasting

Many consulting firms don’t spend nearly enough time on forecasting, and yet it’s essential to overcome some of the challenges we’ve just discussed. 

When you’re able to ‘see’ the work that’s coming, you’re much better equipped to plan for it and achieve better results. Being able to marry up the data from finance, sales and services to tell a story using your data is critical for making decisions with confidence.

One of the best ways to achieve this visibility over your staff is to bake resource planning into your sales pipeline meetings. This means you can regularly sit down and look at the demand you’re generating and then determine how many resources you need to satisfy it.

Mark stresses that spreadsheets won’t cut it when you’re past the early stages of your ‘exercise program’: you’ll need to move to a dedicated professional services automation (PSA) software to capture and access real-time data, as well as the tools needed to turn it into actionable insights.

3) Enablement

The exercise program we mentioned earlier—the governance, the meetings, the data—brings it all together as you start to make data-informed decisions.

To make it work, you’ll need process, discipline and continuity, but the more you do it, the easier it gets.

As an operations or finance person who works with sales and delivery, you’ll have spent a lot of time looking at staffing and forecasting, and during this time you’ll have developed a pretty significant muscle memory about how long these processes take.

You’ll be able to refine things like determining how long a lead takes to close and apply these to your forecast, and this clear logic is essentially for proving to key stakeholders that the data is essential for their role.

Final thoughts

The key message here is consistency. Hopefully, using this list of essentials, you’ll have a clearer picture of what you need to embed at each growth stage, and how continuously building and improving your capabilities can serve your firm in the long run.

Click here to watch the rest of the webinar with Mark.