You’ve been so cautious about hiring in the downturn. The economy seems to be recovering (still a big question mark!) and it seems like you’re about to hit the ceiling on utilisation.
Do you hire more staff?
Or keep the brakes on?
Sound familiar?
Accurate, current information about all aspects of your business is absolutely critical if you’re going to make the right decisions to affect key indicators like utilisation, backlog, cash flow and win rate. But if you’re like many professional services organisations, that information lives in four or five - or ten! – different systems or spreadsheets. Every operational question requires a time consuming scavenger hunt for answers.
The Disconnect between Sales and Service Delivery
Like waiters selling meals that the chefs aren’t prepared to make, PSOs are consistently caught in the trap of sales committing to customers what the services side may not be able to deliver. This “over the wall” effect can lead to free work, missed go lives, and hot customer situations, where the management team has to smooth things over. This also results in additional burden on the support team that try to fill the gaps for poorly set expectations. All of this effects margins as the costs pile up. If services is involved upfront, you can reduce, or even eliminate, those downstream costs while setting expectations correctly. There is also a nice side benefit. The team starts to work together towards one common goal, satisfied reference customers.
According to Service Performance Insight Research’s May 2011 report, “The New Revenue Growth Engine – Sales and Service Alignment,” the most common breakdowns occur in proposals, pricing and scoping, forecasting and staffing, and services execution: “Gulfs between sales and service typically emerge in the choppy waters between functions – where the overly optimistic sales tide meets the risk-averse services shore.”
In the past, disconnected processes and technology have prevented organisations from keeping the customer at the center of the business. The required bidirectional flow from sales to services, and back to the rest of the organisation, has been stymied by siloed enterprise applications that made the services team an afterthought.
Today, with the explosion of Cloud applications that are “easy in, easy out,” end users don’t have a tremendous physical commitment, but the demand on services to make the customer successful is even greater. As services teams become more strategic to the enterprise, the solution they use becomes critical and is no longer an after thought. Rather, it is an enabler to customer adoption and project success.
Aligning Sales and Services with the Cloud
Professional services is primed for the shift to cloud computing. Services teams are inherently distributed, and one of the best ways to share information is getting it into the cloud. This provides PSOs and supporting functions – like operations, sales and the executive team – with one holistic, real-time view of what customer success looks like. Cost effective and IT friendly, the cloud is opening up new opportunities for services teams.
In their PS Maturity Benchmark Report, SPI Research reviewed more than 200 PS organisations and found that the top 5% not only significantly outperformed the benchmark average but had nearly double the revenue growth and 258% higher net profit. In the study, companies with integrated CRM and PSA systems reported higher bid/win ratios, higher project margins, higher utilisation and higher revenue per billable consultant.
The report goes on to state:
“Every leading organisation has invested in a PSA solution and they are twice as likely to have integrated their PSA application with their core financial application. This level of integration between their PSA and core financial applications provides excellent visibility to resource scheduling and project profitability so they can quickly respond to changing requirements while delivering best-in-class margins.”
Although PSOs are among the first industry groups to start taking advantage of Cloud CRM, few are adopting cloud solutions in a way that helps them better align sales and service. A combination of improved communication, operational visibility and fully integrated cloud technologies will help you eliminate the disconnect between sales and service, and better manage the full spectrum of people, projects, customers and financials.
Here are some guidelines to get you started on this profitable path.
- Death to Excel: Have you ever wanted to answer a simple question – for example, “Do we have a backlog on work?” – and had to look at four different systems/different Excel spreadsheets? Multiple, disparate, out of date spreadsheets just don’t cut it. Today’s PSOs need a single dashboard to get full operational visibility into how things are being sold and delivered. This will keep everyone honest.
- Extend information access: Cloud-based solutions can help you move away from the silos of data that different systems have created over the years and extend the right data to the right people whenever they need it. Information like time, cost, engagement progress and quality should be accessible throughout the entire client lifecycle, from initial bid through project completion and invoicing.
- Don’t let CRM turn into an information island: The introduction of Salesforce CRM (with approximately 33% market share in PSOs and growing)* will deliver process improvements and better customer visibility only if used smartly in conjunction with other key business systems. *Source: The New Revenue Growth Engine – Sales and Service Alignment.)
Today, many services organisations run a hybrid – and therefore fragmented – environment with CRM in the cloud, accounting and PSA on traditional on-premises servers and of course the usual mixture of custom spreadsheets running on laptops and desktop systems. Cloud technologies become the bridging factor that turns your CRM and PSA data islands into a peninsula that connects back to your organisation.
- Apply the “One” equation: One process + one team + one technology platform = one view of the customer. A single view of the customer has to go beyond simple interfacing and integration. Many cloud solutions are still different flavours – silo-ed sets of data that require costly integration to build and keep in sync. According to SPI, “by making sure PSA works effortlessly with CRM, you’ll get true visibility into and control over all PSA functions – everything from resource management, project management and documentation, to time recording, billing, and reporting.”
- Assign ownership of business processes: A balanced scorecard needs to take into account three key areas: customers, financials and teams. By assigning ownership and measurement of cross-functional business processes and making sure tasks and goals are realistic, there’s no question you’ll get more clarity into projects and enhance performance.
- Keep your teams happy: With access to a single vantage point of the business, consultants can see exactly what the sales team is working on, adjust and ramp skill sets to match demand, and get more involved in the process to support the success of sales.
We’re in a services economy where customer adoption and customer success are paramount. The shift to the Cloud is not just significant for PSOs, but for their customers as well. Services teams who devote time to productive, client-facing activities can reduce inefficiencies, redundancies and miscommunication.
